The Senate yesterday passed legislation extending and expanding the Paycheck Protection Program (PPP), a key component of the federal government’s response to the economic fallout of the COVID-19 crisis. The action follows the House’s passage of the bill last month, and the bill is headed to the President’s desk for signature.
“We applaud these further steps taken by Congress on legislation so vital to all Americans, including the Jewish community,” said Rabbi Abba Cohen, Vice President for Government Affairs and Washington Director of Agudath Israel of America. “We have advocated aggressively for expansion of, and refinements to, the PPP in order to better address new and continuing challenges facing individuals, businesses and nonprofits during these difficult times.”
The Senate bill passed by unanimous consent on Wednesday will provide greater flexibility in the program that will be of particular assistance to small entities. Its focus includes two main features:
First, under the new legislation, eligible entities are given 24 weeks to spend PPP funds. The original bill allowed spending for only eight weeks.
Second, the new bill establishes a 60-40 divide — allowing businesses and organizations to spend only 60 percent of the loan on payroll and 40 percent on other fixed costs such as rent and utilities. This is a change from the earlier bill which called for a 75-25 ratio.
Other changes include: extending eligibility for the program to December 31, 2020; extending the date that nonprofits and businesses have to rehire employees, and qualify for purposes of loan forgiveness, to December 31, 2020; extending the period for paying back portions of the loans that are not forgiven from 2 years to at least 5 years; and, ensuring that successful PPP applicants would now be eligible to defer 2020 payroll taxes, something that was prohibited under the original legislation.
These targeted changes are intended to relieve the pressure small businesses and nonprofit organizations were facing because of time constraints and changing priorities. They are the result of continuing negotiations between the Trump Administration and Congress and of bipartisan agreement on Capitol Hill.
“The continued refinements to PPP will greatly assist recipients — including our shuls, schools and charitable institutions — that have been hit hard by the severe economic downturn. We welcome them and will remain committed to working with the Administration and Capitol Hill in moving these efforts forward.”