The latest from Washington, D.C., on the legislative and regulatory responses to mitigate the economic consequences of COVID-19. Find out what bills have passed, descriptions of key provisions impacting print and packaging, and gain access to compliance resources and Federal agency guidance. Track the industry’s federal advocacy efforts on your behalf and receive timely grassroots action alerts to ensure your company’s voice is heard on Capitol Hill.
Updated July 30, 2020 @ 2:00 PM
Federal Reserve Announces Extension of Emergency Programs
Worth noting if your company is utilizing emergency lending facilities: This week the Federal Reserve announced that it would extend numerous emergency lending facilities through December 31. These facilities were set to expire on September 30. The extensions apply to the Primary Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Term Asset-Backed Securities Loan Facility, the Paycheck Protection Program Liquidity Facility, and the Main Street Lending Program. The Municipal Liquidity Facility is already set to expire on December 31, with the Commercial Paper Funding Facility set to expire on March 17, 2021.
Updated July 23, 2020 @ 12:30 PM
GOP Responds to HEROES Act; Outlines Senate and White House Agreement
The cards are finally on the table; let the negotiation commence. This week the White House (led by key negotiators Treasury Secretary Mnuchin and White House Chief of Staff Mark Meadows) and the Senate Republican conference released its much-anticipated legislative outline for what is expected to be the final round of economic stimulus prior to the fall election. In response to the massive HEROES Act (House Speaker Nancy Pelosi’s version of stimulus legislation), the outline is extremely scaled down with a major focus on appropriating funds for testing and education ($235 billion), along with another round of individual stimulus checks (dollar amount and eligibility TBA), and employer/finance provisions. Keep in mind that this is the GOP starting point. There will be intense negotiations with Pelosi and Senate Democrat Leader Chuck Schumer — and advocacy on Capitol Hill by PRINTING United Alliance — over the next couple of weeks that will likely result in significant changes to the final legislation. (Note: Internal debate and negotiation amongst factions within the Senate GOP also is occurring.) Expect the deliberations and final votes to slip past the targeted date of July 31 and into the first week of August (at least). Below are the key employer/finance priorities laid out by the White House and Senate Republicans:
- Extended enhanced unemployment benefits, but less than $600 per week and eventually phased to align with an individual’s lost income;
- Immediate and/or streamlined PPP loan forgiveness for loans under $1 million; second round of PPP loans with lower employee threshold (300); expansion of loan forgiveness expenses (to include operating costs);
- New working capital loan for small business as alternative to PPP (no “double dipping”)
- Enhanced employee retention credit; tax deductions for employer purchases of COVID-19 testing, PPE and related supplies; increase business meal deduction from 50% to 100%.
- COVID-19 liability shield for employers in the form of an exclusive federal cause of action; plaintiffs must show gross negligence or willful misconduct; simple negligence not a standard. Plus, a cap on award damages related to COVID-19 lawsuits.
Not in the GOP outline? Appropriations for USPS losses related to the pandemic and loss of business mail volume; this is a point of negotiation between the HEROES Act and Senate GOP bill. PRINTING United Alliance will focus on ensuring the final stimulus legislation includes: legal liability protection for printing companies acting in good faith to provide safe workplaces; cash influx for USPS tied to proof of loss due to pandemic; alignment of unemployment benefits with lost income; spur business sales activity like trade shows and travel, and financing/tax provisions to help employee retention and business continuity as the printing industry slogs through this economic phase of the COVID-19 pandemic.
Updated June 12, 2020 @ 9:20 AM
On June 10, Treasury Secretary Steven Mnuchin and U.S. Small Business Administrator Jovita Carranza testified before the Senate Committee on Small Business & Entrepreneurship on the implementation of Title I (loan programs) the CARES Act. Committee Chairman Marco Rubio (FL) commented that it was the first time a Treasury Secretary has appeared before his panel, noting the critical aspect of small business to the nation’s economic survival of the COVID-19 pandemic. Here are some main take-aways from the Q&A with Senators:
If you have a PPP loan now, the government is vowing to make the forgiveness application process easier for you. Mnuchin stated affirmatively that variable degrees up to total forgiveness will be given to loan applicants who spend at least 60% of funds on payroll (as opposed to the previously mandated 75%; it also tripled the time to use funds from eight to 24 weeks). Plus, several Senators implored Treasury and the SBA to reduce the 11-page forgiveness application form to a more manageable form that won’t require small businesses to hire lawyers and accountants to navigate. Mnuchin noted there is a third-party loan forgiveness calculator available (one is example is here). Don’t have a PPP yet? There is still $130 billion in available funds.
Speaking of PPP loan forgiveness, you can apply now. Mnuchin clarified that PPP loan recipients do not need to wait for the allowable 24 weeks to apply for forgiveness. Once the PPP money has been spent, a business is allowed (and encouraged) to being the process. Senator Kennedy (LA) stressed the point that there is concern on Main Street and at banks that the Federal government will be looking to “catch” banks and “double-cross” small businesses in a complex forgiveness program; Mnuchin affirmed that the Administration’s goal is to help Main Street utilize the PPP loans as Congress intended. He cited the new “safe harbor” provisions as one that should make forgiveness more straightforward for loan recipients.
