[Congressional Record Volume 166, Number 104 (Thursday, June 4, 2020)]
[Senate]
[Pages S2712-S2713]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               CARES Act

  Mr. CARDIN. Madam President, as the ranking Democrat on the Small 
Business and Entrepreneurship Committee of the U.S. Senate, I take this 
time to update my colleagues on the implementation of the CARES Act.
  I think all of us know that the CARES Act contained major, new 
provisions to help small businesses, and I was proud to be part of a 
bipartisan working group, with Senator Rubio, Senator Shaheen, and 
Senator Collins, that helped to craft three new programs to help small 
businesses as a result of COVID-19.
  We recognize the importance of small businesses to our economy, to 
job growth, to innovation, but we also recognize that small businesses 
are more vulnerable to an economic downturn. They don't have the 
resiliency. They don't have the deep pockets. They don't have the 
liquidity that larger companies have. If we are going to get our 
economy back on track, we have to preserve small businesses and their 
workforces.
  We suggested and the Congress passed three new programs to help small 
businesses--the Paycheck Protection Program, the Economic Injury 
Disaster Loan Grant Program, and a loan forgiveness program for 
existing and new loans taken out under 7(a), 504, or microloans.
  We recognize that all three of these tools were important. They were 
not exclusive. They worked together. PPP provides help to keep payrolls 
together. It buys 8 weeks of payroll. The EIDL Loan Program provides 
working capital for small businesses. The grant program provides 
immediate cash, and the forgiveness program allows a business to be 
able to get through these next 6 months without the burdens of having 
to pay their loans. All of that works together to keep small businesses 
viable in our community.
  Let me first talk about the Paycheck Protection Program because that 
has certainly gotten the most attention. It provided 8 weeks of payroll 
relief, plus other expenses, for small businesses in this country. It 
has been very, very popular. In fact, the original amount of money that 
we authorized for loans--about $349 billion--was quickly used up, and 
we authorized an additional $310 billion of loan authority. There have 
been 4.4 million loans issued under the PPP program for a total of $510 
billion. These loans were issued rather quickly considering the 
standing up of a new program and the volume of interest.
  I acknowledge the hard work of the Small Business Administration and 
its workers, as well as of the Treasury, in standing up this program 
and getting the money out quickly to save many, many small businesses 
in our communities.
  When we passed the PPP program, we would have hoped that 8 weeks 
later our economy would have been in a position in which small 
businesses, in large number, would not have needed additional help or 
that the program's parameters would have been adequate. That was not 
the case.
  Yesterday, this Chamber acted in a responsible way with legislation 
that Senator Rubio and I and others recommended, along with our House 
colleagues who had recommended this to our colleagues, that would give 
small businesses that have existing PPP loans the discretion to use 
those funds over a 24-week period rather than an 8-week period, 
recognizing that many of these businesses could not get up to full 
payroll during this 8-week period. We also gave greater flexibility on 
the allocation of the funds.
  Even with these changes, there have been major challenges in bringing 
forward the PPP program. First and foremost, we found--as we had, 
unfortunately, thought might happen--that the underserved and 
underbanked communities would have a much more difficult time in 
getting access to 7(a) loans under the PPP program. Quite frankly, we 
put language in the CARES Act so that the SBA would give special 
attention to the underserved and underbanked communities.
  Quite frankly, the SBA did not follow our direction. The SBA's IG 
said that the Small Business Administration did not fully align with 
the congressional intent to help the underserved and rural markets. So 
we responded. We replenished the PPP funds, and we allocated a certain 
amount of those funds directly to smaller lending institutions, 
recognizing that they have greater contact with the underserved 
communities, and it did help.
  Now, at our request, the Treasury has allocated an additional $10 
billion to the CDFIs, the community development financial institutions, 
that have better ties to the underserved community. Each one of these 
steps helped. Allocating funds to smaller lenders and allocating funds 
to the CDFI will help us get to minority small businesses. It will help 
us get to women-owned small businesses. It will help us get to veteran-
owned small businesses. It will help us get to the smaller of the small 
businesses. It will also help us get to rural small businesses, but we 
need to do more.

