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A new, improved PPP coronavirus loan program is in the works

The Paycheck Protection Program stood out as an early success of the government’s pandemic relief effort, but it ended with a whimper and left billions of dollars unallocated when small businesses got spooked by the ever-changing rules.

Even as Democrats and Republicans fight over other aspects of another major stimulus bill, they have largely agreed on how to revamp the PPP to restore its popularity and usefulness.

But groups representing the smallest business owners — independent contractors, the self-employed and minority-owned businesses who complained they were largely shut out of the earlier rounds of funding and for whom these changes are meant to help — are already questioning whether it will be enough.

For starters, they note that both the old and the proposed new PPP are run by the Small Business Administration, which works with businesses with as many as 500 workers, has less experience with companies with fewer than 100, and almost none with those with one or a handful of employees.

The bulk of America’s small businesses have fewer than 20 employees, but they didn’t get the bulk of the earlier PPP money and aren’t sure they’ll do better under a revised program still run by the SBA, advocates say.

“The vast majority of business owners who need and want to be able to access PPP are not the typical SBA small-business borrowers,” said Katie Vlietstra, vice president for the National Assn. for the Self-Employed.

For small businesses that already received one of the forgivable PPP loans, there is some good news about a possible PPP relaunch: They may be able to get a second loan, something not permitted in the original rules. That could be a lifeline for businesses that burned through the initial 24 weeks of payroll support.

“The expectation, I think, when all this was done months ago was that we’d be out of this crisis by now,” said Alfredo Ortiz, president of Job Creators Network, a small-business advocacy group. “These small-business owners are just running out of cash.”

In total, more than 5.1 million businesses got PPP funds before lending ended Aug. 8. The government says 51 million jobs were saved. S&P Global estimates it is closer to 13.6 million.

When the program began, $349 billion flowed out the door in less than two weeks. But the early successes were soon replaced by outrage and confusion. The public was frustrated to hear of large publicly traded companies like Potbelly or Shake Shack receiving loans.

Commercial banks tasked with distributing the money gave priority to their existing customers, leaving small businesses without a strong banking relationship scrambling to compile the needed application paperwork as the money flowed to larger businesses.

Meanwhile, rules governing how the money could be spent changed weekly, at times daily, casting doubt on what terms businesses would have to meet to have the loans forgiven. Demand plummeted. Even an extension of the program in June wasn’t enough to renew interest. While more small loans were processed in the second round than in the first, more than $126 billion was left on the table when the program ended.

“The people who haven’t applied are either disaffected, they don’t think they’ll get it, or they think if they get it they’ll be on the hook for it. And I think a lot of them have probably let go of their employees,” said Cathie Mahon, president of Inclusiv, a national organization representing lenders in low-income communities.

She said the revamp must provide clarity for businesses on exactly what they need to do to ensure the loan is forgiven before they begin taking loans, she said.

“You just can’t make decisions on maybe, maybe not,” Mahon said.

Republicans and Democrats agree the program should focus on smaller businesses, and very small and minority-owned businesses should be prioritized.

“I think we’ve got a pretty good package, and I’ve worked hard on it with Sen. [Benjamin L.] Cardin” (D-Md.), said Senate Small Business and Entrepreneurship Committee Chairman Marco Rubio (R-Fla.). “I’m not saying he’s signed off to our package, but it reflects a lot of our joint priorities and we’re pretty close.”

Republicans want to target businesses with fewer than 300 employees that have seen sales decline by 35% or more, and to set aside $10 billion for community and rural banks to lend. Democrats want to focus on those with fewer than 100 employees that have seen sales decline by 50% or more. Both want to set aside up to $25 billion for businesses with fewer than 10 employees.

Republicans want to set up a new long-term government-backed loan program through private banks. Democrats say the existing Economic Injury Disaster Loan program, which is a loan directly from the government to small businesses, could be modified to do that. Republicans say 60% of new loans should be spent on payroll. Democrats don’t specify in their bill. Both want to make it simpler to apply and to get the loans forgiven.

“I don’t think we need a lot of time to resolve our differences, and our staffs are working very closely together,” said Cardin, the highest ranking Democrat on the committee.

After failing to get loans under the previous PPP rules, some small businesses, especially those with fewer than 10 employees, may need to be convinced that they’ll have a shot at the money if they apply, Ortiz said.

“I think there needs to be some marketing that takes place on this,” Ortiz said. “People have a little hesitancy right now that needs to be overcome.”

