Chamber Members:
Welcome to December! The month starts off with a brand-new proposal on Covid relief aid. This comes as the clock ticks on a government shutdown. Also, information is below on a claim of flawed jobless numbers, vaccine predictions, and much more.
*Daily Coronavirus update brought to you by Silver Cross Hospital
Bipartisan, Bicameral Group Unveils $908 Billion Coronavirus Proposal
A bipartisan group of lawmakers unveiled a $908 billion coronavirus relief proposal on Tuesday as leadership faces growing pressure to cut a deal. The measure, rolled out by more than a dozen members from the House and Senate, comes as cases are climbing across the country and Congress is running out of time to clinch a long-stalled fifth relief bill with lawmakers scheduled to leave for the year as soon as next week.
The bill, according to a framework released on Tuesday, would provide another $160 billion for states and cities — a top priority for Democrats — $180 billion for unemployment insurance and $288 billion for more small business assistance through the Paycheck Protection Program.
The unemployment benefits would break down to $300 a week for 18 weeks, retroactive to Dec. 1. That’s half of the $600 per week included under the CARES Act from late March. It also includes billions in assistance for transportation-related industries like airlines, $16 billion for vaccine development and distribution and more money for things like schools, childcare and the Postal Service.
The funds, according to senators, would run through the first quarter of 2021 in an effort to provide states and businesses a bridge to get through what health experts are predicting will be a brutal winter. Though the stock market has hit record highs, the spread of the coronavirus has devastated small businesses and killed more than 268,000 people in the U.S., according to figures compiled by Johns Hopkins University.
In a hat tip to Senate Majority Leader Mitch McConnell (R-Ky.), the proposal would provide a short-term federal protection from coronavirus-related lawsuits until states could come up with their own protections.
The bill’s price tag is about double the $500 billion being pushed for by McConnell and roughly half of the $2.2 trillion viewed by House Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Charles Schumer (N.Y.) as the starting point for negotiations.
The senators in the group have been meeting in-person or virtually every day for weeks, except on Thanksgiving, to try to craft the proposal amid growing frustration about the inability for McConnell, the White House and congressional Democratic leadership to make progress toward a deal.
For the proposal to go anywhere, it would need to get buy-in from leadership in both parties and both chambers. Pelosi and Treasury Secretary Steven Mnuchin are expected to talk about coronavirus relief on Tuesday for the first time since October.
Labor Department Published Flawed Estimates of Weekly Jobless Claims, Watchdog Says
The nation’s system for providing unemployment benefits to jobless workers has consistently produced inaccurate data and lower-than-appropriate payouts to millions of workers amid the Covid-19 pandemic, a government watchdog said Monday.
The Labor Department’s weekly reports on jobless claims have published “flawed estimates of the number of individuals receiving benefits each week throughout the pandemic,” the Government Accountability Office said in a periodic report, warning that the inaccuracies could hinder policy makers’ ability to effectively respond to the economic fallout. The report said the weekly data had included overestimates and underestimates at various times, but GAO officials said they didn’t know the full extent of the errors.
In addition, a program created by Congress to provide jobless benefits to workers who are normally not eligible for them has underpaid recipients in most states. As a result, the average weekly payout under what is called the Pandemic Unemployment Assistance program—which is available to gig-economy workers and the self-employed—is below the poverty line in 70% of states that reported data.
“The majority of states have been paying PUA claimants the minimum allowable benefit instead of the amount they are eligible for based on prior earnings,” the GAO said. While states are obligated to pay out the full amount that is owed “with the greatest promptness that is administratively feasible,” Labor Department officials told the GAO they didn’t know how many states had begun working to do so.
“States count and report the compensable weeks claimed; typically, this closely approximates the number of individuals filing initial or continued claims,” a Labor Department spokeswoman said. “However, given the unique challenges of the Covid virus, multiple weeks of retroactivity in the new Cares Act UI programs, and the states’ large backlogs across all programs, this approximation was less accurate than before.”
The spokeswoman said the agency was beginning to address two GAO recommendations. It agreed “to revise the weekly news release to clarify the numbers do not represent unique individuals filing claims, and to pursue options to secure state reports of the unique number of individuals filing claims.” The Labor Department doesn’t anticipate any changes to how claims are counted, she added.
The GAO report said much of the inaccurate data in the department’s weekly jobless-claims reports stemmed from inconsistent reporting from states, many of which have been overwhelmed by processing backlogs of claims.
