Rep. Gallego Proposes New Economic Assistance Plan for Small Businesses
PHOENIX, AZ – Today, Rep. Ruben Gallego proposed a new stimulus plan to help small businesses during the COVID-19 pandemic. In a letter to Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer, Rep. Gallego laid out his Small Business Economic Assistance Program, which would immediately provide across-the-board payments to all small businesses.
“The Paycheck Protection Program is failing our nation’s family-owned and often underserved small businesses. Too often, large corporations jump the line and receive millions of dollars while hundreds of thousands of small businesses are getting left behind,” Rep. Gallego said. “Just 17 percent of PPP funding went to loans of less than $150,000. We need to level the playing field and immediately send checks to every business and nonprofit with under 50 employees so they can pay their employees and continue to be the backbone of our nation’s economy.”
Under Rep. Gallego’s plan:
- The Federal government will directly send all eligible businesses and nonprofits with under 50 employees $5,000 per employee.
- At least 80% of that money must be used for employee compensation and the rest can be used for other costs, including rent, mortgage, or utilities.
- Payments will be distributed through the U.S. Treasury’s Electronic Federal Tax Payment System (EFTPS), which already includes the banking information of all businesses, non-profits, and the self-employed which pay employment taxes.
- Distributing direct payments to businesses and nonprofits that have paid employment taxes ensures that assistance gets to underserved companies that have had issues receiving PPP funds while excluding shell corporations that do not have employees and therefore should not receive funding.
- In order to prevent fraud and duplication, businesses and nonprofits that have already received money through the Paycheck Protection Program (PPP) or were established after January 1, 2020 will not be eligible for this funding.
“We must get out of the business of picking winners and losers and delegating primary responsibility for protecting our nation’s most important economic engine to large financial institutions,” the letter said. “My proposal would be a more efficient way of fairly distributing money to many businesses that would ultimately qualify for the PPP but are being left out of the current system.”
The full letter with additional details on the program can be found here.