For the nation’s smallest businesses — many of which are Black-owned and have no employees — even the changes Congress is proposing may not be enough, said Ron Busby Sr., president of U.S. Black Chambers.

An estimated 41% of Black-owned businesses have permanently closed since the pandemic began, he said. But Congress has an opportunity to learn from the mistakes in the first round that left them out. He recommends offering grants, not forgivable loans, and having the money distributed through lenders focusing on low-income communities, Black-owned banks and credit unions.

“There needs to be tighter control of who gets the funds and how the funds are going to be used,” Busby said. “[Local lenders] know how to get to the businesses that need the funds.”

Self-Help Federal Credit Union in Oakland used its existing relationships with community-oriented economic development groups to help businesses that haven’t gotten a loan before and needed a bit more help to fill out their PPP applications over the summer, said Purvi Patel, special projects manager.

“Some of this stuff feels overwhelming, especially for a small nonprofit in the Central Valley with three or four employees or an arts nonprofit in L.A.,” Patel said.

Jase Rex, 51, chief executive of Hot Section Technologies, a federally certified aircraft repair station, worked with an economic development group and his local bank to get a $180,000 loan in early May that allowed him to keep paying his 18 employees.

But he said he wouldn’t qualify for a second loan if he must show a drop of 50% in sales.

“We’re experiencing a slow descent,” he said.

For Carlos Ortez, 58, owner of Un Solo Sol in Los Angeles, PPP’s requirement that 60% of the loan be used for payroll fails to consider the other bills that have to be paid to keep his restaurant open. For him, bills such as insurance and utilities may be as much as payroll, and while he’s grateful that the $23,700 loan he received in June allowed him to pay two of his four employees, he’d like to see more flexibility.

“If we don’t pay the bills, eventually we will be kicked out,” Ortez said.

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Supreme Court rejects Trump’s termination of DACA program

In a striking rebuke to President Trump, the Supreme Court on Thursday rejected his plan to repeal the popular Obama-era order that protected so-called Dreamers, the approximately 700,000 young immigrants who were brought to this country illegally as children.

Led by Chief Justice John G. Roberts Jr., the court called the decision to cancel the program known as Deferred Action for Childhood Arrivals, or DACA, arbitrary and not justified. The program allows these young people to register with the government and, if they have a clean criminal record, to obtain a work permit and be assured they will not be deported. At least 27,000 DACA participants are employed as healthcare workers.

Trump had been confident that the high court, with its majority of Republican appointees, would rule in his favor and say the chief executive had the power to “unwind” the policy.

But the chief justice joined with the four liberals on the court to rule that Trump and his administration had failed to give an explanation for why it was repealing a popular and widely lauded program.

The justices did not conclude that Trump’s repeal violated the Constitution or exceeded his authority under immigration law. Instead, the majority blocked the action on the grounds that Trump’s team had failed to explain its rationale as required by the Administrative Procedure Act. Adopted in the 1940s in response to the New Deal and the massive growth of government, the act requires officials to explain and justify abrupt changes in regulatory rules.

The decision made for an unusually bad week for Trump and conservatives.

On Monday, the court rejected the Trump administration’s position that a 1964 civil rights law should not protect LGBTQ workers from discrimination, and separately it sided with California in a legal battle over so-called sanctuary laws protecting immigrants. The justices also turned down a series of appeals urging the court to expand gun rights.

Until this week, conservatives had been confident that they had a lock on the high court with Trump’s two court appointees — Justices Neil M. Gorsuch and Brett M. Kavanaugh. But Gorsuch wrote Monday’s 6-3 opinion upholding civil rights for LGBTQ employees. And Roberts, a George W. Bush appointee, has now joined the liberals to knock down one of Trump’s signature immigration initiatives.

“Do you get the impression that the Supreme Court doesn’t like me?” Trump tweeted Thursday.

Trump dismissed the ruling as “highly political” and “seemingly not based on the law,” and used it as an opportunity to campaign for his reelection. “These horrible & politically charged decisions coming out of the Supreme Court are shotgun blasts into the face of people that are proud to call themselves Republicans or Conservatives.”

He said it underscored the need to appoint more conservatives to the Supreme Court and repeated his promise to only appoint future justices from a list of candidates hand-picked and vetted by conservative groups.

