Anticipated approval of $2 trillion in emergency legislation means small businesses can continue to pay employees, laid-off workers will receive full pay for four months and local governments and health care providers can continue to fight the coronavirus pandemic.
“This is not a moment of celebration but rather one of necessity,” Senate Major Leader Charles Schumer (D-N.Y.) said on Wednesday morning after senators and the White House reached agreement on a bill.
The House of Representatives still must provide approval before the bill moves forward for President Donald Trump to sign.
While Schumer said the bill was “far from perfect,” it does provide immediate relief. However, Gov. Andrew Cuomo on Wednesday morning said New York has been short-changed: an appropriation of $3.8 billion won’t offset the $9 billion to $15 billion shortfall.
“I spoke to our House delegation this morning and I said, ‘This doesn’t do it,’ ” Cuomo said. “We need the house to make adjustments.” He said the House version would send $17 billion to New York.
Members of the House still need to review the Senate version and were not expected to vote on the bill until Thursday.
Still, when approved, the relief package will ease some fears for workers, small business owners and CEOs of major corporations.
“While this is not a cure to all of the economic adversities that individuals and businesses are facing, it is a welcomed and needed patch,” said Vincent K. Yacuzzo, executive vice president and chief financial officer at Canandaigua National Bank & Trust. “In addition to the direct financial benefits provided, consumer and business confidence and overall states of minds should be positively impacted.”
The “Corona 3” legislation includes a small business rescue plan, with $375 billion allocated for forgivable loans and grants. The intent of the relief is to ensure small businesses and nonprofits can maintain their existing workforce and help pay other expenses during the crisis. Self-employed workers, independent contractors and sole proprietors also will be eligible for assistance.
“I think having the money to sustain businesses, sustain people and their families, and also allow our companies to help fight this coronavirus, those three things as priorities, if they’re all in the bill and can be supported, it’ll be a huge win,” said Robert Duffy, CEO and president of the Greater Rochester Chamber of Commerce.
The payroll relief is critical to small business owners, employees and the economy, according to Lynn Mucenski-Keck, partner at The Bonadio Group. With approval of new small business loans, the federal government will essentially fund four months of payroll, from March 1 through June 30, by way of debt forgiveness.
“To me that’s the biggest impact of this bill,” Mucenski-Keck said. “This potential bill provides debt forgiveness for the costs of paying payroll. The point of that portion of the bill is to keep people off unemployment.”
The Bonadio Group alerted clients to that potential relief on Monday, asking them to delay any layoff or furlough plans until Congress acted, because the debt relief provision would be a game-changer.
“I talked to several businesses this week and they said, ‘I’m not going to let those people go—it sounds like there’s relief coming,’ ” Mucenski-Keck said.
Keeping small businesses solvent and people on payrolls fuels the economic engine. The Bonadio Group will host two free webinars on available Small Business Administration loans and also what the emergency legislation contains.
“Small businesses make up a substantial portion of our economy,” said Faheem Masood, president and CEO of ESL Federal Credit Union. “Federal actions geared toward supporting small businesses, as well as the aggressive actions of the Federal Reserve, represent measures that strive to mitigate the impacts the coronavirus has on our economy.
“These solutions, along with the financial hardship relief efforts of local financial institutions, demonstrate that a collaborative effort is needed to guide our community through these uncertain times.”
There is help in the Senate bill for individuals and families, with payments of $1,200 for individuals earning less than $99,000 and $2,400 for couples earning less than $198,000.
For workers who have been laid off, the bill creates “unemployment insurance on steroids,” Schumer said. New York’s weekly maximum currently is $504, but under provisions of the Senate bill there would be four months where unemployed workers would receive up to $600 more to ensure they continue to receive their full salary.
“I love the fact of helping those who have been laid off with extending their pay and benefits,” Duffy said.
Schumer said $128 million will come to Monroe County from the $150 billion expenditure relief fund established to help state and local governments, which have seen dramatic declines in sales tax revenue. Medical facilities also will receive money to fight COVID-19.
“The more than $40 billion of additional help on the way to New York is essential to save lives, preserve paychecks, support small businesses, and much more,” Schumer said. “These critical dollars will inject proverbial medicine into our state, city and localities throughout Upstate New York, to deliver much-needed resources, right now, that can help combat the coronavirus.”
Amit Batabyal, an economist at Rochester Institute of Technology, said the package does three things:
» Create an understanding that the United States government will do whatever is necessary to support the nation’s economy;
» Provide support for people most in need with an influx of cash that should then stimulate demand for products, and;
» Provide guidance for the rest of the world and international markets.
“Domestically, this will create, in one sentence, a huge infusion of demand. It can only be positive for the economy,” Batabyal said.
While the economy may have entered the toll road to recovery, it’s a very long road. That’s why John R. Buhrman, partner at Harris Beach PLLC in the law practice group, offered this advice:
“One thing I would say to clients is that I would try to hold off on any drastic plans at his point to the extent they can, understanding that businesses are under a lot of financial pressure because, to the extent there will be direct aid in addition to potential loans, some of that, if not most of it, may be related to job-retention requirements.”
Includes reporting by Diana Louise Carter, Bennett Loudon and Velvet Spicer.