INDIANAPOLIS — The U.S. Senate passed a $484 billion bill to replenish funding for the Paycheck Protection Program (PPP) and provide states with resources to ramp up testing for the coronavirus. The bill now heads to the House.
After less than three weeks, the Small Business Administration distributed $376 billion in relief for companies with less than 500 employees, part of the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act passed in late March.
Indiana Sen. Todd Young said he hoped that more funding wouldn't be needed but that the federal government would continue to aid small businesses until people could safely return to work.
"I certainly think it will be enough (funding) in the near term. The approach we've taken, I think it's the appropriate conservative approach to replenish our PPP funding as needed," Young said. "Obviously, supply was outstripped by demand for this popular program and we want to make sure that every small business, who requires additional liquidity, is able to meet their payroll (and) pay their bills."
Nationwide, the SBA reported that 1.6 million businesses had accessed the fund with 1,230,000 loans averaging $206,000. A majority of those loans, 74%, were for less than $150,000. SBA granted 35,990 loans in Indiana totaling nearly $7.5 billion.
The new bill earmarks $310 billion for PPP and another $60 billion in low-interest Economic Injury Disaster Loans.
But critics have pointed to large franchise restaurants taking advantage of the fund, including Shake Shack (which returned its $10 million loan), Ruth's Chris Steakhouses, Potbelly and J. Alexander's.
"I would like to see a narrow criteria included in future rounds of PPP funding, where possible. However, right now, we cannot reach an agreement on exactly what those parameters look like," Young said. "Hoosier businesses required additional funding immediately so that they would not permanently go out of business and so that their employees would receive compensation for staying home on account of public health requirements."
Young said more action was needed to ensure these larger enterprises couldn't access funding earmarked for small businesses.
"My hope is that we don't need additional funding. This is not a long-term sustainable way to run an economy," Young said. "This is a life-support mechanism to support those households and businesses that generate wealth. But I believe there is a moral imperative for us to make people whole until we contain this virus and allow people to go back to work."
Unemployment changes and challenges
Another cornerstone of the CARES Act, paying an additional $600 to every unemployed American on top of their state benefits, started in Indiana last week, though a majority will see the impact this week.
The Department of Workforce Development, overseeing the program, said it had paid nearly a half million claims in April. Over the weekend of April 17, as the additional $600 payment were phased in, the department paid $276 million in benefits. For all of 2019, the department reported paying just $230 million through the unemployment insurance assistance program.
Due to the high call volume, the department has contracted with a call center but Commissioner Fred Payne said it would implement a call-back feature to mitigate long wait times and dropped calls.
The CARES Act provided unemployment benefits for previously ineligible Hoosiers, such as gig economy workers, the self-employed and independent contractors.
Payne reported last weekthat the system to aid those Hoosiers would take more time to implement. The current system denies those categories of employees but the department would keep that information on file once the system is implemented by Thursday. Payments won't begin until May.
The department recommended applying or calling for unemployment assistance later in the week, since most vouchers and claims are filed on Sunday or Monday.
More than 450,000 Hoosiers have applied for unemployment and roughly 432,000 claims were paid in the first two weeks of April. Previously, the department reported the average benefit to be $300 with a maximum $390 benefit.
Reopening the economy
The new bill, or the second installment of the CARES Act, includes $75 billion for hospitals and $25 billion for states to expand their testing, which public health officials say will be necessary to reopen the country's economy.
Protesters have urged Gov. Eric Holcomb to reopen the state, rallying outside the Governor's Mansion on Saturday and Monday. Holcomb advised that his decision to reopen would be based on advice from health care professionals and testing.
President Donald Trump named both Young and Indiana Sen. Mike Braun to the Opening Up America Again Congressional Group. Young said his work would focus on sectors specific to Hoosier concerns, such as manufacturing and agriculture.
"The Holcomb administration has concerns about opening up too early and every Hoosier has harbored concerns about opening up too early," Young said. "It needs to be balanced against the need to go back to work because, without wealth creation, there are adverse long-term implications for our livelihoods and for our health."