Why is EIDL on idle? Several Senators grilled Administrator Carranza on the status of the EIDL loan program and noted frustration of non-agricultural small businesses that they cannot get answers on applications or approvals. Senators Cardin (MD), Rosen (NV), and Hawley (MO) specifically asked pointed questions on this topic. She blamed glitches and capped loan amounts on the fact that 5.4 million EIDL applications had been in the queue since March, and, unlike PPP, there was not an expansion of financial institutions to handle the surge. Carranza stated that there were 5.4 million EIDL applications in the queue since March, and that all backlogged applications will be in loan processing portal by next week. (New applications are currently limited to agricultural businesses.)
More help is on the way — but focused on Recovery and Reopening. Mnuchin, while not delving into specifics or timing, did state the Administration supported another round of economic stimulus. He emphasized the strategy should be more targeted to specific industries seeking recovery as opposed to the blanket emergency survival approach used in the early stages of the pandemic. Potential new stimulus provisions Mnuchin mentioned were employee tax credits and a second round of checks to individual taxpayers, though Congress will ultimately decide specific provisions to be included in a legislative relief package.
Updated June 4, 2020 @ 4:23 PM
PRINTING United Alliance (PrU) is applauding last evening’s vote in the US Senate to pass H.R. 7010, the Paycheck Protection Program (PPP) Flexibility Act, by unanimous consent (UC). The bipartisan legislation was originally passed by the US House of Representatives last week by a vote of 417-1. PrU member companies who had received PPP loans had alerted the trade association to provisions that were becoming unworkable as the effects of the pandemic wore on, and PrU communicated these concerns to lawmakers. One key problem for companies who accepted loans upon opening day of the PPP program (April 3, 2020) was that the eight-week timeframe to utilize the loan was up last Friday. The House and Senate thusly attempted to move fast by passing a uniform bill that did not allow for amendments.
However, the fate of the bill was murky early this week as a two Senators placed holds on the bill (any one Senator can object to a bill and prevent passage by UC.) Additionally, Senators raised concerns regarding a glaring drafting error that would inadvertently cancel out the proportional forgiveness process that was legislated upon creation of the original PPP. Senate Small Business Committee Chairman Marco Rubio secured agreement from the Treasury Department that the error could be corrected by administrative regulation, but warned that the Senate may need to re-introduce and re-pass legislation if such technical corrections hit a snag to ensure the original intent of the PPP loan program remained in law. There was no additional funding to the PPP at this time, nor was there any expansion of eligibility for applicants. As of June 3, the US Small Business Administration reported $130 billion in remaining funds that were left following the second round of cash infusion to the program.
Following is a summary of H.R. 7010’s key provisions, published courtesy of the American Institute of CPA’s:
- Current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will have a 24-week covered period, but the covered period can’t extend beyond Dec. 31, 2020. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
- Under the language in the House bill, the payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met. Rep. Chip Roy (Texas), who co-sponsored the bill in the House, said in a House speech that the bill intended the sliding scale to remain in effect at 60%. Senators Marco Rubio and Susan Collins indicated that technical tweaks could be made to the bill to restore the sliding scale.
- Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
- The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
- New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.
- The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.
Updated May 6, 2020 @ 4:45 PM
Fantastic stories abound about printing and graphic communication companies that are retooling on a dime to produce pandemic mitigation products, such as personal protective equipment (PPE) like face shields. Other safety products include hospital gowns, floor graphics to encourage social distancing or creative printed plexiglass shields for use in retail or restaurants. It’s all moved so fast that many companies are just now stopping to give a hard look to potential legal liability associated with manufacturing these products.
While there is a Wild West uncertainty about what a “litigation pandemic” might look like as the country reopens, there is a piece of certainty today for printers producing PPE: the little-known PREP Act.
Officially known as the Public Readiness and Emergency Preparedness Act, the law authorizes the US Health & Human Services Secretary to issue a declaration to provide specified product liability immunity. It has been used in past outbreaks related to Anthrax and Ebola virus. Secretary Azar issued a COVID-19 declaration of the PREP Act in mid-March (and made it retroactive to February 4, 2020). It is limited to a particular product list and those that are under delivered upon contract with federal, state, local or tribal governments. (There are also some patent litigation liability provisions.) If your company is making and selling pandemic-related safety or mitigation products, you may wish to consult your attorney to know what liability shields pertain to your company under the PREP Act declaration.
Updated April 24, 2020 @ 11:25 AM
Congress has re-loaded the small business loan fund known as the Paycheck Protection Program (PPP), available to businesses with fewer than 500 employees. The original $349 billion-dollar fund was quickly depleted as printers and other Main Street businesses rushed to apply for the forgivable loan lifelines.
This week, the Senate and House both voted to add $310 billion to replenish the fund. At press time, President Trump had vowed to sign the bill into law as soon as possible.
