Congress is about to put together another coronavirus relief package, and one member of the Virginia delegation has a suggestion on helping businesses.
The Paycheck Protection Program has been very popular for businesses seeking forgivable loans to help keep their workers. But how much money should be spent on employees to stay at home rather than show up at the workplace?
Congresswoman Jennifer Wexton is a Democrat from Northern Virginia, and she says businesses should be able to spend more money on things like rent or utilities or paying the mortgage.
"In higher-cost areas like Northern Virginia where I live, the borrower’s non-payroll expenses are much higher. So the 75/25 ratio may not work for them," she explains. "A majority of the Paycheck Protection Program loan or proceeds should definitely go toward payroll. But the 75/25 ratio may require a little bit more flexibility.”
But the idea that the Paycheck Protection Program would spend less than 75% on payroll is a red flag to some.
“75/25 is plenty high," says Kim Bobo at the Virginia Interfaith Center for Public Policy. The purpose is to protect your payroll, your people, and not your property. So 25% is plenty high. I think it’s a bad idea.”
It’s an idea that’s about to be debated by Democrats in the House.