(Bloomberg) -- The U.S. Chamber of Commerce called Monday for a three-month cancellation of all payroll taxes paid by employers to address “a sudden and sharp drop in demand” facing businesses due to the coronavirus pandemic.
The powerful lobbying group included the recommendation, which faces bipartisan skepticism, among three policy proposals that it said the U.S. should enact in addition to an economic relief package the House passed last week.
The chamber called for the payroll tax to be canceled from March to May. President Donald Trump also has called for a payroll tax cut.
“No family and no business should go bankrupt just because of the temporary disruption in income caused by this outbreak,” Neil Bradley, the chamber’s chief policy officer, told reporters in a Monday call.
The chamber also pushed for the expansion and streamlining of loan programs for small businesses, including removing requirements that firms show they couldn’t access credit before seeking relief from the Small Business Administration. It also suggested creating credit facilities to provide loans and loan guarantees to companies with more than 500 employees if they’ve suffered “significant revenue loss” due to the virus.
All three proposals would require legislation, the group said. Bradley added that the chamber had been in regular contact by phone and email with the White House’s National Economic Council and Domestic Policy Council, the Treasury Department, congressional leadership and Vice President Mike Pence’s office, as he is heading up the virus response.
Emergency Lending
The chamber called for legislation to ease restrictions put in place after the 2008 financial crisis on the Federal Reserve’s use of its emergency lending window, with the aim of ensuring credit flows to bigger companies.
It said the Fed should work with other banking regulators and the Treasury Department to establish a system of credit facilities to provide loans and loan guarantees that can be accessed by businesses.
Bradley said he rejected “the idea that this is somehow a bailout,” pushing back on concerns expressed by some lawmakers that relief might benefit employers more than workers and that congressional action to prop up industries could resemble the unpopular economic packages that were passed to address the Great Recession.
“This is a very different episode than 2008,” Bradley said, emphasizing that the chamber sees the economy returning to strength after the virus and that companies would be able to pay back the loans. “To my knowledge, this is the first time where we’ve had to essentially halt commerce for a period of time.”
The chamber has been ramping up its approach to the virus after its Chief Executive Officer, Tom Donohue, earlier urged consumers to continue shopping and traveling and said, “Now is not the time to overreact or panic.”
The comments at the March 4 news conference “were based on the facts and guidance from federal, state and local officials at that time,” the group said. “The situation has evolved rapidly on a daily basis since then, and we are focused on solutions and resources to mitigate the impact of the virus on the American people and economy.”