The U.S. Treasury needs to be 'less restrictive with the usage of these PPP loans': Rep. Abigail Spanberger

Democratic Virginia Rep. Abigail Spanberger is pressing the U.S. Treasury to push out loans faster for small-business. She joins Yahoo Finance’s On The Move panel to discuss.

Video Transcript

- Welcome to Yahoo Finance. You've been critical. You want the SBA, along with other members of Congress-- Republicans and Democrats-- to, how would you describe it? To lessen up the guidelines for people to get these loans. Where do we stand on that, and then the ability to get more funding for the PPP.

ABIGAIL SPANBERGER: Thank you, Adam. Yes I joined with colleagues-- Democrats and Republicans-- to ask the Small Business Administration and the Department of Treasury to be less restrictive with the usage of these PPP loans. Notably, in my district-- Central Virginia-- I have small business owners who are excited by the prospect of PPP and what it represents for them, how it could be a stabilizing business saving loan option for them. But the rules put in place-- so not the legislation as we passed it with the CARES Act-- but the rules that the SBA put on these dollars are too restrictive.

For example, there is a requirement that 75% of the loan dollars be used for payroll, which, in principle, of course, this is the payment protection plan. We want to ensure that workers are getting paid. But for businesses that have expensive infrastructure-- rent, utilities costs-- and might only employ a few workers, they can't make that ratio. For those who-- particularly in our restaurants or in our hospitality industries, where they are closed down and there are not as many workers working day-to-day, they may not be able to meet that ratio.

The intent of the PPP, the intent of CARES Act overall was that when we are able to open back up our economy from a public health perspective, that we have the nation's small businesses still there able to open their doors. And putting these rules-- again, not what we legislated-- on these loan offers. It really impeded the ability for our small businesses to be able to use them.

- Congresswoman, this is Julie Hyman. What you mentioned is also key. Right? "When these businesses are able to open back up." Because that is still a big question mark. The president weighing in on this again today and tweeting just a little while ago, saying that it is the decision, he says, of the federal government not of governors. Now, as somebody who's in a state that was relatively on the scale of being proactive here, was relatively proactive, how do you respond to that? Whose decision is it? And when should we open back up?

ABIGAIL SPANBERGER: So I think everyone should want this decision to be driven by science and by the public health priorities that we should all have, which is we do not want our hospitals to be overwhelmed by COVID-19 patients. We do not want to open back up our schools, our businesses, before we are in a place where we have sufficient tests on the ground to be able to know where there are hot spots and where there are greater risks. And I would hope that everyone would want that decision to be driven by science.

Notably, Virginia is the only state in the country where our governor also happens to be a medical doctor. And so I have been very pleased with Virginia's response. It's been thoughtful based on science and based on the public health priorities of the people of Virginia. I, of course, want to see our communities and our businesses open up as soon as they possibly can. But that "possibly can" has to be linked to what is best from a public health perspective.

- Congresswoman, Jessica Smith here. I wanted to ask about this kind of stalemate we're seeing here as we hear from Speaker Pelosi and Minority Leader Schumer saying that there needs to be money for hospitals in state and local government if there's also going to be money for the Paycheck Protection program. I mean, what happens if the money for this program runs out? I mean, how do you come to an agreement here?

ABIGAIL SPANBERGER: Well, and I think, Jess, you mentioned it. We are already about 60% through the original $349 billion dollars allocated for the Paycheck Protection Plan. And I am fully supportive of putting additional federal dollars towards this program. The restrictive rules aside that are impeding our small businesses ability to use it, the program was created to save and be a lifeline for our small businesses.

I'm pleased that so many are applying. There have been some challenges for those applying with the lenders. We're working through that. I've been an advocate for our small businesses in that way. And I support funding this program to a greater extent. But just as we are talking about essentially ensuring that our small businesses are able to open their doors when we are able to open our economy, we need to make sure that our hospitals are not closing down and our small localities are not faltering.

And so I do support broader discussions about the necessity of providing support to our hospitals. Particularly, I represent central Virginia, ten counties in total, seven predominantly rural. Our small rural hospitals are suffering. Frankly, our suburban and urban hospitals are also suffering. Localities that have fewer than 500,000 people didn't see the same support under CARES as those that have more than 500,000 people. So there is a lot more that we need to be doing to ensure that our small businesses can open their doors when we are able to open back up our communities, but also that we are protecting the very existence of the hospitals that are so vital to our ability to treat patients and recover. And also, our small towns and our small localities need additional support.

- I'm also curious, I know this may be kind of a difficult question to answer, but lawmakers are supposed to be back in Washington on the 20th-- a week from today. Is that something that you see as feasible at this point?

ABIGAIL SPANBERGER: I think we should be planning to adapt, just as small businesses throughout my district are adapting, large businesses are adapting. We see the Supreme Court is going to be doing a virtual hearing of a case. We need to be adaptive. I think from a public health standpoint, the 20th may or may not be possible.

I hope that we will make a decision based on science and based on setting a good example for the rest of the nation. But this is just another example of why it is that Congress needs to be adaptive. We've been doing conference calls. A number of the Caucasus that I'm a member of have been doing Zoom briefings and videoconferencing. And I think that Congress should be aggressively planning for contingencies in the event that next week a return to normal isn't possible.

- And Congresswoman, it's Julie again. There's something else we might have to do virtually, or at least remotely, and that's voting, right? Axios reported this morning that Michelle Obama is going to throw her weight behind an effort to really push for more absentee ballot voting, voting by mail, what have you-- something that this administration has expressed some resistance to. I know there's some legislation that's been introduced. What's your position on that and how much support do you think that efforts going to have?

ABIGAIL SPANBERGER: So I think the broader discussion needs to be about what our goals are. I believe that in our democracy everyone should have the ability to vote. The fact that we are in a public health crisis, and we may rebound into one by November, there are discussions about the fact that this virus is not going to go away even if we get it under control. And putting millions of Americans into polling places across the country does seem like it poses particular risks.

Therefore, I think it's necessary that we have alternative options. In Virginia, we just voted at the state level into law to have no-reason absentee voting. Previously, we used to have a specific list of pre-approved reasons that one could vote by mail absentee or vote in-person absentee in advance of the election. Being forthright in the fact that there are risks to our elderly, those with health challenges, and frankly, the challenges that exist when you funnel people through-- I remember election day 2016-- there were lines in the gym of our local high school when I went to vote. These present real challenges if we are still in an active pandemic.

So I think we should be forward-leaning in recognizing that vote by mail has always been an alternative for some who use it as a method of absentee voting. In some states, it is the primary method of voting. And it is a reliable, good way for individuals to both protect their health and protect our democracy. Notably, there's been some challenges facing the US Postal Service. They are in dire financial straits, much in part because of prior congressional action requiring them to fully pre-fund their pensions into the future.

No business functions this way. It's no surprise that it's created significant challenges for the postal service. I am fully supportive of changing those, again, restrictive congressional requirements that were put on the postal office more than a decade ago, so that they can manage as we see other businesses manage their funding. But I think that the attacks on the post office cannot be looked at without also recognizing the attacks on the principle of voting by mail. And voting by mail, it is secure, it is something that is done nationwide, and it is a really valid alternative for those who may not be able to vote in person or who might be afraid to do so because of a global health pandemic.

- Representative Abigail Spanberger the representative from Virginia, we appreciate your insight here at Yahoo Finance. All the best to you, Congresswoman.