Press Release

May 6, 2020
Cardin Continues Push for Increased Transparency in Federal Small Business Relief Programs

WASHINGTON — On the heels of his attempt to pass legislation that would provide additional transparency and accountability of the federal government’s COVID-19 small business relief efforts yesterday, this morning, U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Ben Cardin (D-Md.) joined POLITICO’s Morning Money Virtual Briefing to discuss the need for increased transparency from the U.S. Small Business Administration (SBA), the need for increased testing capacity to reopen the economy, the need for Congressional actions to help state and local governments, and his priorities for future COVID-19 relief legislation.

On Tuesday, Senate Republicans blocked legislation introduced by Cardin and Democratic Senators Jeanne Shaheen (N.H.), Sherrod Brown (Ohio), Chuck Schumer (N.Y.), Joe Manchin (W.Va.), and Jack Reed (R.I.) that would SBA to provide Congress and the public with timely, detailed data on the agency’s COVID-19 small business relief programs, including the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) and Emergency Grants Program, and the Debt Relief Program.

Click here to watch the interview

Cardin calls for additional federal aid for state and local governments, and urges swift Congressional action to ensure the continuation of core government functions:

“This is not a bailout. This is to allow government to perform essential services that the people of this country need in order to combat COVID-19, to get our economy back on track, and to keep people safe. This isn’t a bailout. State and local governments need balanced budgets. We’ve already discussed the 20% unemployment number, think of what will happen to their income tax revenues. We also know that the hospitality industry has essentially been shut down, state and local governments rely on revenues through tourism and hospitality to fund a good part of their local services. We need to make sure that policy protection, fire protection, and emergency medical protection is in our communities to deal with COVID-19. We have to make sure the Medicaid program remains strong because it’s the first line of defense in our healthcare needs. If we don’t allow state and local governments to provide these essential services, it will fall back on the federal government and it will fall back on our country. So this isn’t a matter of bailing out a state or local government, it’s to allow them to be our partners in the fight against COVID-19, so we can deal with this pandemic and get our economy back on track.”

Cardin on his legislation to increase transparency and accountability in federal small business relief efforts:

“I’ve introduced legislation with Senator Shaheen and Senator Schumer that would require SBA to make daily information available…Today, we will have a conversation with Administrator Carranza to try to get that information, so we want to see it. I know that the Trump Administration has also said that they want to have more transparency about who has gotten these loans. I’m afraid that we’re going to have to legislate this, but I would hope that we would get the cooperation of the agencies and this information will be made available.”

Cardin on how Trump Administration’s lack of transparency in small business relief harms small businesses:

“They clearly have not made it a priority to get that information out to us, and we want them to make it a priority. We recognize that SBA is doing many new things, but they must make this information available. We can’t modify this program without knowing how the funds were allocated. There have been many requests that we make it easier for businesses to use PPP funds. There have been many requests that we expand the eligibility of PPP. There are also concerns about how we’re going to help small businesses after the funds are exhausted, what are we going to do for those in need and how do we determine those in need? Without having this information, it’s very difficult for us to design that type of relief.”

Cardin on the need for Congressional oversight of federal small business relief efforts:

“Well clearly the Senate has a lot of work to do but unfortunately we have come back and we have not yet done any COVID-19 related activities. We’ve done some nominations, and for that we didn’t need to come back this week. We do need to be here, though, to deal with the COVID-19 pandemic and the economic consequences. I hope that we will see oversight done by our committees. The small business committee needs to have a public hearing in order to assess how the programs are working. We are trying to make sure that we get those scheduled. So far it’s been a slow start from the point of view of what we’re doing on the pandemic [so far this week.]”

Cardin on additional funding for PPP:

“It’s going to need more money. It’s clear to me that we will run out of this most recent replenishment of funds. $310 billion was added, and there’s still over $100 billion remaining, so they’re still processing these loans. It’s a very popular program. We wanted to get this money out quickly, and the money is getting out quickly. In fairness to the Small Business Administration, this was a brand new program with hundreds of billions of dollars and millions of applications for these new forgivable loans, so it has been a challenge, as any new program would be a challenge. But money has gone out there. We’ve already seen over $500 billion of loans in PPP, so the program is working. The question is who is getting the relief: are underserved communities getting their fair share, particularly those that are underbanked?”

“I expect it will be a matter of days, not weeks, when they run out. I don’t know because we don’t know the information as to who is still waiting or which small businesses want to apply.”

Cardin on how much more relief small businesses will need from the federal government:

“I don’t know, because I don’t have the numbers. One of its major shortcomings is that SBA has not provided Congress and the American people with the specific information as to what industries are getting the funds, what size businesses are getting the funds, how much money is needed, how has the nonprofit community benefited from the program, what is going on with regard to the special NAICS code 72, which are our restaurants and hotels, we need to have that type of information. Where are the loans geographically being given? So yes, we expect more is needed, but SBA has not given us a good estimate as to how much more is needed, especially to make sure we reach underserved businesses that do not have relationships with traditional lending institutions.”

Cardin on improvements Congress should make to PPP:

“As I’ve said several times, we need all the information before we make a judgment. That’s why it’s critical that we get the data. When we conceived the program, we thought businesses would be able to get up and running after 8 weeks, but we know now that’s not the case. We know now that it’s unlikely that if you’re a restaurant in a community where the governor has ordered businesses to remain closed, it is unlikely you can get up to full operations in that 8-week period. And if you are operating, you now have social distancing, which means you’re going to have fewer customers than you had before, so we recognize that we’re going to have to give greater discretion on when we expect businesses to be up and running and be able to bring back their full payroll in a productive way. So looking at that 8-week period, looking at a little more flexibility on when that period starts and ends and when you need to bring your full workforce back in order to get maximum forgiveness, is certainly something Congress needs to take a look at to provide greater relief to businesses that cannot be at full operations. That’s one area I think Democrats and Republicans recognize we need to take a look at and we want to provide additional help to small businesses.”

Cardin on the importance of adequate testing capacity to reopen the economy:

“When reopening, we really need to follow the public health experts’ recommendations as to the best way to control the spread of this virus. Then, we have to do it in a way that the public health officials tell us to do it. With social distancing, it’s not going to be reopen and everyone gets together as they did before COVID-19. We’ve seen already as some states have begun to reopen that instructions are not being followed.”

Cardin on the risk of premature reopening causing a new spike in COVID-19 cases:

“That is a risk factor that our public health experts are telling us about. That would be the worst thing we can do, not only as a public health risk, but also for our economy.”

Cardin on importance of bipartisanship as Congress addresses COVID-19:

“Let me just remind everyone that the CARES Act started on a partisan line by Senator McConnell bringing out a bill without negotiating with Democrats. That was unfortunate and caused a delay, though ultimately we did work together to produce a stronger bill. He also tried to modify the CARES Act, again on a partisan basis, and we had to object, but ultimately we got a much fairer, bipartisan product that helped underserved communities. I say that because Republicans complaining about Speaker Pelosi is somewhat disingenuous, because of the way they proceeded, at least initially. We hope that Speaker Pelosi will reach out not only to Republicans, but to the Senate to bring about a package that can pass and be signed by the president. That’s what we need to do. We get a stronger package when we work in a bipartisan manner and I have confidence that the Speaker will work in that regard.”

Cardin on the need for swift action from Congress to pass the next economic relief bill:

“I hope we can begin working on the next round now, and within a matter of days—no longer than a week or two—we can have the framework and a path forward to pass the next stimulus package. We must get working on it immediately.”