  That is why I have authored legislation with Senator Booker. We have 
put out a plan on what needs to be done through a discussion document, 
and it recognizes that we have to provide greater help for businesses 
in underserved communities for startup capital, for technical training, 
and for mentorship. All that will help so that, when we come out of 
COVID-19 and when we have the next economic downturn, we will have the 
financial institutions and knowledge in all of our communities to be 
able to take advantage of the tools that we make available in a timely 
way.
  Yesterday, we had our first oversight hearing with regard to COVID-19 
and the tools of the Small Business Administration. That hearing was 
outside of private sector witnesses. Next week, we will have the 
Secretary of the Treasury as well as the SBA Administrator before us. 
What we heard from one of our witnesses yesterday, Connie Evans, of the 
Association for Enterprise Opportunity, was about COVID-19. Its 
economic consequences are projected to erase decades of minority 
enterprise growth in underserved markets.
  She continued:

       To prevent this, we believe policymakers must acknowledge 
     the existing disparities in our small business ecosystem and 
     take the necessary steps to create equitable legislation to 
     ensure that vulnerable businesses survive and thrive in the 
     years ahead.

  I couldn't agree more. That is why Senator Booker and I have issued 
our discussion document that includes many ways in which we can bring 
about systematic changes to really help in the underserved communities.
  We saw, tragically, 2 weeks ago or close to 2 weeks ago, the tragic 
death in Minnesota. We have all talked about how we are going to help 
to make sure this country gives equal opportunity to all of our 
citizens, including under our criminal justice system. We also need to 
recognize that, if we are going to deal with the wealth gap in America, 
we have to deal with entrepreneurship, and this is one way we can do 
it--by building up these types of opportunities.
  Now, there is some good news in my State of Maryland that I want to 
share with my colleagues. Maryland had a very active women's business 
center. As you know, our resource partners are critically important in 
helping underserved and underbanked communities. Women-owned businesses 
are clearly in that category. We have a very effective women's business 
center that is headquartered in Rockville that helps serve Montgomery 
and Prince George's Counties and Frederick. It is doing a great job on 
behalf of women-owned businesses.

[[Page S2713]]

  Maryland, though, is a big State, and we needed more help. So I thank 
the Small Business Administration in its announcement of two additional 
small business centers in the State of Maryland. One will be in 
Baltimore. It will be housed at Morgan State University, a historic 
HBCU. That will provide, I think, tremendous help for women-owned 
businesses and minority women-owned businesses. We are also opening up 
a center in Salisbury, on the Eastern Shore of Maryland--rural 
Maryland--to help women's businesses. This is critically important in 
dealing with the gap in our communities. Resource partners are of 
critical need.
  So, as we applaud the work we have done with the PPP program and as 
we recognize we need to improve it, let's also recognize we need to 
deal with making sure there is a fair opportunity for all businesses to 
qualify. We are also going to need additional help for small businesses 
in addition to the PPP initial grant. There needs to be a second round, 
and let me tell you why.
  We thought 8 weeks would be enough with the PPP program, but we know 
that for some of the original small business loans that were taken out 
under the PPP program that, within the next 2 weeks, the 8-week period 
will expire, but we know that businesses are not yet open at full 
capacity. Restaurants cannot open at full capacity. Catering 
establishments cannot open at full capacity. Health clubs cannot open 
at full capacity. Entertainment centers cannot open at full capacity. 
We know that museums are still very much hurt, so we are going to need 
additional help.
  Yesterday, we heard from a small business owner whose company was 
helped by the PPP loan. He told us there will be additional need for 
bridge funding for small businesses experiencing unanticipated costs 
during the phased-in reopening. I agree with him. I think we are going 
to have to do more to help the small businesses in our communities.
  I have been working with Senator Shaheen and Senator Coons and others 
to say, on the second round, let's try to target the relief to those 
companies that really need it. The first round--get the money out 
quickly. We were very successful in doing that. There was a minimal 
amount of underwriting requirements by the small businesses or the 
banks. We got the money out quickly.

