Casten Statement on H.R. 7010 Paycheck Protection Program Flexibility Act of 2020
Washington, D.C. – Today, U.S. Representative Sean Casten (IL-06) released the following statement after he voted in favor of H.R. 7010, the Paycheck Protection Program Flexibility Act of 2020.
Casten said, “The intent of the Paycheck Protection Program (PPP) was to create a direct incentive for small businesses to retain or rehire workers, and I am pleased that the House was able to come together to extend the expense forgiveness period from eight weeks to twenty-four weeks. This additional time will give businesses the flexibility they need to fully utilize their PPP loans but still reopen safely.
While the provisions in the Paycheck Protection Program Flexibility Act will certainly benefit businesses, the bill isn’t perfect, and I am particularly concerned about the retroactive application of lower payroll ratio requirement to existing loans.
The Paycheck Protection Program was designed and intended to provide employers with the ability to use low-interest rate loans to cover eligible expense like payroll, rent, and utilities during the COVID-driven shutdown, with the option to convert that loan into a grant so long as certain requirements were met. One of the original requirements for loan forgiveness stipulated that at least 75% of the PPP loan funding must be used for keeping employees on payroll. To date, businesses have taken up nearly $519 billion of taxpayer funds to date to meet that goal. While there may be a case for lowering the 75% test for new loans, I am very concerned that lowering this to 60% for existing loans will have the practical effect of taking up to $77 billion out of the pockets of employees who were the intended recipient of those funds. I urge the Senate, upon consideration of the Paycheck Program Flexibility Act, to ensure American workers are being properly protected.