The Corona Virus continues to wreak havoc throughout the United States and the world. Cases are growing rapidly and deaths are increasing. The reaction of government, at least at the state level, has been to take steps in an attempt to contain the spread of the virus and it seems the majority of people are taking these actions seriously, although there appears to be a significant number of people who still resist and are likely facilitating the spread. The federal government is getting better at the process, but we still have a President who provides erroneous information which is contradictory to scientists on the stage with him at the daily briefings. One of the drugs POTUS was pushing was discovered early last week to have poisoned some of the patients receiving it. Dr. Fauci has been clear that more research and testing needs to go on before these purported cures are appropriate for use as a treatment regimen, yet POTUS keeps giving false hope.
Cares Act (Senate 3548) which was signed on Friday strengthens the U.S. Small Business Administration’s 7a loan program. It also provides increased unemployment insurance, provides direct payments and other assistance.
Going back to the U.S. Small Business Administration 7a loan program, this program provides forgivable loans for payroll between February 15, 2020 and June 20, 2020. This will allow employers to continue to pay their employees which means those employees will be able to pay mortgages, rent, utilities, buy groceries, etc. An excellent piece of legislation that will help us all.
On the flip side, there is a bill pending in the New York State Senate (S 8125) which is a constitutional and practical nightmare. It in effect gives free rent for 90 days and then forgives mortgage payments. The net effect is to create a bureaucracy to resolve the inevitable issues and to inflict economic harm on landlords and banks. This is a political scam.
Unemployment claims are skyrocketing which brings with it the threat of the loss of health insurance. The next relief package needs to address this issue utilizing the forgiveness provisions noted previously by loaning funds to individuals so they can pay for health insurance and if they do, then that loan is forgiven.
One of the phenomenal aspects of this process economically are the number of jobs being created by employers like Amazon, grocery stores, the transportation industry and others. Hopefully, it creates opportunities for some of those who were laid off.
At the state level, there is the Work Share Program which allows an employer to reduce the number of hours worked by employees, paying them for the time actually worked, and then allowing them to receive unemployment insurance. In many cases, this will ensure that the employee receives somewhere in the range of 65%-75% of their salary, which is far better than being laid-off with only unemployment insurance. These programs are immediate so there is no waiting period. I recommend that you look at the DOL website to help the employees and your business.
The U.S. closed the border with Mexico after having closed it with Canada, allowing only “essential people” to cross the border, but allowing goods to move back and forth across the border. If you have questions, DHS has on their website definitions and examples of who qualifies for essential status and how goods will move.
China thought it was coming out of the pandemic and getting back to work except that customers are now saying, please hold the shipments. Many of those customers live in countries experiencing the impacts of COVID-19 like the Chinese were weeks ago. The result, goods are piling up in factories and on docks. We all continue to struggle.
CBP announced a delay in tariff payments which is good news for importers and consumers. Goods should cost less. The Wall Street Journal in a story about this reiterated what it has long said, tariffs are paid by consumers not China as POTUS continues to falsely claim and his supporters accept without question. I do not mind if they pay more, but I do not want to.
Just so you know, there is great humor trending on the internet, not just predictions of doom. Get a laugh every day. This new realty tests all of our resolve and relationships. Today I passed 2 cars parked in an empty parking lot about 10 feet apart with one occupant standing in between, a new form of tailgating—they looked pretty subdued
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.
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