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Coalition asks Congress, agencies to overhaul Paycheck Protection Program

May 21, 2020

By Jennifer Garvin

Washington — The ADA and more than 100 stakeholders are urging Congress to overhaul the Paycheck Protection Program to help align the program with states’ reopening and ensure more small businesses remain in operation.

In a May 20 letter to leaders in the House, Senate, U.S. Department of Treasury and Small Business Administration, the coalition — led by the U.S. Chamber of Commerce — said it was grateful for Congress and the agencies’ efforts in creating and implementing the Paycheck Protection Program. The Paycheck Protection Program is a loan established by the Coronavirus Aid, Relief, and Economic Security Act to provide a direct incentive for small businesses to keep or rehire their workers.

The groups pointed out the current rules were designed when lawmakers anticipated that stay-at-home orders would last only a few weeks, and said “the current environment is making it harder for small businesses to survive” and noted that small businesses that close permanently “will never be able to rehire their employees.”

To keep that from happening, the coalition requested emergency legislative and administrative action to:

• Repeal the Paycheck Protection Program’s 75%-25% rule, which requires that 75% of the loan’s funds go towards retaining or rehiring employees.
• Extend the eight-week period for purposes of calculating loan forgiveness.
• Extend the June 30 safe harbor date for rehiring and restoration of pay.

“These three modest changes would help ensure that the liquidity provided through the [Paycheck Protection Program] can be deployed in a manner that is most likely to allow a small business to remain operational,” the letter concluded. “Specifically, these changes would help small business owners who need capital for overdue rent payments, the restart of vendor contracts and other necessary expenses. In addition, the extended deadlines would permit a more orderly return to work consistent with the phased reopening.”

As Congress works on the next COVID-19 relief package, the ADA is urging Congress to increase the flexibility within the Paycheck Protection Program, including modifying the loan forgiveness provision to help small businesses make more appropriate decisions about staffing and payroll based on when they plan to fully reopen. The ADA and Organized Dentistry Coalition are also asking Congress to allow the loan funds to be used for purchasing additional personal protective equipment and to include emergency financial relief for 501(c)(6) tax-exempt medical and dental trade associations that have been adversely impacted by this pandemic in any new legislation.

Follow all of the ADA’s advocacy efforts in response to the pandemic at ADA.org/COVID19Advocacy.