There was no disagreement that the small business loan program needed to be recapitalized; however, there was a nearly two-week partisan stand-off over carving up the dollar amount to provide set-asides for underserved businesses, hospital funding, and financial assistance to state and local governments (the latter three were all Democrat demands).
The negotiated result earmarks $60 billion in PPP funds for small lenders (half for lenders with assets lower than $10 billion; half for lenders with assets between $10-$50 billion). Additionally, $75 billion will go to hospitals and $25 billion will pay for increased coronavirus testing.
The Senate vote was unanimous; the House vote had 5 detractors: four Republicans, including the Chairman of the Freedom Caucus, voted no as did one Democrat, Rep. Alexandria Ocasio-Cortez (D-NY). GOP-turned-Independent Rep. Justin Amash (I-MI) voted present. There is wide expectation that the new funds will also go quickly as small businesses rush to attain loans; further funding will require future authorization by Congress and the Trump Administration.
Updated April 21, 2020 @ 3:25 PM
Five days after the Paycheck Protection Program ran out of money and after a high-profile partisan standoff, Congressional leaders have reached a deal. Known as “Stimulus 3.5,” this legislation is an interim pandemic relief bill that extends the SBA loan program originated in the CARES Act (or “Stimulus 3”).
Here is the broad stroke outline of the deal:
- In addition to increasing the Paycheck Protection Program from $349 billion to $659 billion, the deal also increases funding for Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.
- It also sets aside the specified funding for Insured Depository Institutions, credit unions, and community financial institutions.
- A $100 billion set aside for hospitals (a key demand by Democrats eventually agreed to by Republicans) was is also included in this bipartisan deal.
- The Senate is set to pass the legislative deal late this afternoon (4/22) by unanimous consent; the House of Representatives is requiring Members to return to Washington, D.C., on Thursday, 4/24, to vote on the legislation in person.
- Technical corrections to the Paycheck Protection Program and additional funding requests are expected to be addressed in a follow-on piece of legislation referred to on Capitol Hill as “Stimulus 4.”
Updated April 17, 2020 @ 4:00 PM
Printers and packagers have been specifically included as essential workers in the updated Guidance on the Essential Critical Infrastructure Workforce by the United States Department of Homeland Security’s Cyber Security and Infrastructure Agency (CISA) released on April 17, 2020.
Printing Industries of America (PIA) petitioned the agency to recognize printing and packaging's essential nature along with the myriad of printed materials necessary to support the nation’s other critical infrastructure sectors during the COVID-19 pandemic.
Earlier versions of the CISA guidance implied printing and packaging companies were essential as part of critical manufacturing supply chains, but absent an explicit definition, PIA member companies have faced confusion or work stoppages as individual states and municipalities issued a patchwork of stay-at-home orders. In several cases, print was excluded by certain states and the industry was forced to petition governors to amend the original order. This process has created havoc for the industry, its employees, and customers.
While CISA’s guidance is not law nor a binding government regulation, it serves as an important benchmark by providing a standard definition of essential workers and encourages adoption by governors, county officials, and mayors. Over 40 states and numerous localities have enacted stay-at-home orders, many of which direct closures of non-essential businesses. CISA estimates that approximately 75% of states have adopted its guidelines to create a more harmonious approach to determining which types of businesses remain open.
From the onset of this pandemic, SGIA and PIA companies have sought to strike a delicate balance between remaining operational to support other critical infrastructure sectors while protecting public health and ensuring workplace safety. The CISA guidance will help ensure that the 700,000 print and packaging workers in supply chains supporting critical manufacturing sectors can remain an essential part of the American workforce.
Updated April 16, 2020 @ 4:15 PM
The Paycheck Protection Program well has run dry as of the morning of April 16th and the industry can officially say “We told you so…” PIA and over 160 other industry trade associations made an urgent April 15th plea to Congressional leaders to set aside brinksmanship and partisan debate over adding additional provision to a bill to increase funding to the SBA loan program by $250 billion. Democrats appear to be holding out for additional funding for state and local governments and insisting the delivery of those funds be attached to the SBA increase. While there are certainly worthy recipients in this time of crisis (and technical corrections needed to improve the workability of the Paycheck Protection Program), PIA is urging Congress to move single-mindedly forward on legislating a simple fund increase as soon as possible to keep the loan program delivering assistance to Main Street. Full text of letter appears below:
April 15, 2020
Dear Speaker Pelosi and Leaders McConnell, Schumer and McCarthy:
The undersigned organizations thank you for the prompt adoption of the Paycheck Protection Program (PPP) under the CARES Act and ask that you move quickly to authorize additional funding for the program. While there are many improvements that can and should be made to the PPP – and some companies have not even applied yet due to difficulties with, or uncertainty about, the program – there is unquestionably additional demand for this program that current funding cannot provide. Congress should act expeditiously to assure that the PPP will have the resources it needs to sustain America’s small business economy through the COVID-19 pandemic.
