Congress Turns Attention Back to COVID Relief During Lame-Duck Session
TLDR: As Congress returns to work following President-elect Joe Biden’s victory last week, policymakers may finally be turning their attention back to providing economic relief to Americans affected by the coronavirus pandemic. Small businesses and U.S. workers have already waited months for policymakers to offer a viable stimulus package, and it’s well past time for lawmakers to unite behind a proposal that provides long-term support for the nation’s startup ecosystem.
What’s Happening This Week: Congress is readying for a potentially contentious lame-duck session that will include continuing negotiations on a stimulus package to support Americans and small businesses affected by the ongoing coronavirus pandemic. While Senate Majority Leader Mitch McConnell (R-Ky.) said he’d like to reach a relief deal before the end of the year, he told reporters last week that the declining jobless rate and other economic factors signaled the need for a smaller package. Despite Majority Leader McConnell’s comments, Federal Reserve chair Jerome Powell told reporters last week that it was critical for policymakers to offer more COVID-related relief in order to better support the economy and job growth. And House Speaker Nancy Pelosi (D-Calif.) already said that a skinny relief bill “isn’t anything we should be looking at.”
Although Speaker Pelosi and Treasury Secretary Steven Mnuchin spent weeks discussing the framework for a bipartisan agreement, policymakers were unable to reach a deal before the election because of disagreements over the scope of relief. House Democrats, backed by Pelosi, passed a $2.2 trillion bill through the lower chamber last month, but Majority Leader McConnell declined to take up the legislation. Senate Republicans last month also introduced a slimmed down $500 billion relief bill—which would, in part, have authorized $258 billion for a second round of Paycheck Protection Program (PPP) loans to support small businesses—but the measure fell short of the 60 votes needed to advance.
President-elect Joe Biden has already begun highlighting his priorities for a new coronavirus relief package that would include additional relief for small businesses and extend the enhanced unemployment benefits that expired in July.
Why it Matters to Startups: With coronavirus cases surging throughout the nation and bipartisan relief negotiations stalled, entrepreneurs are in desperate need of emergency assistance. It is critical for policymakers to pass bipartisan legislation that enhances and expands upon some of the previously offered relief proposals in order to support struggling startups, small businesses, and entrepreneurs through what is shaping up to be a turbulent winter.
While some in the startup community were able to take advantage of limited financial relief, including PPP loans, offered through the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law in March, policymakers have failed to extend many of the critical provisions included in this bill. And the lack of long-term economic support—such as another round of forgivable loans for small businesses and an extension of unemployment benefits for U.S. workers who have lost their jobs—means that many small businesses are once again facing a perilous financial situation.
In a survey Engine conducted last month, a 46 percent plurality of the startups who responded said they needed emergency assistance to keep their businesses open through the end of the year. While policymakers debate the scope of relief, entrepreneurs are already being forced to make tough choices—and these decisions will only become more difficult over the coming weeks and months. Lawmakers on both sides of the aisle support additional financial relief for small businesses affected by the pandemic, but the lack of progress on an agreement means that startups will need more support and more targeted relief from Congress moving forward. That’s why it’s no surprise that startups—especially in our survey—want policymakers to offer additional economic relief proposals beyond PPP loans.
Since states first began issuing stay-at-home orders in March, Engine has been speaking with entrepreneurs and lawmakers about the proposals needed to effectively support the startup community. As part of these ongoing conversations, Engine developed a roadmap for recovery that includes a variety of alternative policy proposals that would offer long-term support to startups in future COVID stimulus packages. This roadmap, in part, includes more expanded forgivable loan programs beyond PPP, investor tax credits, and a designated “startup fund” to better direct relief to nascent companies that are forced to compete with more-established companies for assistance.
It’s critical for policymakers to ensure that startups and entrepreneurs receive the long-term assistance needed to weather the pandemic. Startups, in particular, play a critical role in supporting the nation’s economy and creating jobs, but they must receive the assistance they need now in order to drive our economic recovery. Policymakers must finally act—and the startup community is closely watching.
On the Horizon.
The Senate Commerce Committee is holding a hearing at 2:30 p.m. this afternoon to consider the nomination of Nathan Simington to the Federal Communications Commission.
The University of California, Berkeley School of Law is holding a symposium on “Technology Law as a Vehicle for Anti-Racism” this Thursday at 9 a.m. PT.
Incompas is holding a webinar this Thursday at 3 p.m. to discuss the impact that the 2020 election will have on broadband policy moving forward.
Engine and Stand Together are hosting a virtual discussion next Tuesday, November 17th at noon to discuss how the tech sector is addressing society’s biggest challenges.
Engine is hosting a webinar next Thursday, November 18th at 4 p.m. to discuss access to capital policy and how startups can work with policymakers to drive solutions to capital access barriers. We will explore some of the challenges that startups face when accessing capital, the unique roadblocks faced by underrepresented founders, and how COVID-19 has impacted the startup community. RSVP here.
