Eight weeks is not going to be enough help for a lot of small businesses: Senator Cardin

Maryland Senator Ben Cardin is pushing to increase additional transparency of the Federal governments small business relief loans. He joins Yahoo Finance’s On The Move to assess the state of PPP.

Video Transcript

- Thank you.

- Well, let's turn to more on the government response. Constance was just talking about QE and the role of the Fed. Of course, the federal government has been very active on the fiscal policy front, as well, with the stimulus that they've added, both through PPP and direct stimulus to individuals, as well. We are joined now by Senator Ben Cardin, who is Democrat of Maryland. Senator, it's always good to talk to you, especially for this girl who grew up in Baltimore County.

I want to start with the Paycheck Protection Program, because the Wall Street Journal reporting this morning that 40% of the money in the most recent allocation does remain available, for a number of different reasons, in part because people had duplicate applications, in part because a lot of small businesses are saying, with the requirements put on PPP, they don't necessarily want the money because they don't know if they're going to be able to rehire people by June 30th, for example. What do you think still needs to be done in terms of fixing PPP? And Senator, if you could just push star 6 on your phone, that will unmute your audio so that we can hear you.

I'll give the senator a second to do that. Hopefully-- are you there, Senator?

BEN CARDIN: I'm with-- I'm with you. I think I'm with you.

- You are with us. Thank you so much.

BEN CARDIN: Great. Let me first say, one of the first things we've asked for is to get the data from the Small Business Administration and Treasury so that we understand exactly how this money has been distributed. We also are making it clear to small businesses that, if their certifications were not accurate, that they were not entitled to these funds, because there had to be a need for liquidity, that they should return these funds. So I think that is also contributing towards the slower number of applications. And then lastly, we're seeing that the applications are with smaller companies. They're the ones that had a more difficult time finding a financial institution to raise a 7A loan during the first round of funding.

So I think all of that has contributed to a little slower pace on the PPP program. But it's still very, very popular, and there's still a lot of businesses that are in the queue to try to get that type of relief. So we're going to be watching this very closely. We know that eight weeks is not going to be enough help for a lot of small businesses. We also know that the eight-week restriction needs to be looked at, that it's a tough period of time to get all of your spending in, considering that your businesses are not reopened. So we are looking at those issues to see how this program could work more effectively, particularly for those small business that are in the greatest need.

ADAM SHAPIRO: Senator, it's Adam Shapiro. Thank you for joining us. There was a story this morning that 40% of the second round of funding, $310 billion, is still accessible. Does that mean we're not going to need yet another injection of funds to help small businesses, or is there something else at play?

BEN CARDIN: Well, that's an excellent question, and one that we're trying to answer in the United States Senate. That's why there has been a bipartisan request for additional information as to how much additional funds are going to be needed. We don't have that answer today. We do think, though, there will come a period of time when there will be no further funds available if we do not replenish. So we do expect there is going to be need for the United States Congress to take a look at additional resources to help small businesses.

And as Sibile said earlier, we also recognize that there is going to be additional help needed beyond just what we did in PPP. We do remind small businesses that there is the Economic Injury Disaster Loan and Grant program that also we replenished. And we do know that they're going to need help on working capital and inventory. So we are looking at what comes next.

RICK NEWMAN: Senator, hi. Rick Newman here. Could you discuss the liability shield that senators are talking about putting in the next bill? Businesses say they need some confidence that they're not going to get sued into oblivion if they reopen, but obviously there need to be protections for workers and customers. So what do you-- what do you see the outcome being there?

BEN CARDIN: Well, the liability issue is primarily handled by state governments, not by the national Congress. So it'll be interesting to see how we deal with the request that's been made by Leader McConnell, who's really transmitted it to the United States Senate. We know that there are different laws in different states, so it's going to be challenging for us to come up with a national issue here. So we have taken steps in the past in regards to issues such as terrorism and flood risk factors, but I must tell you, I think we're all going to be a little bit cautious as to how we deal with this issue.

- Senator, we spoke to Neil Barofsky last week, who, of course, was the overseer of the TARP program during the financial crisis. And he, like you, is concerned about the transparency of the various programs right now, including PPP, where we don't necessarily get the full scope of data, who's borrowing this money from the government. He, though, was confident that we will find out, that we will see that transparency happen. What about you? I know this is something that you have been pushing for.

BEN CARDIN: Yeah, I also believe we'll get that information. The legislation that I filed with Senator Schumer and Senator Shaheen would require that type of transparency. I expect that's going to be considered in the next legislation to pass the Congress. We also hope that it can be done voluntarily. We had conversations with Secretary Mnuchin and Administrator Carranza this week about getting that information out. I think Secretary Mnuchin agrees with us, he wants to see transparency. So we have to make that information available, and there has to be accountability. For those that have accepted these funds or applied for these funds, if they did not comply with the law, if they didn't operate in good faith, then there needs to be accountability.