In just a few weeks, the PPP has emerged as a central and effective response to the economic damage resulting from COVID-19. PPP loans are providing a vital source of liquidity to more than a million individually and family-owned businesses whose operations have been curtailed or shut-down by stay- home orders and other government actions taken in response to the virus. These businesses, in turn, are using the loans to keep millions of Americans employed.
According to the Small Business Administration, however, banks have already committed most of the $349 billion provided to capitalize the PPP, and it is likely the program will run out of money within the week, leaving millions of additional businesses without the funds necessary to keep their workers employed.
Please act now to authorize additional funding for the Paycheck Protection Program so that these vital loans can continue to ensure that additional workers are able to keep their jobs and small businesses are able to avoid bankruptcy.
Updated April 15, 2020 @ 11:05 AM
The impact of the pandemic on the US Postal Service — ironically, one of the most necessary and dependable government services in this time of national crisis — is receiving major attention, which is great. Unfortunately, it's also become highly politicized with President Trump and key conservatives decrying a potential "bailout" for the agency. PIA and its allies appealed to Secretary Treasury Mnuchin in a letter this week noting that the $10 billion loan granted to USPS in the CARES Act will not be enough to sustain mid- to long-term operations. USPS says it anticipates a $13 billion loss from COVID-19, by end FY ’20. It claims the loss will expand to $23 billion by end FY ’21, more than consuming all available liquidity.
PIA is working feverishly to reframe the issue from "bailout" to "business" policy. Our letter noted, "A huge number of imperiled small businesses and nonprofits rely upon USPS, and would not survive its decline, suspension or higher rates. Any substantial reduction or suspension of postal services would also exacerbate the financial stress experienced by consumers and impact national morale."
Updated April 14, 2020 @ 12:40 PM
In another sign of unprecented times, the Supreme Court of the United States announced it would hear cases via teleconference for the first time in history. The Court, which last met in publicly on March 8th, has been conducting business via telecommuting like millions of other Americans. Cases will be heard on May 4 – 13. Given the lifetime appointment nature of the justice’s jobs, it’s not surprise that six of the nine justices are all over age 65 (an age group especially vulnerable to the harshest outcomes of COVID-19). Reportedly, all are healthy at this time.
Updated April 10, 2020 @ 12:10 PM
Manufacturers across all sectors are seeking to repurpose equipment and adapting product lines to meet demand for items necessary to the COVID-19 pandemic response. Certain medical supplies, such as personal protective equipment (PPE), are in critical demand. Global supply chains are interrupted. Printers and packagers in particular are looking at utilizing capacity to meet the current high demand for such products, and use of 3D printing is spurring development. In response, the Federal Drug and Food Administration (FDA), has issued guidance on “Technical Considerations for Additive Manufacturing” outlining recommendations for 3D-printed PPE like masks, gowns, clothing, plus accessories and components of medical devices. The guidance is published in a FAQs format and available here.
Updated April 9, 2020 @ 2:20 PM
Printing and packaging small businesses that are customers of Wells Fargo are in a better position today to access Paycheck Protection Program loans. Wells Fargo, which has approximately 3 million small business clients and claims to be the largest small business ender in the country, quickly reached a statutory cap and was forced to stop processing loan requests within days of joint Treasury Department-SBA program launch. The cap was specific to Wells Fargo and a result of regulatory punishment due to the bank’s past practices.
Yesterday, the Federal Reserve Board announced that “due to the extraordinary disruptions from the coronavirus,” it would temporarily modify the growth restrictions on Well Fargo so that it can get back to providing small business loans under the pandemic relief program. The changes do not otherwise modify the 2018 enforcement action against the financial institution.
Updated April 8, 2020 @ 11:00 AM
As noted on Monday, alarm bells sounded over the weekend regarding concern that the $349 billion authorized via the CARES Act to support the Paycheck Protection Program (SBA loans) would be quickly exhausted due to high demand by small businesses.
Senate Majority Leader McConnell moved quickly (and surprisingly, catching House Speaker Nancy Pelosi and Democrat Leader Schumer off guard) by stating the Senate would vote by unanimous consent on Thursday, 4/9, to authorize a fresh $250 billion to sustain the loan program — with no additional changes or extraneous funding. The White House jumped on board, as well, sending a formal letter of appeal for additional funds.
Speaker Pelosi quickly caught her footing and is demanding that additional language be added to the half-page draft Senate bill to fund: hospitals ($100 billion), state and local governments ($150 billion), and SNAP (Supplemental Nutrition Assistance Plan) (15%). Plus, Pelosi wants $125 billion of the new $250 funds set aside for farmers, family-, women-, minority-, and veteran-owned small businesses.
House Majority Leader Hoyer has said the House could vote by unanimous consent (House GOP leadership seems to be on board with this idea), which would allow passage of a bill without requiring House members to return to Washington, DC to cast a physical vote. Keep in mind, though, any one Member of Congress has the power to derail this plan and demand an in-person vote.
