Aid talks continue as US CEOs urge Congress to help small business

Companies like Walmart, Facebook, Microsoft, Google-parent Alphabet and Starbucks warn of a 'catastrophic' impact on the economy and employment if a new round of federal aid is withheld

by AFP
Aid talks continue as US CEOs urge Congress to help small business
House of Representatives Speaker Nancy Pelosi talks during her weekly press conference at the US Capitol in Washington, DC on July 31, 2020. Congress is currently locked in debate over the size and composition of the next spending bill, with Democrats fighting to retain the $600 additional weekly payment made to unemployed workers. Photo: Mandel Ngan / AFP.

The White House continued talks with Democratic leaders in Congress on Monday over a new round of emergency spending, as more than 100 American business leaders urged lawmakers to lay aside partisan bickering and help small businesses suffering during the coronavirus pandemic.

Leaders of companies like Walmart, Facebook, Microsoft, Google-parent Alphabet and Starbucks warned of a "catastrophic" impact on the economy and employment if a new round of federal aid is withheld from companies dealing with the devastating damage from the Covid-19 shutdowns.

Meanwhile, House Speaker Nancy Pelosi met again Monday afternoon with Treasury Secretary Steven Mnuchin and White House chief of Staff Mark Meadows, and called the two-hour meeting "productive."

Senate Majority Leader Chuck Schumer said the sides are "moving closer together" but after reviewing the numbers that each side is pushing for in a new aid package, "There are a lot of issues that are still outstanding."

It remained unclear whether a deal would be agreed soon, and while debate continues, millions of workers have lost the additional $600 weekly federal unemployment payments, and families are at risk of losing their homes after a moratorium on evictions expired.

Pelosi pushed back against a Republican proposal to cut weekly unemployment benefits to $200 a week which she said does not meet the needs of American families.

"Millions of children in our country are food insecure. Millions of people in our country are concerned about being evicted tens of millions of people are on unemployment insurance." she said.

But she the talks are "moving down the track. We still have our differences, we're trying to have a clearer understanding of what the needs are."

Financial ruin

In the letter to congressional leaders, the US CEOs said small firms largely do not have enough cash on hand to wait for a coronavirus vaccine and face "potential financial ruin that will make the nation's current economic downturn last years longer than it must."

"Small businesses are too critical to our country's economic strength to let fail," the letter said. "At this moment of crisis, we urge you to transcend partisanship," to pass a spending package.

They called for federally-guaranteed loans, which can be at least partially forgiven and last for more than two-to-three months, for all small businesses that need it, especially for minority-owned firms.

Congress in late March authorised several lending programs in the CARES Act to help companies and workers weather the crisis.

The Treasury Department announced on Monday that it intends to borrow an extra $1 trillion through the end of September "in anticipation of additional legislation being passed in response to the Covid-19 outbreak," as well as another $1.2 trillion in the final three months of the year.

Assistant Treasury Secretary Michael Faulkender acknowledged that "another round of federal fiscal aid can bolster the economy." 

"However, such measures should be targeted to promote growth, reduce disincentives to work, and mitigate the risk of creating future imbalances," he said. 

And they "should be temporary because the pandemic is temporary," he added in the statement about the crisis that erupted in March.

Mnuchin said on Sunday he opposes support for state and local governments, despite facing a massive increase in expenditure caused by the pandemic.

"The Democrats, right now, are insisting on over a trillion dollars" to state and local governments, and "that's something that we're not going to do, to bail out those states that had financial issues," Mnuchin said on ABC's This Week.

AFP