Trump administration considering executive action for small-business relief

The White House is considering executive action to help small businesses by extending an expired loan relief program or providing other financial assistance, according to former senior administration officials and small-business lenders.

The move would add to President Trump’s efforts to go around Congress to aid households and companies. Previously, he’s sought to suspend payroll taxes, extend unemployment benefits, slow evictions, and defer student loan payments.

The structure of the small-business executive action is not yet clear, but the White House could simply extend the Small Business Administration’s Paycheck Protection Program, or PPP, which shut down earlier this month, or provide more funding through the SBA’s Economic Injury Disaster Loan program, individuals with knowledge of the situation said.

The Trump administration is eager to use an executive action to provide small businesses with temporary relief and put pressure on Congress to pass the next coronavirus economic relief package, which will include small-business relief, the individuals said.

The PPP, which was first launched in early April as part of Congress’s $2.3 trillion CARES Act, closed to new applications in early August, with over $130 billion left over in unused funds. The program provided loans that will be forgiven if at least 60% of the loan went to paying for worker salaries and the loan was spent over a 24-week period. Some small-business leaders told the Washington Examiner they would like to see the $130 billion in leftover PPP funds tapped into via an executive action to help struggling businesses.

“Trump is interested in more executive orders that he can use to get the economy going faster,” said Stephen Moore, an outside economic adviser to the president.

“He’s looking for ideas to get more stimulus into the economy, and he’s frustrated with the do-nothing Congress,” said Moore, who is also a Washington Examiner opinion columnist.

Moore met with the president last week to discuss the implementation of Trump’s previous executive actions but did not specifically talk with Trump about a new executive action for small businesses.

Trump’s Small Business Administration itself would likely be supportive of such an executive action.

“An executive action to help small businesses would be really exciting and helpful,” a Small Business Administration official said.

“It would also be a catalyst for Congress to do something. Otherwise, we just have to put our heads down and wait for something,” the official said. The SBA did not respond to requests for official comment.

More than half of small businesses nationwide are worried about having to close permanently, while 45% say they are not comfortable with their cash flow, according to a survey by the U.S. Chamber of Commerce released at the end of July.

Some lawyers who work with small businesses said such an executive action would help struggling businesses and could be done in a manner that is within the president’s authority.

The Trump administration could use an executive action to remove the $150,000 limit on Economic Injury Disaster Loans from the SBA and give more money to struggling businesses through the program, said Tom Sullivan, the U.S. Chamber of Commerce’s vice president of small-business policy. A shortage of money and an overload of applications led the Small Business Administration to limit the size of EIDL loans in May.

The Economic Injury Disaster Loan program is a long-standing Small Business Administration program that provides low-interest, fixed-rate loans that can provide emergency assistance to small businesses, but the loans are not forgivable, unlike PPP loans. Congress gave the program more than $50 billion in funding through relief bills in April, but the program was soon overwhelmed by demand.

“We would be hugely supportive of a small-business executive action to help small businesses survive through the EIDL program or extending the PPP. Maybe it could also shame Congress into taking action,” said Sullivan.

Sullivan said the chamber would also be strongly in support of an executive action that would allow a second round of forgivable small-business relief loans through the PPP.

Senate Small Business Committee Chairman Marco Rubio, a Republican from Florida, already has a plan that would restart the small-business relief program and allow businesses that have seen their revenues decline by 50% become eligible to receive a second small-business relief loan. This is expected to be a part of Congress’s next economic relief package. Rubio did not respond to requests for comment.

Some lawyers say that the recent Supreme Court ruling that shielded President Barack Obama’s executive action on Deferred Action for Childhood Arrivals program, or DACA, should give Trump the precedent and ability to use a similar executive action to help small businesses.

“In light of the DACA decision, I think the president has new and different authorities with executive actions now,” a lawyer with a small-business advocacy firm said.

“Why not give it a try with small-business relief? The courts will likely side with him,” the lawyer said.

The lawyer also cited the landmark King v. Burwell case as giving Trump the power to rewrite the laws written by Congress for the $2.3 trillion CARES Act and extend the deadline of the PPP. The lawyer said King v. Burwell essentially allowed the IRS to rewrite or reinterpret the Affordable Care Act, which Congress passed, and so Trump could do the same to help small businesses by merely extending the date of expiry of the PPP small-business relief program.

The White House did not respond to requests for comment.

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