Yesterday the New Jersey Chamber of Commerce sponsored a discussion program with government policy experts from the U.S. Chamber of Commerce titled “What’s going on in D.C. and how it affects your business?”. If you own a small business in New Jersey (like me) the basic question is likely ‘How bad will it be?’ This is my summary of the Chamber’s discussion.
The U.S. House of Representatives passed the Heros Act in May that included a number of provisions for small businesses. The U.S. Senate and the White House did not want to pass additional relief for small businesses. Eventually the Senate proposed, but did not pass, a number of smaller aid measures for businesses. There is no compromise between the lawmakers. The fundamental underlying issue is that a few powerful Republican Senators do not think that small business assistance is desired.
Now all CARES Act legislative protection programs for businesses and individuals have expired. The president issued executive orders but they are not having any actual impact. Treasury Secretary Mnuchin then clarified that the orders are optional so that businesses won’t feel pressure to comply with the provisions. No change is expected in the near term before the end of September.
If there is a compromise on the PPP loan program, all versions of proposals contain provisions that would be helpful to South Jersey businesses, seasonal businesses, governments, schools and nonprofit businesses.
The risk of another federal government shutdown this fall is significant. This is the ‘wildcard’. The likely event is a temporary budget measure to continue to fund government until after the election. Federal government officials recognize and are sensitive to the fact that the stalemate provides a boost to election challengers vs. incumbents.
If the economy tanks, the federal government will be motivated to make a deal, otherwise it is unlikely until after the election. (This meshes with the advice I’ve given and previously published here that businesses should be prepared to endure a recession without any government help).
Liability protection for local governments and businesses is a wide open issue. The Senate proposal includes protections but requires “reasonable efforts” does not protect from “gross negligence” as we see in a few New Jersey situations where employers violate CDC, OSHA and other labor and public protection guidelines. (Separately, I am involved in the creation of and accounting for the nonprofit group Business Interruption Group (BIG) that is cited by the President and has made national news and progress in some federal legal cases lately. So I am not independent on this issue of business liability).
The U.S. Chamber of Commerce has not made a forecast of the election outcome. The U.S. Chamber legislative departments are planning for all possible outcomes. The 53 minute presentation is now available online. August 13, 2020 – Webinar Replay: What’s going on in D.C. and how it affects your business”
I continue to offer strategic consultative services without charge during this period of crisis recovery as has been the case since mid-March. Schedule a discussion here on this web site.