WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Finance and Banking Committees and a former business executive, released the following statement on a coronavirus response plan to support American workers amid the economic fallout from the novel coronavirus (COVID-19):
“The novel coronavirus and the steps that are necessary to protect public health will have far-reaching and severe human consequences. Workers who cannot continue to earn a paycheck during the crisis will face enormous hardship. Furthermore, consumer spending is responsible for almost 70 percent of overall economic activity. The dramatic drop in spending we’ve seen in recent days will further devastate our economy. While we take the necessary steps required to protect public health, we cannot ignore their impact on our neighbors, businesses and communities. We must take bipartisan action immediately.
“We’ve already taken steps to secure better medical care and testing, and I’m working hard to provide more robust assistance for workers regarding paid family and sick leave, and expanded UI benefits – especially for gig workers and independent contractors.
“But these efforts alone aren’t enough. Much more needs to be done – and done quickly – in order to stave off the worst effects of a deepening economic recession. We have to get cash flow back to our small and mid-sized businesses so that they can remain open, retain their employees, and survive through this public health emergency. Nearly 18 million people are employed in industries whose revenues are severely curtailed and are vulnerable to layoffs. Many businesses, particularly small and mid-sized firms, are running down their cash and credit lines. As we see more areas enforce tighter social distancing restrictions, this problem is only set to get worse.
“I am proposing that we immediately set up a small and mid-sized business liquidity facility, jointly run by the Treasury Department and Federal Reserve, to provide companies affected by the virus with federally-guaranteed loans at low rates throughout the crisis. The loans would be delivered through local financial institutions and backed by up to $1T in federal financing. A few important elements of this proposal include:
· Simple terms and underwriting requirements in order to quickly deliver cash flow to these businesses;
· Protections to ensure that any company taking a loan is required to retain a large portion of its workforce; and
· Some specific mechanism to avoid any moral hazard and hold financial institutions accountable.
“If we do not take action immediately, thousands of American businesses and millions of their employees are at enormous risk. I look forward to working with my colleagues in the coming days to provide them the assistance they need to weather the current crisis.”