The GAO report comes as two key coronavirus-relief programs—the PUA and an extended availability of regular unemployment-insurance to 39 weeks from the usual 26—are set to expire at the end of December. Negotiations between Democrats, Republicans, and the White House over another round of coronavirus relief have been stalled for months.
Ever since lockdowns to contain Covid-19 caused economic activity to collapse in March, the Labor Department’s weekly jobless-claims numbers have been one of the most important economic data points tracked by policy makers and investors. Figures are reported with a one-week delay, providing a nearly real-time picture of changes in the labor market.
But the Labor Department report for the entire U.S. relies on incoming data from state unemployment offices, which were swamped with applications for benefits in the early months of the pandemic. As a result, claims were initially underreported as state offices struggled with a huge backlog of applications.
Because the department uses the total count of weeks claimed as a proxy for the number of people claiming benefits, a laid-off worker who had to wait a month to file her claim could have been counted as four people once the application went through. In such cases, jobless claims have also been overestimated at times.
Vaccine Prediction from Operation Warp Speed Official
A top official of Operation Warp Speed — the U.S. government’s massive effort to develop and distribute a coronavirus vaccine — confidently predicted Monday that everyone who wants a vaccine will be able to get one by June.
Lt. Gen. Paul Ostrowski (Ret.), the director of Operation Warp Speed’s supply, production and distribution, was asked during an interview on MSNBC about his vaccination expectations by June: “100% of Americans that want the vaccine will have had the vaccine by that point in time that time. We’ll have over 300 million doses available to the American public well before then.”
It was unclear if he was referring to the first dose of the vaccine or both doses. The COVID-19 vaccination process will take around six weeks, with a month before two vaccinations, and then about two weeks to make sure antibodies have developed.
Biden Economic Team
As the incoming Biden-Harris administration has unveiled its economic team, it’s clear most of them have been here before. To some extent, that includes both the policy roles they’re taking and the environment in which they’re doing it. Most helped shape the economic policies of the Obama administration, during and after the 2008 financial crisis.
Treasury
Federal Reserve Chairwoman Janet Yellen, Mr. Biden’s pick to head the U.S. Treasury. Very much a known quantity, she has commanded respect on both sides of the aisle, though from a largely apolitical perch at the Federal Reserve.
She is likely to be confirmed, prove careful with her comments, and at least win a hearing from Republican and Democratic lawmakers alike once on the job, predicts Ian Katz, a policy analyst with Capital Alpha Partners.
National Economic Council
Mr. Biden has named Brian Deese, another BlackRock alum, to run the National Economic Council, the White House panel that formulates administration economic policy. Most recently the asset manager’s global head of sustainable investing, he was the NEC’s deputy director under President Obama.
During the Obama administration, he played a key role in U.S. negotiations toward the 2015 Paris climate accords and worked on auto- and financial-industry issues. During his 2013 confirmation hearing for a role at the Office of Management and Budget, he stressed the idea that stimulus spending should target not just where it would do the most immediate good, but also where it would best improve future productivity and competitiveness.
Council of Economic Advisers
Where the NEC coordinates administration economic policy, the Council of Economic Advisers serves more as an in-house think-tank, developing and evaluating proposals. Mr. Biden has nominated Princeton labor economist Cecilia Rouse to head it, a job Janet Yellen held under President Clinton.
Dr. Rouse’s focus on the economics of education has led her to write on the benefits of community college and the limited contribution school voucher programs make to student achievement. A 1997 paper she coauthored showed that an orchestra was significantly more likely to hire women when musicians auditioned behind a curtain, disguising their gender. She also has emphasized how flexible workplace policies can benefit women and the country as a whole. “Wider adoption of such policies and practices may well have benefits to more firms and workers, and for the U.S. economy as a whole,” she testified in 2020.
Office of Management and Budget
Mr. Biden’s most controversial economic nominee so far may be Neera Tanden, a think-tank CEO who helped design aspects of the Affordable Care Act, but less for her policy work than her political sniping. In particular, she has drawn the ire of Republican lawmakers for her criticism of them on Twitter. (One Republican staffer dismissed her nomination as a “sacrifice to the confirmation gods.”)
As a former adviser to Hillary Clinton, she has also tangled with supporters of Sen. Bernie Sanders, the top Democrat on the Senate’s budget committee. Sen. Sanders, in turn, has criticized her and the think-tank she runs, the Center for American Progress, as being a divisive force in the Democratic Party. But officials with the Biden transition team point to praise from Sen. Elizabeth Warren, as well as from Bill Kristol, a longtime Republican and critic of President Trump.