RICK NEWMAN: Senator, Rick Newman again. Question about coronavirus testing. Congress has appropriated 25 billion for this. It's going to states and cities and health systems. But some public health experts say there needs to be a lot more, and there needs to be a federal program along these lines. Do you see Congress, first of all, putting more money into testing and contact tracing, and also directing the Trump administration to actually set up a federal program to oversee this?

BEN CARDIN: If it was money alone that would solve this problem, that would've been solved by now. This is a supply chain issue. It's the failure of the administration to use the tools that they had under the Defense Production Act to make sure that we had the domestic production of necessary ingredients that go into testing, and that we had adequate supplies of protective equipment. This-- COVID-19 has been with us for some time. And to this date, we still do not have adequate amount of supplies here in the United States to deal with testing and protective equipment.

So I do expect Congress will continue to act on this issue. If there is additional resources that are needed, we'll make that available. But I really don't believe it's resources. I really do believe it's supply chain issues. And we are, to this date, very short on what we need in order to safely reopen our communities.

- Speaking of which, Senator, the governor of your state, Larry Hogan, has gotten pretty creative when it comes to supply chains, including placing an order directly with South Korea for protective equipment. When it comes to reopening Maryland and how he has addressed this crisis, do you think that Maryland's on the right path? Do you think that it is time to reopen? And what is this sort of patchwork of reopening around the country going to mean?

BEN CARDIN: Well, Governor Hogan has been creative, and he's been able to over double our capacity for testing as a result of reaching out to a supplier in South Korea. But even with doubling our capacity, what he has done, we still have a real dramatic shortage in our testing capacity to safely reopen our communities.

So Maryland, like every state in the nation, has inadequate amount of supplies. This week, we've asked the federal government to open up its federal labs in our state to help in that capacity. That's another way that we can get the capacity we need. It's not just having all the reagents and the swabs and the kits, you also need to have the lab capacity, the personnel that can do all this, and it has to be reliable and it has to be timely. And that requires a real strategy.

And you mentioned the 25 billion we just provided, but that was to develop mainly a national strategy on testing so that we know the protocols, we know what facilities are going to be needed, where they're going to be needed. To date, we don't have that. So in Maryland, we are doing our own estimates as to what we need, and we are very short on what we need to safely reopen. And we're going to continue to work to try to get that in our state, but we should have that for our country.

ADAM SHAPIRO: Senator, in the last couple of days, we've learned that one person close to the president, another close to the vice president have tested positive for COVID-19. I'm curious, what is it like right now on Capitol Hill? Do you wear a mask? Does your staff wear a mask? And are you really working with one another, Republicans and Democrats? Is there real bipartisan togetherness, or is it the same old infighting?

BEN CARDIN: Well, you know, clearly we passed three major bills-- actually four major bills-- pretty quickly on very strong bipartisan votes. The CARES Act passed 96 to 0 on the floor of the United States Senate, so it was a strong bipartisan effort. We talked about the small business provisions. That was created and passed by very, very strong bipartisan cooperation. Senator Rubio and I worked with Senator Collins and Senator Shaheen, and we very much kept politics out of this, did what we needed to do. So I think you are finding that the members of the Senate and House recognize that this is a national emergency and we have to put partisan politics aside for our country. And we're continuing to do that.

It was somewhat surreal on Capitol Hill this week. We were back in the Senate. But we did very little in regards to dealing with COVID-19. I am proud that the Small Business Committee did hold a briefing with Secretary Mnuchin and Administrator Carranza. That was done by teleconference, which we could have done from our home districts, our home states, but we did it from Capitol Hill.

[INTERPOSING VOICES]

ADAM SHAPIRO: With the staff, does everyone on Capitol Hill wear a mask?

BEN CARDIN: I can tell you that, first of all, my staff is not there. I have one or two staff people that are in my office. They do wear masks. I wear a mask. My colleagues are wearing masks. We had one markup in the Environment and Public Works Committee. We were all wearing masks. So, yes. I admit there are some exceptions, but generally, I was on the floor of the Senate, I wore my mask until I spoke on the floor, and then I took the mask off just for purposes of my speech, and no one else was around me.

So yes, we wear masks, and we are practicing the right hygiene on using sanitizer, just washing our hands, keeping our distance, staying six feet away from our nearest person. We are not gathering together. I understand the Republicans are still meeting for lunch, but they're using social distancing when they meet for lunch. The Democrats are not meeting together. We use, instead, teleconferencing for our meetings.

- Like all of us. Senator Cardin, we wish you continued health and safety there as you do your work in Washington. Thank you so much for joining us, Senator Ben Cardin of Maryland. Appreciate your time, sir.

BEN CARDIN: Thank you. Stay safe, everybody.