Senator Vin Gopal | April 18, 2020 | Asbury Park Press |
This past week, two big headlines came out of Washington. First, as the IRS started depositing the $1,200 economic impact payments (“stimulus checks”) into Americans’ bank accounts, Congress immediately began debating the merits of a second payment. Second, the Payroll Protection Program (PPP) — a critical effort to keep American workers on payroll while helping small businesses stay afloat — ran out of money.
Both programs, while essential as short-term measures, have significant flaws. This is a prime opportunity for Congress to improve both how these stimulus checks are provided and how the Payroll Protection Program is administered before a second round of payments goes out.
While well intentioned, the Payroll Protection Program could be vastly improved. As we saw this week, the program is operating a limited budget, and scarce administrative resources mean that long delays and widespread denials are the norm, rather than the exception. That’s why we need to ensure that this program is targeted at the businesses that need it the most, rather than companies that can get through this crisis without a debilitating impact on their finances.
Right now, any business can apply for the Payroll Protection Program, regardless of how COVID-19 has impacted its checkbook. Take a coffee shop that hasn’t served customers in weeks, or a gym that hasn’t had clients for over a month. They need — and deserve — these funds first. Restaurants are also at a significant disadvantage in the PPP program, who may have challenges hiring back their employees.
But right now, an accounting firm that’s working remotely with a full slate of clients has the exact same right to these funds as they do. So does a thriving supermarket where business is booming — even if it’s not providing its cashiers with a cent of hazard pay. That’s not right, and it’s certainly not efficient.
America’s small businesses don’t need a universal handout. Instead, we need a targeted program that helps those in need first.
The IRS’s $1,200 economic impact payment program faces a different challenge. Unlike the Payroll Protection Program, these checks are half-benefits, half-stimulus — meaning that, if these funds aren’t necessary for bills, families are still encouraged to spend them at local businesses, keeping those businesses and our economy afloat.
But the current income cap of $75,000 completely ignores individuals and families who may have received a greater compensation last year, but are now out-of-work or severely underpaid. Remember: New Jersey has one of the highest costs of living in the country, and $75,000 goes a lot further in some other parts of the country than it does here, especially in the New York metropolitan area. In addition, under the current federal program, a parent caring for an adult child with a disability will not receive any additional support. Other vulnerable groups are also left out. If this stimulus program is going to kickstart our economy, it needs to attack the problem from every direction — and every household — possible.
Finally, states and municipalities should begin to receive direct federal assistance based on the impact of COVID-19 in their backyards. As two of the nation’s earliest hot zones, New Jersey and New York have been hit hardest by the COVID-19 pandemic. Even so, the first federal stimulus plan gave our states the same per-capita funds as Nebraska and Wyoming. Imagine if, after superstorm Sandy, New Jersey had received the same funds as Idaho — even as our shore lay in ruins. That’s not right, and it’s not fair, especially considering that New Jerseyans no longer have the SALT deduction to help us.
As Congress moves forward to assemble our nation’s second stimulus package, it is vital that these revisions be made.
I urge our Republican House members Chris Smith (Fourth District) and Jeff Van Drew (Second District) to make this case to President Trump and Senate Leader Mitch McConnell. I also urge our Democratic senators and House Delegation to make the same case to Speaker Nancy Pelosi. The federal government still has the opportunity to do the right thing by our New Jersey communities.
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