The fight over DACA already promised to play big in the 2020 election, with presumed Democratic presidential nominee Joe Biden’s campaign emphasizing his commitment to providing a pathway to citizenship for Dreamers as it seeks to mobilize Latino voters in key battleground states such as Arizona.

“The Supreme Court’s ruling today is a victory made possible by the courage and resilience of hundreds of thousands of DACA recipients who bravely stood up and refused to be ignored,” Biden said in a statement. “As president, I will immediately work to make it permanent by sending a bill to Congress on day one of my administration.”

Democratic leaders said Thursday that they believe the court’s decision — and Trump’s reaction to it — will motivate Latino voters even more.

“If Donald Trump wins in November, he will end DACA,” said Democratic National Committee Chairman Tom Perez, in a call with reporters. “For every voter who cares about Dreamers, please understand this: The future of Dreamers depends 100% on the outcome of the November election …. We can’t lift our foot off the gas, and we won’t.”

The DACA case, whose outcome affects the lives and careers of hundreds of thousands of young people, is the most far-reaching immigration dispute to reach the high court during Trump’s tenure.

The decision, in Department of Homeland Security vs. Regents of the University of California, is similar to last year’s ruling that blocked Trump’s plan to add a citizenship question to the 2020 census.

On Thursday, Roberts spoke for the same 5-4 majority, and his opinion follows similar reasoning. The chief justice said Trump’s Homeland Security Department did not put forth a valid reason for revoking the DACA program, just as he said Trump’s Commerce Department did not provide a valid reason for adding the citizenship question.

“We do not decide whether DACA or its rescission are sound policies,” Roberts wrote. “We address only whether the agency complied with the procedural requirement that it provide a reasoned explanation for its action. Here the agency failed to consider the conspicuous issues of whether to retain forbearance and what, if anything, to do about the hardship to DACA recipients. That dual failure raises doubts about whether the agency appreciated the scope of its discretion or exercised that discretion in a reasonable manner.”

Legal experts said the administration has only itself to blame for the loss. “It’s not that Chief Justice Roberts is a closet progressive. He’s not. It’s that the Trump administration is really bad at administrative law,” Stephen Vladeck, a University of Texas law professor, tweeted.

Usually, the chief justice and the court’s conservatives argue for deferring to the federal government on regulatory matters, particularly in an area like immigration. Two years ago, for example, the chief justice wrote a 5-4 opinion deferring to Trump and upholding his travel ban on foreign visitors and immigrants.

But such deference requires the justices to have confidence in the decision-making process within the government. Thursday’s decision is the latest sign that Roberts, who spent much of January presiding over Trump’s impeachment trial in the Senate, may be growing increasingly skeptical about decisions that come out of the Trump administration.

The court ordered that the DACA case be remanded so that the Homeland Security Department could better explain its actions. Meanwhile, DACA will remain in effect. While the administration could now devise a new explanation, there is little or no chance a second attempt to end DACA would win approval from the courts this year.

Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined in the decision. Justices Clarence Thomas, Samuel A. Alito Jr., Gorsuch and Kavanaugh voted to uphold Trump’s plan.

The decision is likely to prove popular with the American public. Opinion polls over the past year have found that three-fourths of Americans believe the Dreamers should be granted a permanent status and allowed to become citizens. Both Republicans and Democrats have voiced support for them.

The ruling also likely closes the door on any action in Congress this year to resolve the issue. Trump had hoped that, if he won, he would have been able to use the decision as leverage against Democrats by offering to assist the Dreamers in exchange for new restrictions on legal immigration. Democrats had already rejected such a deal. Now they’re likely to wait until next year, when they hope to have increased their numbers in Congress after the November election.

California Atty. Gen. Xavier Becerra celebrated the outcome. “Ending DACA would have been cruel to the hundreds of thousands of Dreamers who call America home, and it would have been bad for our nation’s health. Today we prevailed on behalf of every Dreamer who has worked hard to help build our country — our neighbors, teachers, doctors and first responders.”

President Obama extended relief to these young people in 2012 because he said they had done nothing wrong. They had been brought to this country by their parents as children, had grown up here and started families and careers. It made no sense, he said, for the government to target them for deportation.

Although Trump lauded the Dreamers during his 2016 campaign, his administration took a hard line on immigration from the start and announced in 2017 the DACA program would be ended. It was not clear why the program was being ended, other than that then-Atty. Gen. Jeff Sessions believed it was illegal.

The announcement triggered a long legal battle in the courts that began in California.

