[Congressional Record Volume 166, Number 95 (Wednesday, May 20, 2020)]
[Senate]
[Pages S2526-S2528]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               HEROES Act

  Madam President, at the beginning of March, we worked to get ahead of 
the COVID pandemic, and an amazing thing happened. Congress came 
together quickly and developed a broad package of measures to provide 
relief to families, workers, and businesses to weather the COVID-19 
event and the crisis that it is.

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  Coronavirus aid, relief, and economic security--those words make up 
the CARES Act--included a broad range of tools: first, direct payments 
to individuals and families; second, it expanded unemployment insurance 
benefits for the unemployed; third, lending programs for businesses of 
all sizes; and fourth, targeted tax relief to help businesses continue 
operations and keep workers on the payroll.
  Our objective for the tax provisions in the CARES Act was twofold: 
first, to help individuals, families, and businesses weather the storm 
caused by the stay-at-home governmental decisions, and second, lay as 
much of a foundation as possible for restarting the economy once 
businesses could start to reopen and Americans could get back to work.
  The CARES Act came together through a bipartisan process, and that 
process took place over 8 short days and ultimately and amazingly 
passed the Senate 96 to 0 on March 25. The House passed it by a voice 
vote 2 days later, and President Trump signed it into law that same 
day.
  As chairman of the Finance Committee, my approach for tax relief was 
to provide as much liquidity as possible and as quickly as possible. 
For individuals, that meant providing the Treasury Department with 
authority to issue nearly $300 billion in economic impact payments to 
families across the Nation. This economic impact payment was $1,200 for 
an individual, $2,400 for a couple, and $500 for each child. That went 
out in checks or direct deposit. It also meant giving individuals 
access to cash in retirement accounts, suspending required 
distributions from retirement accounts already hit by steep declines in 
the stock market, and giving employers more flexibility to help 
employees with student loan payments.
  Many of these tools are similar to ones made available to help 
families recover from natural disasters in recent years. So we were not 
reinventing policy for this pandemic; we were making use of things we 
had already tried before. Each of these changes I just mentioned is a 
tool that can be implemented very quickly to help families access the 
care they need to get through these difficult times.
  Going through the business tax relief measures, our approach was to 
modify existing provisions of the Tax Code, easing limits and 
restrictions so that businesses could apply for this help easily and 
quickly. The key was for businesses to keep cash on hand if they hadn't 
already filed or give refunds to give them the liquidity to keep the 
doors open, the machinery running, and most importantly, employees 
paid, at least to the greatest extent possible.
  Most of these tax measures have been employed in previous economic 
crises and natural disasters. Again, these policies were not 
reinventing the wheel; we were taking advantage of things that had 
worked in the past.
  Particularly, we expanded the ability of businesses to use net 
operating losses--or, as we call them in tax jargon, NOLs--just like 
Congress did in 2002 after 9/11, in 2005 for taxpayers affected by 
Hurricane Katrina, and again in 2009 after the financial crisis.
  Those were actually bipartisan relief efforts just like the CARES 
Act. These provisions are temporary. They are designed to terminate 
after the recovery is in full force.
  While it seems longer, you have to remember the CARES Act was enacted 
just over 7 weeks ago. In that time, Treasury has distributed economic 
impact payments far faster than expected. Americans have received 
approximately 140 million economic impact payments worth $249 billion. 
Over 4.3 million small businesses have been approved for more than $500 
billion of loans under the Paycheck Protection Program and businesses 
of all sizes have started to use the tax tools that we provided for 
their liquidity.
  But in that time, the critics have also done what they do best: They 
criticize. The media has seized on an opportunity to perpetuate every 
negative story that critics can manufacture. You can imagine my 
surprise when Democrats criticized the net operating loss carryback 
provisions in the CARES Act. Oddly, Democrats previously supported the 
last three bills, where we expanded the net operating loss carrybacks 
in 2002, 2005, and even in 2009--in the last instance, with all-
Democratic rule.
  I don't recall, in any of those instances, any partisan attacks from 
Democrats about this previously bipartisan, anti-recessionary policy 
tools. So why now? Sadly, that irresponsibility has led our Democratic 
