Powell Presses Congress for More COVID-19 Relief
The economy won't rebound from reopening efforts alone
Federal Reserve Chairman Jerome Powell warned senators June 16 that the U.S. economy would not recover strictly by reopening businesses shuttered by the COVID-19 pandemic and sending Americans back to the workplace. Testifying before the Senate Banking Committee, Powell said Congress should not let the better-than-expected May jobs report or a recent uptick in consumer spending convince them that further COVID-related stimulus won’t be needed.
“The fact is, we’ve had the largest economic shock in living memory and the economy is going to recover from that, but we just have to be a little patient with it,” Powell said. “I would say there’s a reasonable probability that more will be needed, both from you and the Fed.”
Conservative budget hawks in Congress sent a letter to Senate Majority Leader Mitch McConnell (R-KY) and President Trump this week suggesting that another COVID-19 relief bill would put the country on “a road to financial ruin.” McConnell has been slow-walking discussions on the next coronavirus package to see how the economy fares but negotiations on the next stimulus bill are still expected to begin in earnest after the July 4th recess. The American Society of Association Executives (ASAE) and many other associations are still working to convince Congress to include 501(c)(6) associations in the Paycheck Protection Program (PPP) in the next COVID package.
On Monday, the Federal Reserve announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for 501(c)(3) nonprofit organizations. As with the existing Main Street Lending Program, which targets small and medium-sized businesses, the proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the coronavirus pandemic and could benefit from additional liquidity to manage through this challenging period.
“Nonprofit organizations are critical parts of our economy, employing millions of people, providing essential services to communities, and supporting innovation and the development of a highly skilled workforce,” Powell said. “Nonprofits provide vital services across the country and we are working to help them through this difficult time.”
Loan terms for nonprofits would be the same as for Main Street business loans. The minimum loan size is $250,000 and the maximum is $300 million. Principal payments would be fully deferred for the first two years of the loan and interest payments would be deferred for one year.
Public comments on the Fed’s proposal are due by June 22. ASAE will be submitting comments calling for expansion of the Main Street Loan Program to include 501(c)(6) associations as well as 501(c)(3)s.
This article was provided to OSAE by the Power of A and ASAE's Inroads.