Democratic leaders were told to hold firm on the Paycheck Protection Act, or PPP, with a "fix" piece of legislation apparently scheduled for a vote in coming days. Union presidents said, "do not negotiate away incentives to retain, rehire, pay or continue health benefits for workers," during the coronavirus crisis.
In a sent in a letter to House Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer, AFSA President Ernest Logan and 14 other union presidents wrote, "we believe in your good intentions to bring relief to America during this unprecedented health and economic crisis, but we write with urgency for you to stop yet another giveaway to big business at the expense of workers."
"We could not be more supportive of small business and less supportive of the proposed 'fixes' to the PPP being proposed for passage this week. Originally designed to keep people working by protecting their paychecks and continuation of benefits, the proposed industry-backed changes would make a mockery of that goal," the letter said. "The 'tweaks' are actually a massive retreat on paycheck protection and employee retention, and a full-on redirection of federal aid meant for workers toward debt service to lenders and unjustified protections for investors. The PPP would become the IPP—Investor Protection Plan."
The union presidents noted in the letter that news accounts reported the bill, sponsored by Reps. Dean Phillips (D-Minn.) and Chip Roy (R-Texas), would extend the period PPP recipients could spend the funds from eight weeks to 24 weeks, and eliminate the SBA requirement that they use at least 75% of funds for payroll expenses, including benefits.
"While the time extension by itself is not objectionable, the elimination of the 75% rule would turn a program intended to stabilize small businesses and encourage worker retention into a slush fund for giant hotel and restaurant franchisors, over-leveraged hotel REITs, the banks that loaded them up with debt then securitized it, and the sophisticated real estate investors who bought the commercial mortgage-backed securities," the letter stated.
"Rather than fixing the inadequate job-retention incentives built into the PPP, the corporate-backed bill simply jettisons the job retention goal altogether. It moves us in exactly the wrong direction, by creating a disincentive for employers to retain or rehire workers, which increases the unemployment rate and exacerbates the strain on state Medicare programs.
"Instead of giving up on the job retention goal of the PPP, we implore you to stay focused on defeating the Trump-McConnell agenda of cutting unemployment benefits, gutting workplace safety standards, and most egregiously, eliminating any employer liability for unsafe conditions for workers and customers," union presidents said.
"Ask yourself: what are we getting in return for giving up on job retention in the PPP? Answer: not much. American workers are being starved back to work while the system is once again tilted to those who stand the most to gain at the expense of the rest of us. They get what they want—whether stripping out support for Planned Parenthood or paying dividends to Wall Street investors. We get zero.
"We cannot sit idly by as Trump and the GOP use this crisis as an excuse to strip away every gain the labor movement and progressives have fought for and won over many years of struggle," the presidents' letter said. "Rolling back the 75% provision in the PPP would be a major setback in the battle we are fighting to protect American workers, their families, their livelihoods and their very health.
"It would also be a terrible precedent that would frustrate our efforts to ensure that the trillions of dollars in federal rescue aid under the control of the Federal Reserve Board are directed towards stabilizing businesses, and alleviating unemployment, housing insecurity and food insecurity—and do not become just another round of handouts to banks and big business.
"Now is not the time to fold; now is the time to fight," the presidents stated. "We respectfully ask you to hold firm for job retention as a goal in the PPP as well as any other federal coronavirus rescue programs. We will fight alongside you to do so."