State, Local Governments Slashed Spending After Covid – Next Year Could Be Worse
The pandemic-induced economic downturn hit the nation’s state and local governments harder and faster than any other in almost 70 years. In May, public-sector employment plummeted, with fewer people working for state and local governments than at any point since 2001, according to the Labor Department.
As hard as this year has been, next year could be worse. Governments went into the downturn with fat reserve funds and have benefited from federal aid. Barring a quick economic recovery or another round of stimulus, state and local officials could have to make more cuts.
Moody’s Analytics estimates state and local governments faced a $70 billion to $74 billion shortfall in the 2020 fiscal year. That could balloon to $268 billion in 2021 and $312 billion in 2022 absent more federal help. Unlike the U.S. government, almost all state and local governments are required to balance their budgets every year.
State and local government spending on public services fell at a seasonally adjusted annual rate of 3.7% in the third quarter from the second, according to the Commerce Department. That followed a 6% decline in the second quarter, the sharpest since 1952. By October, the sector had roughly 1.2 million fewer jobs than a year earlier.
It could take four to eight years for the national economy to recover from the pandemic, estimates Dan White, director of fiscal-policy research at Moody’s Analytics. State and local governments could take up to 10 or 15 years, he said.
Further budget cuts could weigh on the national economy for years, analysts warn. Public-sector spending at the state and local level accounted for 8.5% of the U.S. economy and 13.1% of all jobs in 2019, making it a larger sector than retail on both counts.
“State and local governments provide essential services,” Federal Reserve Chairman Jerome Powell told lawmakers in June. “It will hold back the economic recovery if they continue to lay people off and if they continue to cut essential services.”
The pandemic’s toll of job losses and closed businesses hit governments’ main revenue sources—income, sales, and corporate taxes. Between March and September, state revenues in those three categories were down 4.8% from the same period a year ago, according to data compiled by Lucy Dadayan, a researcher at the Urban Institute.
Program Notices & Reminders
Village of Shorewood Announces CARES Small Business Relief Program – Deadline to apply is this Friday, December 4th!
The goal of the Shorewood CARES Small Business Relief Program (“Program”) is to provide financial support for the most impacted Shorewood small businesses in order to support their continued success as they navigate the coronavirus pandemic into 2021. Providing a monthly reimbursement for payroll and rent/mortgage (two of the most expensive operating costs) through this Program will ensure that business owners are not only able to keep the business open but also to focus on the future of their business. This Program coupled with the 2021 Business Fee Waivers are intended to encourage business owners to look to the future and set the stage for a successful new year.
Learn more about the program by clicking here – http://vil.shorewood.il.us/business/COVID-19/shorewood_cares.aspx
ComEd Bill Assistance
Small-business customers can visit ComEd.com/SmallBizAssistance or call 1-877-4-COMED-1 (1-877-426-6331) to learn more or apply for the Small Business Assistance Program.
ComEd’s bill-assistance programs also include flexible payment options for residents, financial assistance for past-due balances and usage alerts for current bills. Any customer who is experiencing a hardship or difficulty with their electric bill should call ComEd immediately at 1-800-334-7661 (1-800-EDISON-1), Monday through Friday from 7 a.m. to 7 p.m. to learn more and enroll in a program.
Business Interruption Grant
Funds still remain and the program is still open for application. Please visit:
https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/C19DisadvantagedBusGrants.aspx
SBA EIDL
Low-interest Economic Injury Disaster Loans (EIDLs) from the U.S. Small Business Administration (SBA) are still available to Illinois small businesses, small agricultural cooperatives, small aquaculture businesses and private nonprofit organizations.
The SBA has opened a Virtual Business Recovery Center to apply online using the Electronic Loan Application via the SBA’s secure website at https://DisasterLoanAssistance.sba.gov/. Business owners and residents should contact the SBA Customer Service Representatives at
(800) 659-2955 for assistance in completing their applications. Requests for SBA disaster loan program information may be obtained by emailing FOCE-Help@sba.gov.
Tell Congress to Make PPP Loans Deductible – Call to Action
The Paycheck Protection Program Flexibility Act of 2020, or PPP, was passed in order to provide small businesses across the United States crucial relief during widespread government shutdowns due to the COVID-19 pandemic. These loans can be forgivable when proceeds are used for payroll, rent, mortgage interest and utilities. Congressional leaders intended for PPP funded expenses to be deductible like other business expenses.