University of California President Janet Napolitano, who launched the DACA program when she was Obama’s secretary of Homeland Security, filed a lawsuit against the Trump administration in federal court in San Francisco along with Becerra. They argued that the administration had not put forth a valid reason for terminating the popular program.

U.S. District Judge William Alsup agreed in January 2018 and handed down a nationwide order that put the repeal on hold. The Trump administration had acted based on “a flawed legal premise,” he said, adding that “DACA was and remains a valid legal exercise” by immigration officials.

The administration appealed, but in November 2018, the U.S. 9th Circuit Court upheld the judge’s order in a 3-0 decision. The Supreme Court refused to intervene for a time but last year agreed to hear the government’s appeal, along with parallel cases from New York and Washington, D.C.

Times staff writer Evan Halper in Washington contributed to this report.

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Supreme court blocks Trump from cancelling Daca immigration program – follow live | US news

Trump condemns ‘horrible & politically charged’ Supreme Court rulings

Pelosi orders removal of portraits of speakers who served in Confederacy

There are more than 652,800 people, including doctors fighting the coronavirus, who could be affected by the decision about the program, Deferred Action for Childhood Arrivals (commonly known by its acronym, Daca).

Daca allowed young people who were raised without legal immigration status in the US to get renewable, two-year authorizations to live and work in the country. It did not provide a path to citizenship.

Barack Obama enacted Daca in 2012. The policy landed in the court system after the Trump administration rescinded it in September 2017. Trump has repeatedly said he supports the people Daca shielded from deportation, but for nearly three years their futures have been uncertain as the policy wound through the legal system.

As of September 2019, 652,880 people had Daca, including roughly 27,000 healthcare practitioners and nearly 9,000 teachers. About 80% of the people who have it are from Mexico and nearly half live in California and Texas.

Daca is a popular policy. A month before a November supreme court hearing in the case, 53% of voters said they would oppose a decision by the supreme court to end Daca, in a Marquette University law school poll.



Supreme Court blocks Trump from canceling Daca


Schiff signals openness to calling Bolton to testify


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Joe Biden says coal miners should ‘learn to program’

Democratic presidential candidate Joe Biden’s suggestion that coal miners should “learn to program” as the United States transitions away from fossil fuels shows even more “disdain” for the profession, a representative of West Virginia miners said Wednesday on “Fox & Friends.”

Chris Hamilton, co-chair of the West Virginia Coal Forum, hit back at the former vice president for essentially saying coal miners should learn to code, or focus on preparing for a revamped green economy.

“Anybody who can go down 300-3,000 feet in a mine sure as hell can learn how to program as well,” said Biden at a campaign event Monday in New Hampshire. “But we don’t think of it that way. Anybody who can throw coal into furnace can learn how to program for God’s sake.”


Hamilton said the attitude from Biden and others on the left regarding coal is “inconceivable” but nothing new, given the Obama administration’s moves against the industry.

“It’s just inconceivable how someone, particularly in his position could advocate putting tens of thousands of working Americans out of work. But it comes as no surprise. Former Vice President Biden has repeatedly demonstrated his disdain for mining and for our coal miners,” he responded.


The remark came after Biden said at last month’s Democratic presidential primary debate that he’d sacrifice economic growth due to a boom in oil and natural gas production and potentially risk displacing hundreds of thousands of blue-collar workers in order to combat climate change.

Biden – the front-runner in national polling in the Democratic nomination race – emphasized that “the opportunity for those workers to transition to high-paying jobs … is real.”

“We shouldn’t build another new highway in America that doesn’t have charging stations on it. We have an opportunity to put 550,000 charging stations so that we own the electrical vehicle market, creating millions of jobs for people installing them, as well making sure that we own electric vehicle market,” Biden explained.


But he insisted that “we have to make sure we explain it to those people who are displaced that their skills are going to be needed for the new opportunities.”

Hamilton said Biden has been consistent in the issue since his 2020 campaign launched and will not help him win back any support in West Virginia, where Hillary Clinton was defeated by President Trump in 2016 by more than 40 points.

“Listen, these coal miners absolutely love what they do and they recognize the importance and value. It’s a very honorable profession. Our miners are very highly skilled at what they do. They do it with great pride and sophistication and they’re technologically advanced so, Vice President Biden is correct in that regard,” said Hamilton.

Fox News’ Paul Steinhauser contributed to this report.