Executive Session

Floor Speech

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Mr. CORNYN. Madam President, like other Senators, around this time of the year, I am used to being with folks from home who are traveling to Washington, DC. Between spring break trips and industry fly-ins, spring is normally a very busy season here at the Capitol. I always look forward to seeing both new and familiar faces and spending time with my constituents and talking about the challenges they are facing and the changes they would like to see coming out of Congress.

Yet, as we all know, this is not a typical springtime in Washington. Normally busy sidewalks and hallways are largely empty, as our constituents hunker down at home while we continue working to get them the help they need. Just as Texans have adopted new routines to meet social distancing requirements, so have I, as have all of us.

I know I am not alone among my colleagues when I say that over the last few weeks, I have logged some serious hours on phone calls and video conferences with folks across Texas. Actually, I have been a little bit surprised at how efficient it is in terms of reaching large numbers of people, and I think it will probably change some of the ways we work here and some of the ways we act with our constituents here in the future.

I spoke with those in the medical field about the ongoing challenges to our frontline healthcare workers, the progress toward developing a vaccine, antibody tests, and the like.

I have talked with the Texas Farm Bureau, our farmers and ranchers, our grocery store workers, and our food bank employees about the need to make sure that all Texans can access the food they need, especially during a time like this.

I have talked with mayors, county judges, and other leaders in our communities about the work they are doing.

I was listening to our friend and colleague from Connecticut who believes that the response needs to be coming out of Washington and that we all need to simply fall in line according to the dictates of the national government. Well, it raises interesting questions about the Constitutional Convention and the agreement to have a Federal system, not a national system. We have sovereign States that have their own sphere of responsibility. Our cities and counties are best able, in my view, to respond to local conditions.

Rather than a command and control response, what we have had in Texas and I dare say in most other places has been a collaborative approach. Working with the national government to provide the resources and some of the guidance is very important. But our Governors, who control the National Guard, which has come out to help do testing, help stock food banks, and help build temporary hospital facilities, and our mayors and county judges and local officials have really done an outstanding job. I am very proud of the work they have done. We haven't just taken orders on high from the Federal Government; we worked together, hand in glove, with the Federal Government.

Of course, I talked to countless small business owners across our big cities and small towns and everywhere in between about the financial strain caused by the pandemic, and it is significant, to say the least. Many, of course, were forced to close their doors or dramatically scale back their operations, and many have had to make hard decisions to stay afloat.

I was just emailing with a friend of mine in Dallas who has ownership in a company that just declared chapter 11 bankruptcy. Our small businesses are the heart and soul of our communities. They are our favorite locally owned restaurants; the florists we call upon on anniversaries, birthdays, and other holidays; the drycleaners, the barbershops, the gyms, the pharmacies--all the places we have been going for years. They feel like an extended part of our family. They are part of what make our communities unique, and they are a huge driver of our economy.

In Texas and across the country, small businesses employ nearly 50 percent of the local workforce. For many of these workers, the closures and cancellations brought on by the coronavirus have put their livelihoods in jeopardy, with many losing some or all of their income and many, their jobs entirely.

As the Senate was working on our third response package back in March, we knew that without a serious investment in our small businesses, the result would be catastrophic. That is why we created the Paycheck Protection Program through the CARES Act to provide cash flow assistance for our small businesses. As we know, those low- interest loans can be used to cover everything from payroll, to supply chain disruptions, to rent or mortgage. And if the employers are able-- I underline the word ``able''--if they are able to keep their employees on the payroll until June, then much of those loans can be turned into grants.

During my calls and video conferences with chambers of commerce and small business owners throughout Texas, I have been able to talk about the benefits of these loans and how to access them. Small Business Administration staff have joined me on dozens of these calls to answer technical questions about the loan program and other types of assistance offered by the SBA, which has been really valuable and appreciated by everyone.

Small businesses in my State have jumped at the opportunity to take advantage of the PPP loans and start talking with their banks and gathering up paperwork and going through the formal application process.

As we know now, it became quickly obvious how popular the PPP program was and that it would exceed the funding levels after 2 weeks. That indicates the kind of demand and the kind of need and that our response was actually hitting the target. But after 2 weeks, the first $350 billion was exhausted and depleted. From that first $350 billion, 135,000 small businesses in Texas received loans--more than any other State. That program brought approximately $28.5 billion to Texas small businesses and protected thousands of jobs.

Well, we know, after a little bit of jockeying back and forth with the House, Congress finally replenished the Paycheck Protection Program with an additional $320 billion, and that money is flying out the door as we speak.

You don't have to look far to see why this program is so popular.

Valerie Gonzalez-Handly owns Delicious Tamales in my hometown of San Antonio. Like other restaurants across the country, her business struggled as the stay-at-home orders were put in place. Delicious Tamales closed for 2 weeks last month but was able to reopen because of the $232,000 loan they received through the Paycheck Protection Program. All 38 employees returned to work. Valerie called the Paycheck Protection Program a ``life saver.''

For patients at a clinic in Tyler, TX--another PPP loan recipient-- these loans could be a literal life saver. Bethesda Health Clinic provides healthcare services to low-income and uninsured Texans in the Tyler area. The clinic doesn't receive State or Federal funding, and one-third of their budget comes from the Hangers of Hope thrift stores they operate, which were forced to close. The clinic had to furlough their employees in order to survive the financial squeeze but was able to take advantage of the Paycheck Protection Program. Krysti McWha is the chief financial and operations officer, and she said this has erased a lot of worry for the clinic and allowed the furloughed employees to return to work. It has also enabled them to continue to serve the public during a time of heightened healthcare concerns.

The Paycheck Protection Program has been vital to Texas small businesses and I dare say to the Nation's small businesses. I am glad Congress, working together as we should during a time of national emergency, was able to provide this lifeline and replenish these funds when they ran dry.

That is not to say, though, that this program has been implemented without a hitch. When you do something this big and this fast, there are bound to be some hiccups. We expected there would be these small holes and gaps in what was needed, and over the last few weeks, those have become pretty clear.

One of those issues is the tax deductible expenses for the businesses that take advantage of these loans. Businesses are normally able to deduct wages and other business expenses from their taxable income, but the notice issued by the IRS said small businesses cannot deduct these expenses, which is exactly the opposite of what we intended to do. Just to give an idea of how harmful this could be, if a small business's payroll during the 8-week period covered by a loan were $100,000, that amount could not be deducted as a business expense when they file their taxes.

Our goal with this legislation was to help--not hurt--to help small businesses remain solvent and keep their employees on the payroll so they can recover from this pandemic as soon as possible and be ready for what I hope is a v-shaped bounceback in our economy once we defeat this virus. We certainly didn't intend to make next year's tax season a nightmare or to add to the burdens of these small businesses. Yet, based on the IRS's guidance, that is the path we are headed down.

We have to right this wrong. Yesterday, I introduced the bipartisan Small Business Expense Protection Act with the chairman and ranking member of the Finance Committee, Senator Grassley and Senator Wyden, along with Senator Rubio, who chairs the Small Business Committee, and Senator Carper, who serves, as I do, on the Finance Committee. This legislation will clarify that small businesses can still deduct expenses that were paid for with a forgiven paycheck protection loan from their taxes. Without this clarification, small businesses will be up the creek without a paddle when they file their taxes next year.

This program was created to reduce the financial barriers our small businesses are trying to overcome, not to add more. This bipartisan bill has already received support of the American Institute of CPAs-- certified public accountants--and is critical to ensuring America's small businesses receive the full benefits intended by Congress in the Paycheck Protection Program.

As we continue to provide relief for America's workers and small businesses, it is critical that this fix be included. Texas small businesses saw the Paycheck Protection Program as a lifeline during this incredibly challenging time. Let's not make them regret grabbing ahold of it.

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