Updated April 7, 2020 @ 12:15 PM
Anecdotal feedback to PIA indicates that experiences of “small” (fewer than 500 employees) printing and packaging companies seeking loans via the Paycheck Protection Program have varied widely since the initiative launched last Friday. New questions have emerged over the first four days of the program. In response, the Small Business Administration (SBA) and Department of the Treasury have committed to providing timely additional guidance to both borrower and lender questions. The guidance, which was published on April 6, is in a FAQs format and is posted online here. It will be updated regularly as the need for further clarification arises.
Keep in mind that this guidance is simply that: guidance.
It is not law, nor will the US government challenge lender actions or individual bank rules that do not conform to this guidance. It is simply SBA’s and Treasury’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rule. Similar to the Department of Homeland Security’s CISA guidance, the intent of the FAQs is to encourage uniformity. PIA will continue to relay relevant feedback from the industry to the Administration regarding this program.
Updated April 6, 2020 @ 3:15 PM
Don’t panic; the money won’t run out. That was the message tweeted by President Trump on April 4th in relation to the Paycheck Protection Program (aka SBA loans) launched last Friday. Specifically, Trump tweeted:
“I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule…”
The president was referring to the deep demand evident by the onslaught of loan applications made by small businesses ailing from the sharp economic fallout from the Coronavirus pandemic. According to the US Small Business Administration (SBA), as of Saturday, 13,699 loans valued at more than $4,300,000,000 had been issued. Bank of America, one of the leading lenders, said today that it has received more than 178,000 applications worth almost $33 billion, about 9.4% of the total available in the $349 billion program authorized by Congress in the CARES Act.
Access and a cap on funding continues to inspire concern bordering on panic for many small businesses. For example, while the CARES Act defines small businesses as 500 employees or less, Wells Fargo is only issuing Paycheck Protection loans to businesses with 50 or fewer workers. The SBA is rushing to add more lenders. Over the weekend, the SBA says it has reactivated 30,000 licenses for community banks and credit unions of all sizes to allow participation in the loan program.
President Trump is not the only high-profiled political leader to acknowledge the $349 fund may not be enough to help small businesses across America. House Speaker Nancy Pelosi and Chairman of the Small Business Committee Marco Rubio (R-FL) are both advocating that Congress will likely need to authorize additional funds to support the Payment Protection Program.
Updated April 3, 2020 @ 1:50 PM
“Rocky” is an understated adjective to describe today’s rollout of the Federal government’s Paycheck Protection Program (SBA loans). The Treasury Department and Small Business Administration did not provide guidance to lenders (including a last-minute interest rate change from .05% to 1% due to banks balking at participation) until approximately 7 PM on the eve of the program launch; a revised loan application form was also released.
By 9:00 a.m. this morning, only one of the four largest US banks (Bank of America) had an operational loan application portal; others are expected to come online later today and into next week. There is a first-come, first-serve panic building amongst small businesses with fewer than 500 employees (the vast majority of printing and graphic communications companies) regarding disbursement of the $349 billion assistance fund authorized by Congress in the CARES Act. A spokesperson for the Consumer Banking Association stated lenders are “moving heaven and earth” to get small business loans up and running.
One bright spot on launch day? Community bank lending. By 12 P.M. EDT, over $875,000,000 in loan applications had been processed — mostly by community banks — according to a tweet by Treasury Secretary Mnuchin. As a reminder, you can access Printing Industries of America’s Paycheck Protection Program FAQs for more details.
Updated April 2, 2020 @ 11:50 AM
Tax Credits
The federal government’s implementation of the massive coronavirus response laws continues this week. In addition to rolling out Paycheck Protection Program FAQs and loan application forms for small businesses, the US Treasury Department and Internal Revenue Service (IRS) also unveiled details on the Employee Retention Credit, the purpose of which, like the Paycheck Protection Programs, is to encourage businesses to keep workers on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
Unlike the Paycheck Protection Act that is limited to employers with headcount of less than 500 workers, the Employee Retention Credit is open to ALL employers regardless of size IF the business is fully or partially suspended by government order due to COVID-19. (One caveat: Companies who opt for receiving small business loans are ineligible for the refundable tax credit.)
PIA and its affiliates across the country continue to appeal to the Department of Homeland Security/CISA and state/local governments to ensure print is deemed “essential” and can remain open. However, in the event your business has been shut down by government order due to COVID-19, you are advised to consult your accountant regarding the mitigation potential of utilizing the Employee Retention Credit. For more information, including FAQs and IRS forms, please see the following news release issued by Treasury and the IRS on March 31, 2020.
Updated April 1, 2020 @ 01:15 PM
Yesterday, the US Treasury Department and Small Business Administration issued information regarding what is expected to be one of the most expansive and robust mobilization of banks and lending institutions to deploy $349 billion in small business loans, also known as the Paycheck Protection Program established as part of the CARES Act (aka “Phase III” stimulus legislation). It is important to note that time is of the essence in applying for these loans; if you plan to utilize this assistance program, do not wait.
Start today by:
- Reviewing the top-line overview of the program
- Dig deeper into details here and assess your company’s eligibility and need; and
- Contacting your local financial institution and/or use the government-provided application tool found here.
