The U.S. Chamber of Commerce is calling on Congress to temporarily cancel payroll taxes paid by employers and make loans available to businesses, as companies grapple with the coronavirus’ financial fallout.
“No family and no business should go bankrupt just because of the temporary disruption in income caused by the coronavirus,” said Neil Bradley, chief policy officer, on a call with reporters.
The Chamber CEO Tom Donohue sent a letter to President Trump and Congress, pushing them to cancel employers’ payroll taxes for March, April and May.
The Chamber of Commerce supports the House coronavirus response bill, the Families First Act, which the Senate is set to consider this week — but now, the powerful lobbying group says it is looking ahead to the next economic relief package.
“If we provided assistance to help individuals and families — what assistance can we provide to businesses to manage the drop in revenue so that they can continue to support their employees,” said Bradley.
President Trump has repeatedly called for a payroll tax cut to shore up the economy amid the coronavirus crisis, but lawmakers have been skeptical about the plan. National Economic Council director Larry Kudlow told reporters on Monday the administration would be discussing the proposal with Congressional leaders.
A payroll tax holiday “provides cash flow and liquidity to both employers and employees. It also has some economic incentives — you’ll get to keep more of what you earn,” said Kudlow.
If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!
— Donald J. Trump (@realDonaldTrump) March 13, 2020
Democratic lawmakers have said the measure wouldn’t help employees who are laid off or lose hours because of the coronavirus.
When asked about the resistance on Capitol Hill, the U.S. Chamber argued while payroll tax cuts are generally proposed to stimulate the economy by giving consumers more money to spend —this proposal would be designed to make sure employers have money to keep paying their employees.
“Importantly, an employer would not have access to that money, because they wouldn't owe it, if they weren't currently paying their employees,” said Bradley. “This is really a mechanism focused on how do we give businesses of all sizes, additional liquidity to be able to continue to pay their employees.”
The group also wants to expand and streamline loan programs for small businesses, which have lost money because of the virus, by removing some requirements that can slow down the process. These loans could be used to cover fixed debts, payroll, accounts payable, and other bills.
“There's virtually no corner of the United States, where small businesses aren't experiencing a revenue disruption,” said Bradley.
In addition, the group wants Congress to pass legislation to create credit facilities to provide loans and loan guarantees to companies with more than 500 people.
“The most important thing we can do for American workers today is make sure that their employer is in a position to continue cutting them their paycheck,” said Bradley.
On the Monday call, Chamber leaders pushed back on the idea that they’re calling for a bailout.
“In the midst of a complete loss in revenue and a liquidity crisis, the best way to be able to support employers and their work and being able to pay their employees is to provide them access — not to grants— but to loans which they will pay back,” said Bradley.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.
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