Tag Archives: SBA Paycheck Protection Program

Schumer says McConnell and Republicans refuse to meet with Democrats on stimulus as GOP proposal looms

Schumer says McConnell and Republicans refuse to meet with Democrats on stimulus as GOP proposal looms
By Akayla Gardner and Phil Mattingly CNN

Senate Minority Leader Chuck Schumer said Friday that Democrats have had no contact with Senate Republicans or the Trump administration about stimulus negotiations, just days before the GOP is planning to release their draft bill.

“We have not heard a peep from (Senate Majority Leader Mitch) McConnell or the Republicans or the administration on any proposal, even though we’ve been asking for weeks and weeks and weeks,” Schumer said on a conference call with public workers and advocates pushing for significant state and local funding — a flashpoint of the looming negotiations.

Schumer decried McConnell’s decision to draft the proposal entirely within his own conference, noting that Democratic support will be necessary for any final package to pass the Senate.

“McConnell knows from the previous bills that passed in the Senate he’s got to work across the aisle,” Schumer said.

Citing the past negotiations that produced nearly $3 trillion in emergency federal funding to try and arrest the dual economic and public health crises created by coronavirus, Schumer said that when McConnell has sought to negotiate among only Republicans, “it fails.”

Pressure is mounting for Congress and the White House to pump money back into the American economy still suffering from the pandemic as the virus resurges around the country and many of the emergency measures, including enhanced federal unemployment benefits and the $660 billion Paycheck Protection Program, are set to lapse in the coming weeks.

McConnell, a Kentucky Republican, has taken a methodical approach to the next round of federal aid, in large part because his members have pushed to slow the process down as they watch how previously approved money is spent. Republicans have worked through the last two weeks to pull together the pieces of their legislation, which McConnell has repeatedly said will be focused on three primary issues: “kids, jobs and health care.”

Schumer said he has not seen the two-page summary of a central plank of the Senate GOP plan — liability protections for companies, schools and hospitals that McConnell has said must be included in any final proposal, but did tweak Republicans for its emergence. “I think it’s interesting that the first piece of the first proposal the Republicans are offering is something they negotiated with lobbyists that protects big corporations.”

The proposal, obtained by CNN, has been circulated inside the White House and among GOP senators. It would provide temporary legal protections for organizations that make reasonable efforts to comply with public health guidelines and don’t demonstrate gross negligence. Defendants would have the right to move suits to a federal court, according to the summary document, which would cover the period from December 2019 until 2024.

While Schumer didn’t lay out any red lines of his own specifically, he reiterated that Senate Democrats will push for the $3 trillion stimulus measure, known as the HEROES Act, passed by the House.

“The bottom line is we’re going to fight for the whole HEROES bill period,” Schumer said.

He told Senate Democrats on a private conference call this week there would be no negotiations without House Democrats in the room, according to a person on the call.

Judge dismisses Buffalo Diocese’s attempt to get $1.7M Covid-19 loan

Judge dismisses Buffalo Diocese’s attempt to get $1.7M Covid-19 loan
By Jay Tokasz

A federal judge in Rochester has ruled against the Buffalo Diocese’s efforts to secure a $1.7 million loan through the Small Business Administration’s national Paycheck Protection Program.

U.S. District Court Judge Elizabeth A. Wolford on Wednesday dismissed the diocese’s lawsuit against the federal agency that runs the loan program and refused to grant a preliminary injunction that would have forced the SBA into considering the diocese’s loan request.

Wolford said in a written summary judgment the “SBA did not exceed its statutory authority” in adopting a policy that excluded entities in bankruptcy from qualifying for the loans.

The diocese’s lawyers had argued that the SBA illegally excluded the diocese from applying for a share of the $659 billion Congress made available to businesses that keep employees on their payrolls during social distancing shutdown measures prompted by the coronavirus pandemic.

The Buffalo Diocese joined with the Rochester Diocese in asking the U.S. District Court for a preliminary injunction that would prohibit the SBA from denying the loan based on their bankruptcy statuses.

The Rochester Diocese sought $1.1 million from the SBA’s Paycheck Protection Program and was ineligible because it filed for Chapter 11 bankruptcy protection last September. The Buffalo Diocese filed for bankruptcy in February.

Government lawyers explained in court that the SBA adopted the bankruptcy exclusion to speed up loan processing and to ensure lenders that it wasn’t approving unacceptably high-risk loans.

Without the PPP loans, the dioceses argued that they “will be forced to lay off or furlough essential employees which will have a permanent effect” on how their Chapter 11 bankruptcy cases are administered.

The Buffalo Diocese in March eliminated the jobs of 21 employees, a fifth of its workforce, due in part to the “anticipated financial impact of the pandemic.” The cutbacks followed a 2019 fiscal year loss of $5 million for the diocese.

With Catholic Masses suspended during the pandemic, area parishes have been unable to bring in offertory collections. In turn, the parishes have been unable to meet their financial obligations to the diocese, the diocese’s lawyers said in court papers.

With stay at home directives in effect, the diocese “will struggle to continue making payroll payments,” which is the main eligibility requirement for the Paycheck Protection Program, lawyers argued.

Wolford said in her ruling that she was not convinced. She called the diocese’s explanations about the financial impact of the pandemic ban on church gatherings “vague.”

The diocese’s lawyers “point out that offerings have dropped off precipitously, but they do not state what percentage of their funding comes from parish assessments versus other sources,” Wolford wrote. “Plaintiffs further have not claimed that they need PPP funds in order to make payroll—indeed, there is no indication in plaintiffs’ papers that they have not paid their employees’ salaries or that failure to obtain PPP funds would somehow cause Plaintiffs to cease to operate.”

Lawyers for the dioceses also said that the SBA added the bankruptcy rule arbitrarily, even though nothing in the CARES Act passed by Congress and signed by President Trump limits the diocese’s eligibility for the funds.

Wolford’s decision said the CARES Act was “silent regarding the eligibility of debtors in bankruptcy to participate in the PPP” and nothing in the legislation required a bankrupt debtor be eligible.

“This detail was left by Congress for determination by the SBA,” she wrote.

Small businesses and other entities – including churches and religious organizations – that employ up to 500 people are eligible for the Paycheck Protection Program, which provides loans to cover payroll costs, rent, mortgages and utilities.

The loan, which requires no fees or collateral, is fully forgiven as long as at least 60% of it is used for payroll. If that requirement isn’t met, the loan must be repaid over five years at a 1% interest rate.

Several other dioceses around the country and some Catholic parishes in Western New York have applied for and received loans through the Paycheck Protection Program.