The Paycheck Protection Program is a massive undertaking and it’s reasonable to assume wait times or glitches will occur; starting the loan application process now is critical. In addition to the small business information above, you may also wish to share with your employees information issued by the IRS on the outlay process for Economic Impact Payments (individual assistance checks).
Updated: March 31, 2020 @ 08:25 AM
The White House Coronavirus Task Force has engaged in private-public partnerships to help fight back against the COVID-19 pandemic. Printing and packaging companies across the country are asking how their companies can contribute to this effort. On March 27, 2020, the Federal Emergency Management Association (FEMA) published an industry advisory outlining how private companies can best match their offers of assistance to the right place, and the right time, and in the right quantity. PIA members interested in assisting the government effort should refer to excerpts of this guidance below. The FEMA industry alert can be viewed here. PIA will continue to interface with Department of Homeland Security and FEMA to monitor developments and provide updates on opportunities for member companies to engage in the response effort.
- To sell medical supplies or equipment to the federal government, please either email specifics to covidsupplies@fema.dhs.gov and/or submit a price quote under the COVID-19 PPE and Medical Supplies Request for Quotation. Full details can be found in the solicitation (Updated Notice ID 70FA2020R00000011). This solicitation requires registration with the System for Award Management (SAM) in order to be considered for award, pursuant to applicable regulations and guidelines. Registration information can be found at here. Registration must be “ACTIVE” at the time of award.
- If you have medical supplies or equipment to donate, please provide details on what you are offering through FEMA’s online medical supplies and equipment form here.
- If you are interested in doing business with FEMA and supporting the response to COVID-19 with your company’s non-medical goods and/or services, please submit your inquiry to the Department of Homeland Security’s Procurement Action Innovative Response (PAIR) team at DHSIndustryLiaison@hq.dhs.gov. Learn more about FEMA’s Industry Liaison Program (ILP) here.
- If you are a private company that wants to produce a product related to COVID-19 response, email nbeoc@max.gov.
- Additional ways to help can be found here.
Updated: March 30, 2020 @ 02:00 PM
CISA/Department of Homeland Security Updates Guidance on “Essential Workforce”; PIA Continues to Seek Improvements
As states and local jurisdictions across the country respond to the COVID-19 pandemic by rolling out “Stay at Home” orders closing all non-essential businesses, the question over what defines an essential product, service, and workplace has been spotlighted. The goal is to strike an appropriate balance between keeping critical infrastructure operational while at the same time ensuring public health and safety.
Legally, the final answer to this question is ultimately determined by each Governor, Mayor, and local jurisdictional governing body; this action is the epitome of Federalism and the 10th Amendment granting police powers to the states. There is no national mandated standard definition of an “essential workforce.” However, in order to provide a recommended model definition, the Cybersecurity and Infrastructure Security Agency (CISA, which is under the Department of Homeland Security) has issued advisory guidance on identifying critical infrastructure sectors and suggested definitions of essential workers. While the guidance is non-binding, CISA is encouraging states and localities to incorporate it by reference into their individual shelter in place orders – thus avoiding the confusion of a patchwork of hundreds of differing definitions.
The over 700,000 workers in print and packaging companies are working tirelessly to support our country’s critical goods and services in response to the COVID-19 pandemic. Printed products touch and support all 16 sectors identified as “critical” by CISA in some way and are especially relevant in times of national emergencies or crisis, such as the current pandemic. Currently, many PIA member companies are facing confusion (at best) or work stoppages (at worst) as individual states and jurisdictions continue to issue a patchwork of shelter-in-place orders. In several cases, print has been excluded from state orders and the industry has had to petition Governors to amend the original order. While the petitions have been successful (i.e., PA, MN) the process has created havoc. Similarly, the industry is facing cases of localities and states differing in their definitions of print as essential (i.e., the industry has achieved a waiver to continue operating in Atlanta, but not in the State of Georgia).
PIA has been actively engaged with CISA and the Department of Homeland Security over the past week to seek additions and clarifications to the original guidance published on March 18. On March 23 and March 28, CISA released updated guidance that can be interpreted to include segments of the print and packaging industry. PIA continues to seek improvements to this guidance.
Given President Trump’s announcement extending national social distancing recommendations through April 30th, it’s reasonable to expect that more states and jurisdictions will enact shelter in place orders and increase enforcement efforts, making clear CISA guidance even more vital. Additional clarification to avoid negative consequences and to keep print production alive in the support of multiple critical infrastructure sectors is needed.
The full guidance document and CISA resources can be found here. PIA continues to collaborate with CISA to provide industry feedback on the guidance and to request clarifications and additions.