  On the second round, we need to be more discerning. We need to focus 
those funds on those small businesses that really need it, those in the 
underserved communities--the smaller of the small businesses. We heard 
that yesterday during our oversight hearings. Those businesses have had 
a dramatic loss of revenue. If we do that, the resources are there; we 
can help those small businesses survive, and we can do it in a way that 
will keep our economy going.
  We need to do that immediately. We shouldn't wait 2 more weeks after 
the program for many small businesses has already ended. We need to 
provide the help as soon as possible. That is another reason it is 
important that we take up the next stimulus package during this work 
period and not wait until businesses have to lay off their workers and 
may not be able to reopen.
  The PPP was only one of three tools. The second tool we provided was 
a new initiative under the EIDL Program, the Economic Injury Disaster 
Loan Program, for grants. It provides for immediate cash, which is what 
businesses need during a disaster--cash. The proposal allowed for a 
$10,000 grant to be made. We anticipated that grant would be made 
within 3 days. We put that in the statute.
  As complimentary as I have been about the SBA starting up the PPP 
program, I am extremely disappointed in the manner in which the EIDL 
Program has been handled. They did not get the money out quickly. They 
did not get $10,000 out; instead, the average grant was between $4,000 
and $5,000. And there is $10 billion still left in the coffers that 
could have gotten out to small businesses that desperately needed the 
cash, and they didn't do it in the timeframe Congress anticipated.
  The existing loan program, which existed before COVID-19, where SBA 
issues loans during a disaster, called the Economic Injury Disaster 
Loans, provides working capital. It works with PPP. PPP is not enough 
help for a small business to get the working capital and inventory they 
need. That is why we have the EIDL loans. The SBA has been very slow in 
getting the loans out. The numbers are extremely disappointing.
  Now they have set up new rules. They closed the window for 
nonagricultural small businesses. Why? I have no idea. They seem to be 
limiting loans to $150,000, although the loan provides for a $2 million 
cap. Why are they doing that?
  If the programs are going to work together, they have to implement 
this program. Congress specifically intended COVID-19 to be a disaster 
covered by EIDL. We did that in our earlier stimulus package. Well, we 
are disappointed that we haven't had greater success in the EIDL 
Program, because we know it works so much closer with the PPP program, 
and it is particularly useful for smaller small businesses and those 
that are more vulnerable.
  We had a witness yesterday, Nick Rudolph of Maryland Capital 
Enterprises, who testified and said:

       The EIDL loan is a particularly impactful product . . . 
     because of its low interest, long terms, eased credit 
     requirements and the fact that collateral is not required. In 
     a perfect world, all approved applicants would receive the 
     full grant portion regardless of number of employees.

  What Mr. Rudolph is saying is they limited the grant to $1,000 per 
worker, and, therefore, if you had 10 or fewer workers, the most 
vulnerable of small businesses, you were not able to take advantage of 
the $10,000. We hope that will be corrected.
  There is a third tool. That is loan forgiveness for existing 7(a) and 
504 loans and microloans and for loans taken out during the 6-month 
period after the adoption of the bill through the end of the year. This 
gives 6 months of debt relief for loans that can really help small 
businesses. I would like to report on how that is working, but I don't 
have a lot of numbers on that, which leads me to the need for data. If 
we are going to carry out our oversight function, if we are going to be 
able to enact legislation going forward, we need to know how the 
programs are working today, and we haven't gotten the information we 
need.
  Earlier I authored a letter to Senators Schumer and Wyden, asking the 
SBA to make that information available. Most recently, I joined Senator 
Rubio in a similar request asking the Small Business Administration to 
make this information available. I introduced legislation with Senator 
Shaheen on this issue. We need to get that data if we are going to do 
our oversight.
  This week we had the private sector witnesses; next week we have 
Administrator Carranza, Administrator of the SBA, and Secretary 
Mnuchin, Secretary of the Treasury, to ask specifically about these 
points. It will be a very, very important hearing.
  In closing, let me say that we have to continue to work together as 
we have in the past to help America's small businesses. They are 
literally the growth engine of our economy. They are the innovators of 
our economy, and they are the most vulnerable.
  The CARES Act provided incredibly important help, but we are going to 
have to pay additional attention to help our small businesses. So let's 
continue this bipartisan effort not only to help small businesses but 
to help our economy and to help our country. In doing that we will 
truly perform as we should during this national emergency.
  So I look forward to continuing to work with my colleagues on both 
sides of the aisle to pay attention to what we have already done for 
small businesses and give them the additional attention that they need.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Madam President, before Senator Cardin leaves the floor, I 
want to tell my colleague and friend on the Finance Committee that it 
has been a pleasure to team up with him to try to deal with these 
challenges in terms of getting the help out to small business people. 
We know that it has been needlessly challenging, looking back at the 
experience. I am just glad my colleague is going to prosecute the case 
until there is justice for these small businesses