Despite the intent of Congressional leaders, additional legislation is needed to make PPP funds used to pay business expenses deductible. The failure to allow these deductions will have a devastating impact on small businesses struggling to keep their doors open and retain their employees.
Are you a small business owner who thought salary and expenses paid by PPP loans would be deductible? In partnership with the Small Business Advocacy Council (SBAC), we’re asking you to please contact your Congressional leaders and ask them to sponsor and strongly advocate for legislation that makes salary and other businesses expenses paid for by a PPP loan deductible!
You can contact your Senators and House Representative here: https://oneclickpolitics.global.ssl.fastly.net/messages/edit?promo_id=10057
See below for two articles for further information / aid on PPP forgiveness and deductibility
7 Resources for PPP Loan Forgiveness Help
https://www.uschamber.com/co/run/business-financing/ppp-loan-forgiveness-resources?utm_medium=Email&utm_source=SFMC&utm_campaign=MO_Newsletter&utm_content=2020_11_25
Will You Owe Taxes on Your Paycheck Protection Loan?
https://www.uschamber.com/co/run/finance/tax-implications-of-paycheck-protection-loans
SBDC at JJC Update
Here is a list of upcoming programs delivered from the Small Business Development Center through Joliet Junior College:
E-Commerce Webinar – Third Party Platforms to Sell Your Product
Date: 12/3/20
Time: 5:00 PM – 6:00 PM (CST)
E-commerce – Third Party Platforms to Sell Your Product Louis Kreppert has sold over $500,000 of product using platforms like Amazon, Facebook, eBay, and Google Merchant. Learn how to sell your products where the eyeballs are – without paying for advertising. https://ilsbdc.ecenterdirect.com/events/33413
Funding Your Business
Date: 12/8/20
Time: 4:00 PM – 5:00 PM (CST)
Funding your business is critical for start-ups as well as companies who are looking to expand. Establishing business credit is the first step. Get a basic understanding of what banks look for to qualify for a loan from Nancy Kuzma of Old Plank Trail Community Bank/Wintrust Community Bank. https://ilsbdc.ecenterdirect.com/events/33653
Video Marketing for Small Business
Date: 12/10/20
Time: 4:00 PM – 5:00 PM (CST)
Video production once meant bringing in a full production crew to produce a television commercial. Now, a child can produce a quality video on their phone. And that video is a very important component to your website, social media pages, product information, as well as your local advertising. Learn the benefits of video marketing and hear from Mike Puglitsch at Acclaim Media about how easy the process can be. https://ilsbdc.ecenterdirect.com/events/33572
Website Development
Date: 12/15/20
Time: 3:00 PM – 4:00 PM (CST)
A website is more than just a placeholder to occupy property in cyberspace. Your website should be the central point that your social media, SEO, email marketing, pay per click ads, content, CRM…. orbit around to generate business for your business. Join Jason McCoy from WSI to discuss how to develop a website that meets your needs. https://ilsbdc.ecenterdirect.com/events/33652
21 Topics in 21 Minutes for 2021 Growth
Date: Scheduled one-on-one session
In less than 30 minutes, the Illinois Small Business Development Center at Joliet Junior College will help you prioritize key 2021 business plans whether it is for your people, your product, your marketing, your sales, your money or the impact of this crisis. In this short, one-on-one exercise, we will help you determine up to three of the biggest opportunities for growth in the year ahead. We will offer no-cost tools to develop your strategy for success in those areas. Email us at SBDC@JJC.edu and we will send you a link for registration.
Business Services Webinar from the Workforce Center of Will County
Join this Webinar to learn how the Workforce Center can assist your business with resources you need to find, hire, and retain hard-working employees.
Wednesday, December 9, 2020 from 8:30 a.m. – 9:30 a.m.
To register for the webinar please click on the link below:
https://bit.ly/36e7yY8
Finally, we will host our next Virtual Conference on Thursday, December 10th.
Town Hall Meeting – A follow up on the last 6 months
Please join the Joliet Chamber for an interactive virtual conference with community leaders from various business sectors including education, healthcare, and governmental affairs, for a follow-up conversation to the last Town Hall Meeting.
Panel of Speakers will include Dr. Arvid Johnson from the University of St. Francis, Ruth Colby from Silver Cross Hospital, Sue Olenek from the Will County Health Department, Barry Kolanowski from Senior Services Center, and Mike Paone from the Joliet Chamber. Here is the link to register: http://jolietchamber.chambermaster.com/events/details/2020-webinar-december-10-town-hall-meeting-5978
Stay well,
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct