What Businesses Can Expect From the Phase 4 Stimulus Package

Congress is set to begin negotiations on the next round of stimulus. For business owners, new measures could bring more tax relief, renewed access to forgivable loans, and more.

With prior stimulus measures set to expire in the next few weeks and the economy continuing to falter as the pandemic resurges across the country, Congress will meet this week and next to hammer out a new relief measure. 

The House already passed its Phase 4 bill, known as the Heroes Act, in May. The $3.5 trillion coronavirus relief bill would provide assistance to state and local governments, extend enhanced unemployment benefits, and offer additional economic impact payments to taxpayers, among other things. The bill has been up for review since the end of May, though Senate Republicans, who prefer a measure with a far lower price tag, have been loath to consider it. They’re expected to introduce their own version of a relief bill this week that will have to be reviewed and negotiated between the two chambers before theyrecess in early August.

Several economic proposals that will affect small and midsize businesses have been building consensus among lawmakers for weeks, so the final version of the Senate bill could contain elements of all of them.

Here are six things you likely can expect from the Phase 4 bill.

1. The PPP will go on, but in a different form.

The Paycheck Protection Program, the $669 billion forgivable loan program aimed at beleaguered small businesses, will continue, predicts Neil Bradley, the U.S. Chamber of Commerce’s executive vice president and chief policy officer. At the very least, he says, there will be a continuation of the program, which was recently extended through August 8.

It’s also possible the PPP will become more targeted. Testifying at a House Small Business Committee hearing Friday, Treasury Secretary Steven Mnuchin expressed interest in “topping off” the approximately $130 billion in remaining funds and extending the program. But he noted that it would need to be focused on certain industries like hotels and restaurants that can demonstrate actual losses, resulting from the pandemic. “This time we need to do a revenue test,” he said. 

A proposal that has been gaining ground with lawmakers, dubbed the Prioritized Paycheck Protection Program Act, or P4, offers to extend the PPP and open it up to companies that already received PPP loans (excepting for publicly traded companies), as long as they can show financial losses as a result of the pandemic.

There’s been widening support for streamlining the PPP forgiveness process, too. While certain loans are now eligible for the EZ loan forgiveness application, there’s greater interest in easing things further for smaller businesses by automatically forgiving all PPP loans under $150,000 or $250,000. On that note, Mnuchin at Friday’s Small Business Committee meeting confirmed interest in blanket forgiveness. “Yes, that’s something we should consider,” he told lawmakers.

2. Local communities will get a boost.

The next iteration of relief funding likely also will focus on companies in low-income and rural areas, as well as minority-owned businesses, which experienced difficulty accessing the PPP. Bradley notes that the Recharge and Empower Local Innovation and Entrepreneurs Fund (RELIEF) for Main Street Actwould earmark $50 billion for cities, counties, and states to support small business local relief funds. One of the key flaws of the PPP is that it failed to reach the smallest businesses and minority-owned companies that often did not have traditional banking relationships prior to the pandemic. As this program would be run through local institutions–and not banks–the effort is seen as potentially better suited to reach these businesses. While the U.S. Treasury would operate the program, as written in the bipartisan bill introduced in the Senate in mid-May, banks would not be involved.

Funding for block grants, operated by states and local governments, could also get replenished. The Cares Act initially provided $150 billion in federal aid to state and local governments across the country, some of which went toward grant funding for local business. 

3. More tax relief is on the way.

Currently, PPP funds don’t count as taxable income, but an Internal Revenue Service ruling prevented businesses from being able to deduct traditional business expenses paid for by those funds if forgiven. That may change soon. A bill that would allow the deduction with some guardrails, called the Small Business Expense Protection Act, was introduced in the Senate in early May.

The Phase 4 bill also is expected to bolster and expand access the Employee Retention Tax Credit (ERTC), says Bradley. Currently, companies that have tapped the PPP can’t access the ERTC, which was enacted as part of the Cares Act to incentivize businesses hurt by the Covid-19 pandemic to retain employees. As part of a proposal, dubbed the Jumpstarting Our Businesses’ Success Credit (or JOBS Credit) Act, which was introduced in May, the refundable tax credit–now equal to 50 percent of up to $10,000 in qualified quarterly wages–would increase to 80 percent of up to $15,000 in wages each quarter for up to three quarters. Bradley adds that there’s also potential for the ERTC to expand eligible expenses to include a limited amount of fixed costs.

4. Stimulus checks will be back but they may be less generous.

The Heroes Act passed by the House supports another round of stimulus checks that the Cares Act authorized in March for millions of taxpayers: individuals earning under $75,000 would get $1,200, while married couples with less than $150,000 in adjusted gross income would get $2,400. The bill also would provide an additional $1,200 for up to three dependents, regardless of age. 

Senate Republicans are likely to take a more conservative approach to the payments. Last week, White House economic adviser Larry Kudlow said the next round of stimulus checks may be less than $1,200, while Senate Majority Leader Mitch McConnell (R-KY) in early July stated the next round of stimulus checks may be limited to those with incomes of around $40,000.

5. Enhanced unemployment benefits will continue, but get a haircut.

The Cares Act’s enhanced unemployment insurance, which offered an additional $600 per week on top of existing state benefits, is set to expire at the end of July. Many employers found the measure complicated the task of rehiring employees, who were suddenly earning more on unemployment than at their former jobs.

To avoid that issue–but also ensure laid off or furloughed workers have support–Bradley says that lawmakers are considering more targeted subsidies that would vary the amount offered on a federal level to better coordinate with what’s available at the state level. So between the variable federal supplement and those provided by each respective state, unemployment benefits would replace 80 to 90 percent of a worker’s former wages, up to a maximum federal benefit of an additional $400 per week.

The enhanced benefits also may come with a hiring bonus. The Paycheck Recovery Act, proposed in mid-May, offers low-wage workers–those earning less than $40,100 annually–a $1,500 rehiring bonus upon returning to work.

6. Businesses will receive greater liability protections.

Senate Majority Leader Mitch McConnell has made no secret of his desire to see greater liability protections for employers. The details of his approach are still unclear, though Bradley says it’s likely that the Phase 4 bill will allow for some form of safe harbor for companies that make good-faith efforts to follow public-health guidelines.

This article was written by Diana Ransom for Inc.com

Fanatics Founder’s Celebrity Challenge Raises $10 Million To Feed America During Coronavirus

Fanatics founder Michael Rubin is recruiting his friends for coronavirus relief efforts, including Magic Johnson, who offers courtside Lakers tickets and a game of H.O.R.S.E. with him.
 
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Michael Rubin has always been a self-starter. He sold vegetable seeds door-to-door around his Lafayette Hill, Pennsylvania, neighborhood before he was 10 years old. He organized kids to shovel snow for cash and then opened a ski-tune-up operation in his parents’ basement at 12. The companies got bigger as the career entrepreneur grew up. Today, he is the majority owner and CEO of Kynetic, which counts e-commerce retailers Fanatics, Rue La La and ShopRunner in its portfolio, and is worth $2.9 billion.

When the coronavirus pandemic hit, Rubin mobilized his companies and his deep Rolodex to help. Fanatics, which makes the official MLB jerseys, stopped production last month on the jerseys and pivoted to making masks and hospital gowns, with plans to donate one million masks and gowns.

This week he launched a campaign to address another of the major issues exacerbated by the global shutdown: food insecurity. The All In Challenge kicked off Tuesday with a Rubin video on Twitter. “Together what we want to do is literally build the largest movement with all the best entertainers, celebrities, athletes, business titans, coming together to make a real impact on this issue,” he says.Today In: SportsMoney

The goal is to encourage celebrities to offer one-of-a-kind experiences and items in an auction and share them on their social media channels in videos. There are 145 offerings available as of Sunday morning. Total donations are at $11.4 million and climbing fast.

Rubin, 47, who is a partner in the Philadelphia 76ers and New Jersey Devils’ ownership group, started the process with tickets, travel and lodging to ten top-tier championship sporting events, including a luxury suite for 20 at the Super Bowl. He threw in a $100,000 Fanatics gift card. The package is worth more than $500,000 but is available to win with a donation as little as $10.

There are dozens of experiences available, with a winner drawn for each from among contributors. They include co-hosting a show with Ellen DeGeneres, who also personally donated $1 million to the cause; a round of golf at Pebble Beach with Justin Timberlake and Bill Murray; and a private performance at your home from Justin Bieber. A walk-on role with Leonardo DiCaprio and Robert DeNiro in Martin Scorsese’s next film, plus lunch with Leo and the cast, has raised the most money so far.

Another set of prizes is being awarded via auction, like golf and dinner for ten with Peyton Manning, Meek Mill’s 2018 Rolls-Royce Phantom, and a private magic show with David Blaine. A handful of these auctions have hit six figures already. The top one involves new Tampa Bay Buccaneers quarterback Tom Brady and includes four tickets to the Bucs’ home opener and either dinner or a workout with the six-time Super Bowl winner. Bidding reached $775,000 Sunday. Brady challenged his wife, Gisele Bundchen, as well as rapper Drake and NFL commissioner Roger Goodell to also go “All In.”

All funds raised will be donated to Meals on Wheels, No Kid Hungry and Americas Food Fund, which directly benefits World Central Kitchen and Feeding America. These charities are targeting food insecurity issues facing kids who usually get meals at now-closed schools, the elderly population cut off from food sources, and the millions of people losing their jobs.

Rubin says he is just getting started and targeting a goal of $100 million for the All In project. As the fundraiser kicked off, Rubin said, “I believe when the world faces a crisis, businesses and sports have an obligation to step up and make a difference.”

This article was written for Forbes by Kurt Badenhausen