colleagues in the House to pass legislation that would take back 
important tax tools that we have provided in the CARES Act to the tune 
of $254 billion, and that is a tax increase on the American businesses, 
and with more taxes, less employees.
  It is hard to understand how the House Democrats think that this 
policy makes any sense. Imposing tax increases when you have a 
downturn--imposing a quarter of a trillion dollar retroactive tax 
increase on businesses in need of cash to restart their operations as 
States begin to lift shutdown orders--is a recipe for further disaster, 
as opposed to the disaster we are already in.
  It makes one think that House Democrats don't want an economic 
recovery, at least until they can defeat President Trump. Imposing such 
a tax increase when the country is facing unemployment levels not seen 
since the Great Depression fails the common sense test.
  It is even more disturbing to the extent that the House Democrats' 
proposal targets small businesses and other pass-through entities. 
Aren't these losses just as real as larger corporations and their need 
for liquidity possibly even greater?
  According to the Tax Foundation, more than 90 percent of American 
businesses in recent years operate as pass-through entities. Pass-
through businesses include some of those hardest hit by this pandemic 
we are in, like farmers, restaurants, manufacturers, retailers, and 
healthcare providers. They employ over half of America's workers. Yet 
the Democrats want to take them on.
  It is critical that these businesses also survive this pandemic to 
ensure that Americans have jobs to return to as it becomes safe to go 
back to work. I have heard some critics even suggest that allowing 
small businesses and pass-throughs to use their net operating losses is 
kind of a tax gimmick or loophole. Apparently, they don't understand 
that these are real economic losses that businesses incur because there 
isn't enough income to cover payroll, rent, utilities, and other fixed 
expenses.
  The whole goal of the CARES Act is to help businesses tap cash paid 
as taxes in prior years when times were very good, so that they can 
survive through this current crisis. When we drafted the CARES Act, we 
didn't pick winners and losers, and government shouldn't pick winners 
and losers. The tools generally apply to all types and sizes of 
businesses, from farmers and sole proprietorships to partnerships, to 
LLCs and S corporations, to the large corporations. They apply across 
all industries, since nearly every sector is bearing the burden of 
stay-at-home and shutdown orders across our entire Nation.
  Most importantly, we didn't try to decide which jobs were more worthy 
of saving than other types of jobs. Our goal was to help preserve as 
many jobs as possible, regardless of whatever business they were in. 
Those objectives were the right ones.
  This partisan tax increase also flies in the face of anti-
recessionary fiscal policy 101. Find me a credible economist who says 
that we should raise taxes in a normal recession. It is just common 
sense not to. In a normal business cycle downturn, tax increases hurt, 
rather than help, the recovery. Why double down now, as the House is 
doing, in the greatest and sharpest economic contraction in modern 
history?
  The House Democrats have reverted to partisan politics, as usual, in 
the middle of the worst pandemic in more than 100 years and the worst 
economic crisis in nearly that long. Maybe, they should think about 
former President Obama's support for this kind of anti-recessionary 
fiscal policy back in 2009. What former President Obama said then 
should apply now: Don't raise taxes in a recession.
  Nevertheless, I am hopeful that we can maintain the bipartisan spirit 
of the CARES Act in the Senate as we chart the next steps to reopen the 
economy and get Americans back to work.
  While some businesses will feel the impact of this pandemic more than 
others, none of these businesses are

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doing well. They all deserve as many tools as we can provide to weather 
this storm. What is more, employers across the country who have been 
relying on the CARES Act shouldn't be deterred by the misguided tax 
hike proposed by the House Democrats. The messaging bill that the House 
just passed can't be allowed to undermine access to capital needed to 
reopen their businesses, bring back employees, and win back the 
customers that made them successful before the pandemic attack.
  And to the Democratic critics, I say this: Let's put away the 
partisan attacks. Let's put away the political pandering. Let's keep 
working for the good of the country, so our families, businesses, and 
economy really can come out of these tough times on a strong footing 
and with the best shot at a rapid recovery.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Perdue). The Senator from Iowa.
  Ms. ERNST. Mr. President, I ask unanimous consent to use my military 
rucksack in my speech.
  The PRESIDING OFFICER. Without objection, it is so ordered