Updated: March 27, 2020 @ 05:15 PM
CARES Act Passed by Congress; on to President for Signature
Today, the US House of Representatives passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) by voice vote. This follows Senate passage of the CARES Act on March 25 by a vote of 96-0. Of the four Senators not voting, two were facing Coronavirus diagnoses and two were under self-quarantine. The bill will be signed by President Trump as soon as possible so that the new law may be enacted immediately. The $2-trillion-plus CARES Act is the largest ever economic relief/stimulus legislation. It is considered “Phase III” in Congress’ legislative response to the COVID-19 pandemic. The massive bill clocked in at over 800 pages. A section-by-section summary of the full bill is available here. There is a lot to unpack in this historic legislation, and PIA will continue to provide additional updates as compliance and guidance details emerge. Today, we will be providing summaries of provisions key to printing and graphic communications industry in this breaking news update.
CARES Act: Small Business Relief Provisions
Small business economic relief is a key part of the CARES Act. The centerpiece of small business assistance (eligible for employers with 500 or fewer employees) is the Paycheck Protection Program, which seeks to provide 8 weeks of cash-flow assistance through 100 federally guaranteed loans to small employers who maintain their payroll during this national emergency. The program would provide equal in to 250 percent of an employer’s payroll up to $10 million and could be used to cover payroll costs including salary, wages, and payment of cash tips; employee group health care benefits including insurance premiums; retirement contributions; and covered worker leave. If the employer maintains its payroll, then the portion of the loan used for the outlined purpose would be forgiven. For more details on the Paycheck Protection Program, see a one-page summary published by the US Senate Committee on Small Business here; a more detailed section-by-section summary of the small business relief section is available here.
CARES Act: Business Tax and Unemployment Provisions
The CARES Act addresses both unemployment and business tax policy. For example, the Act would allow the deferment of the employer portion of certain payroll taxes through the end of 2020. Note: Deferral is not provided to employers that avail themselves of the SBA loans designated for payroll protection. A modification on the treatment of net operating losses, the Alternative Minimum Tax, and other provisions are also included. Please see a summary of the tax and unemployment insurance section of the CARES Act here.
CARES Act: Individual Economic Assistance
The CARES Act also provides direct cash assistance known as “recovery checks” for all US residents with adjusted gross incomes under $75,000 ($112,500 for head of household and $150,000 married couples), plus an additional $500 per child. Recovery checks will be sent directly from the federal government to taxpayers. As a resource for PIA member companies that is suitable for sharing with employees, please find a FAQs published by the US Senate Finance Committee relating to this provision here.
USPS Emergency Assistance
The United States Postal Service is a critical delivery channel for a vast amount and array of printed and packaged products manufactured by PIA member companies. It is an essential government service in times of crisis, and PIA lobbied Congress to provide a direct cash appropriation, similar to what has been provided to other private sector industries such as airlines, to USPS as an independent agency within the federal government. While a bipartisan group of lawmakers put aside ideological differences to include a direct cash infusion in the legislation, the Trump Administration refused to grant the funds to USPS and instead revised the assistance to be in the form of a new line of credit ($10 billion).
This is a short-term victory as it throws a lifeline to USPS, which is reporting an 18-percent drop in entered mail this week as compared to the same week last year. However, simply extending more credit is not the best solution to what could be an impact to USPS greater than that of lost volume and revenue post-9/11 or post-2008 financial crisis. PIA is redoubling efforts to achieve more structural changes and financial stabilization such as full repeal of the onerous pre-funding of retiree health benefits requirement in the next phase of Congressional response to COVID-19.
PIA would like to give a special thank you to our industry’s Congressional champions on this issue: House Oversight Chair Rep. Carolyn Maloney (D-NY), Congressman Gerry Connolly (D-VA), Senate Homeland Security Chair Sen. Ron Johnson (R-WI), Ranking Member Sen. Gary Peters (D-MI), and Senator Tom Carper (D-DE).
Next Steps: White House, Implementation of New Law/Loans
President Trump is expected to sign the CARES Act immediately upon receipt. Then, implementation will begin. It’s important to note that individual agencies implementing the new law such as the Department of Treasury and Small Business Administration will issue guidance on how to utilize the programs and how to apply the new law to your business. There is generally a lag time between the President’s signature and the issuing of compliance or guidance, although the agencies are moving fast in response to the urgency of the pandemic and its consequences. On March 26, Treasury Secretary Mnuchin stated that he expected a lag time of about one week before loans via the Paycheck Protection Act would be available to small businesses. He also stated Treasury was easing regulations to allow the SBA loans to be available same-day, as well as expanding the list of lenders beyond the SBA to banks, credit unions and other financial institutions to provide greater access across the country.
Future Congressional Action on COVID-19 Response
Congress is expected to draft a Phase IV and possibly a Phase V legislative response that will focus on additional economic recovery. PIA will continue to press for provisions to mitigate the negative economic consequences of this pandemic to our industry.
What Can Printers Do?
Government response to the pandemic is changing day to day. The economic impact is mounting. It’s important that Congress hears from printers that the industry is taking a hit – but also working to manufacture essential printed material: financial, insurance and health care documents, mailed advertisements to support struggling retailers and restaurants that are adapting to curbside and delivery models, as well as critical government information regarding public safety, elections and more. Take a moment to email your lawmakers to let them know your company’s specific concerns and needs as well as what you are doing to keep commerce alive during this challenging time.
