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Right now, the outbreak of the COVID-19 virus is creating an economic crisis in the United States. As the public take critical steps to reduce viral transmission, consumer demand is plummeting. Businesses large and small are losing access to liquidity, putting them at serious risk of becoming insolvent and displacing millions of workers.
There are five steps the federal government can take right now to provide much-needed liquidity to businesses.Guarantee short-term business bridge loans. We need to create a credit facility to bypass bureaucracy and help banks and credit unions provide bridge loans to struggling businesses immediately. This injection of cash will help businesses stay afloat and pay their employees.Provide a nine-month waiver on the payroll tax. At this critical moment, employers and employees need all the capital they can get to keep people on the payroll.Delay federal tax estimates. All federal business tax estimates should be delayed until October. Additionally, all net operating loss claims should be carried back at least two years, and the IRS should process them promptly.Halt troubled debt restructuring. Troubled debt restructuring reduces the incentive for banks to work out new loan agreements with struggling borrowers. We have to temporarily halt this practice to make sure banks are giving businesses all the help they can.Delay or repeal the implementation of the Current Expected Credit Losses standard. This new standard makes it unnecessarily difficult for banks and credit unions to lend in a distressed economic environment. Eliminating it will help free up access to loans for every business.
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Topic: David Perdue: We can’t let the COVID-19 liquidity crisis become an insolvency crisis (Read 369 times)
