American Foundry Society – March 2020
Key Recommendations for Congressional Stimulus Package
As Congress negotiates a third stimulus package, the American Foundry Society (AFS) has worked closely with the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce to ensure key provisions are included that could benefit metalcasters.
For the past week, AFS has called on Congress and the Administration to take critical steps to support American manufacturers, and in particular, the metalcasting industry, during the coronavirus pandemic. These include the following recommendations:
Key Provisions for 3rd Stimulus Package Supported by AFS Include:
1. Legislation canceling the payment of all payroll taxes typically paid by employers for the rest of the year.
2. Legislation expanding and streamlining loan programs for small businesses with fewer than 500 employees experiencing revenue loss as a result of the coronavirus.
3. Legislation enabling the creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees experiencing significant revenue loss as a result of the coronavirus.
These three steps, combined with the actions below, will ensure that U.S. foundries, their suppliers and customers of all sizes have increased liquidity and access to necessary financing to help them weather the temporary loss in revenue caused by the Coronavirus.
In the coming weeks, AFS plans to submit additional recommendations to address the challenges confronting American metalcasters as we all seek to successfully navigate this evolving and difficult time.
Please do not hesitate to contact Stephanie Salmon, AFS Washington Representative, at firstname.lastname@example.org, if you have additional recommendations to share with Congressional leadership and the Administration.
Overview of Recommendations
1. Payroll Taxes: Enact legislation cancelling the payment of all payroll taxes typically paid by employers for the remainder of the year starting in March 2020. Each month, employers remit more than $100 billion to the federal government in the form of Social Security, Medicare, and unemployment taxes. Collectively, these taxes add slightly more than 15% to the cost of employing the average employee.
Temporarily cancelling the collection of these taxes will reduce employers’ costs of continuing to pay employees regardless of whether they are working or on sick leave, and will increase liquidity for employers to help them respond to losses in revenue. Further, for employers with fewer than 500 employees, cancellation of the taxes combined with the refundability for paid sick and family leave included as part of the Families First Coronavirus Response Act will provide meaningful additional financial support.
2. Loans for Small Business: Enact legislation expanding and streamlining loan programs for small businesses with fewer than 500 employees experiencing revenue loss as a result of the coronavirus. The Small Business Administration (SBA) disaster loan program for those impacted by the coronavirus should be immediately made available nationwide, eliminating the state-by-state and county-by-county certification process. Additionally, we recommend giving SBA the authority to streamline its disaster loan approval process for amounts below $350,000 in order to provide emergency capital more quickly to small businesses in need. This should include removing the requirement that small businesses demonstrate that they cannot access credit elsewhere before receiving the SBA-disaster loan.
3. Creation of Credit Facilities to Provide Loans & Loan Guarantees for Large Businesses: Enact legislation enabling the creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees experiencing significant revenue loss as a result of the coronavirus. Specifically, legislation should expand the use of the Federal Reserve Discount Window through the liberalization of the restrictions of Section 13-3 of the Federal Reserve Act.
Then the U.S. Treasury, Federal Reserve, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) should work in combination with banks to establish a system of credit facilities, to provide loans and loan guarantees that can be accessed by businesses with more than 500 employees to address disruptions created by the coronavirus emergency. Banking regulators should temporarily suspend and review requirements such as the liquidity coverage ratio and provide flexibility in their supervisory expectations for banks extending credit to businesses. These actions should allow for an orderly ration of a program of loans and loan guarantees.
The Administration should encourage regulators to provide financial institutions with flexibility regarding the credit conditions of small and medium-sized businesses facing short-term challenges, including offering extended grace periods and short-term loans.
The Administration and Congress should take steps to ensure small businesses have working capital during the pandemic. Measures for small-business bridge financing should include:
Waiving the requirement that small businesses prove they cannot access credit elsewhere before receiving SBA-backed financing up to $35,000 for a limited time frame and within responsible credit-score criteria.
Automatic referral by SBA to their lender-match program for other financing options if a small business does not qualify for an SBA loan.
The U.S. Citizenship and Immigration Services (USCIS) should allow employers to use scanned, photocopied, and electronic signatures as acceptable alternatives to original signatures on all USCIS forms.
The Administration should maintain the current waiver to the hours-of-service regulations for commercial motor vehicle drivers delivering goods critical for coronavirus response efforts for the duration of the emergency.
Time is of the essence in adopting these critical steps, which are needed at this challenging point in American history.