Updated: March 18, 2020
Families First Coronavirus Response Act
Yesterday, the Senate passed and the President signed HR 6201, the Families First Coronavirus Response Act, by a vote of 90-8. The bill is referred to as “Phase II” of the legislative response and follows an initial supplemental emergency appropriations bill addressing critical public health concerns (i.e., COVID-19 testing) last week. The law includes employer-related leave provisions including: Emergency FMLA, Emergency Paid Sick Leave, and refundable tax credits for employers required to provide such leave. Please see a fact sheet by Littler law firm here.
While some improvements were made to the initial House-passed HR 6201 such as exempting employers with fewer than 50 employees from providing required leave if it would jeopardize the viability of their businesses and protection from civil FMLA damages in employee-initiated lawsuits, the Senate, unfortunately, did not answer PIA’s call (along with over 100 other trade associations) to replace mandates with a federal emergency fund providing more direct financial assistance to employers. PIA will continue to lobby for measures that deliver the most immediate impact to alleviate liquidity concerns.
Phase III (and likely IV) Economic Stimulus
Even before Phase II was passed, Congress was composing Phase III, which will include direct assistance to individuals and families, roughly $250 billion in direct loans for small businesses in order to spur access to capital, and targeted relief for key industries—namely about $50 billion for airlines. This bill is fast-tracked in the Senate, but the process will require serious input from senior lawmakers which is likely to extend its consideration into next week. Specifics of the provisions are still coming together, and PIA is closely monitoring developments. Because the list of affected industries is growing beyond airlines, restaurants and hospitality companies, there is almost certain to be a Phase IV stimulus to address other impacted sectors. The timing of Phase IV legislation would likely be April–May with the drafting of the bill anticipated to take place almost immediately after passage of Phase III.
Postal Reform & USPS Relief
A multitude of industries are seeking to attach legislative priorities to these economic stimulus bills. One pitch PIA along with the postal union allies is strongly making to Congressional leadership is relief for USPS as it operates as an essential service/business during this national emergency. Clearly, USPS is critical as pharmaceutical prescriptions (pre-virus), government assistance checks, and printed COVID-19 packets sent by the government to all addresses must be delivered.
Package delivery demand is also increasing due to social distancing recommendations. Supplemental emergency appropriations to keep USPS functioning are needed. PIA supports this. We are also lobbying for inclusion of the following in Phase III or Phase IV which would require the Postal Regulatory Commission (PRC) to scrap its pending rate proposals and recalculate such based on influx of government funds, and attaching the House-passed/Senate-pending “USPS Fairness Act” that would repeal pre-pay requirements of retiree health benefits. It is vital, not only for the country but for our industry, that the USPS remains a strong, functioning delivery channel in this time of crisis and in a hopeful time of recovery.
Trump Administration Action
The Administration continues to take executive action to address all aspects of COVID-19. Agencies such as Department of Labor, Department of Treasury, Small Business Administration, OSHA and EPA are updating their websites with new guidance for employers related to Administration announcements. PIA’s COVID-19 webpage provides links to these resources. One key piece of guidance for companies regarding tax payment deadlines was made yesterday: corporate taxpayers will be given a deferral of up to $10 million of federal income tax payments that would be due on April 15, 2020 until July 15, 2020, without penalties or interest. (The deferral is for individual and non-corporate taxpayers, too; the April 15 filing deadline remains in place.)
Lisbeth Lyons is Vice President, Government & Political Affairs, PRINTING United Alliance, the largest, most comprehensive graphic arts trade association in the country. With more than 20 years of experience representing the voice of business on Capitol Hill, Lisbeth advocates for public policies that protect and advance the economic future of the printing and packaging industry. She oversees PRINTING United Alliance’s legislative, political, and grassroots advocacy initiatives, and has served in executive leadership of multiple successful advocacy campaigns, such as Coalition for Paper Options, Coalition for a 21st Century Postal Service, and Stop Tariffs on Printers & Publishers Coalition.
Prior to representing PRINTING United Alliance, Lisbeth served in similar roles at Printing Industries of America, US Telecom, and the National Federation of Independent Business. She also spent three years as a K-12 teacher in the Chicago Public Schools system, where she was on the forefront of urban education reform in the mid-1990s.
Lisbeth is Midwestern born and bred, having grown up in the St. Louis metropolitan area and attended college at DePauw University in Greencastle, Indiana, before starting her career in Washington, DC. She holds a B.A. in English/Sociology and a professional graduate certificate from The George Washington University School of Political Management. She lives in the historic Logan Circle neighborhood of Washington, DC.
An avid leader and learner in professional development, Lisbeth was a founding member of the Government Relations Leadership Forum, and is an active participant in organizations such as Council of Manufacturing Associations, Women in Government Relations, and National Association of Business PACs, among others. Lisbeth is often a featured speaker at premier industry conferences; she has spoken to Boards of Directors, corporate executive management teams, and state and regional trade associations across the country from coast to coast.