President Biden visited small businesses in Pennsylvania on Tuesday to promote the benefits of his $1.9 trillion coronavirus relief bill, stressing the disproportionate impact of the pandemic on communities of color.CreditCredit…Doug Mills/The New York Times
President Biden visited a small business in Pennsylvania on Tuesday to promote the $1.9 trillion American Rescue Plan, which contains an assortment of measures aimed at helping small employers and their workers endure the pandemic’s economic shocks.
Mr. Biden arrived Tuesday afternoon in Chester, a Philadelphia suburb, to visit Smith Flooring, a Black-owned business that supplies and installs flooring. White House officials said the shop cut payroll over the last year, from 22 union employees to 12, after it saw revenues decline by 20 percent amid the pandemic. It has survived, the officials said, thanks in part to two rounds of loans from the Paycheck Protection Program, which Congress established last year to help small businesses and has replenished on multiple occasions.
“This is a great outfit. This is a union shop,” Mr. Biden said in brief remarks. Its employees, he said, “work like the devil, and they can make a decent wage, a living wage.”
Mr. Biden’s aid bill, signed last week, added $7 billion to the program. But it created a $29 billion grant fund for restaurants and set aside additional money for several relief programs run by the Small Business Administration, including a long-delayed grant program for music clubs and other live-event businesses that the agency said would start accepting applications early next month.
Mr. Biden’s visit on Tuesday came as the Senate confirmed his nominee to run the Small Business Administration, Isabel Guzman, by an 81-17 vote.
The Biden administration’s most sweeping small-business initiative has been hindered by problems. Last month, the administration announced changes to the Paycheck Protection Program — which is currently dispensing funds appropriated by Congress in December — that were intended to get more money to freelancers, gig workers and other self-employed people.
The owners of Smith Flooring, Kristin and James Smith, secured their second loan from the program as part of one of the Biden administration’s changes, which created a two-week exclusive period for certain very small businesses to receive loans.
Vice President Kamala Harris and her husband, Doug Emhoff, were in Denver on Tuesday, also highlighting the administration’s small-business spending during a trip that will include meetings with small business owners.
Women and minority owners are much more likely to run tiny businesses than larger ones, and they were disproportionately shut out of the Paycheck Protection Program under earlier rules that calculated such companies’ forgivable relief loans based on the size of their annual profit. The Biden administration’s more forgiving formula lets those businesses instead use their gross income, a switch that significantly increased the money available to many applicants.
But the change was not retroactive, which has set off a backlash from the hundreds of thousands of borrowers who got much smaller loans than they would now qualify for. Many have used social media or written to government officials to vent their anger.
JagMohan Dilawri, a self-employed chauffeur in Queens, got a loan in February for $1,900. Under the new rules, he calculates that he would have been eligible for around $15,000. That wide gulf frustrated Mr. Dilawri, who has struggled to keep up on his mortgage, car loan and auto insurance payments since the pandemic took hold.
“When the Biden administration came, they said, ‘We will be fair with everyone,’” he said. “But this is unfair.”
Small Business Administration officials have said that only Congress can fix that disparity. Some key Democratic lawmakers say they are willing.
“I am aware of the situation facing these sole proprietors and am working to ensure they get the funds they are entitled to under the Biden administration’s rule changes retroactively,” said Representative Nydia M. Velázquez, a New York Democrat who leads the House Small Business Committee. “My staff and I are working with the S.B.A. and congressional Republicans to find a path forward.”
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
Wall Street fell on Tuesday, with the S&P 500 slipping 0.2 percent from Monday’s record. The Nasdaq composite gained 0.1 percent.
The Stoxx Europe 600 and London’s FTSE 100 each rose about 0.8 percent despite recent disruptions to the vaccine rollout in Europe and growing expectations of a new round of pandemic-related restrictions there.
Several European countries, including Germany, France, Denmark and Norway, have halted the use of the AstraZeneca vaccine after reports that some people had developed fatal brain hemorrhages and blood clots after receiving the vaccine. AstraZeneca has said there is “no evidence” of a link, and the European Medicines Agency and the World Health Organization have warned against suspending use of the vaccine.
But investors are in wait-and-see mode ahead of central bank meetings this week.
On Wednesday, the Federal Reserve will announce its policy stance and publish new economic forecasts. Analysts at BNP Paribas said the Fed chair, Jerome H. Powell, faces a tricky balancing act: acknowledging the improved economic outlook and increase in bond yields, while defending the central bank’s easy-money policies.
Investors have been focused on interest rates and inflation expectations for the past several weeks, concerned that resurgent growth in the United States might prompt the Fed to start to wind down efforts to keep rates low sooner than they’d expected. Fed officials have repeatedly said that they’re not concerned about lasting inflation, and that they have no intention of ending their efforts to keep the financial system functioning smoothly.
On Thursday, the Bank of England will announce a rate decision. Economists are not forecasting a change in policy.
Hong Kong’s Hang Seng Index and the Nikkei in Japan finished the day up more than half a percent.
What else is happening in markets
Shares in NatWest, formerly known as Royal Bank of Scotland, fell 1.5 percent after Britain’s financial regulator said it had begun criminal proceedings against the bank for failing to properly follow money laundering rules.
Oil prices fell. Futures of West Texas Intermediate, the U.S. crude benchmark, dropped 0.9 percent to $64.80 a barrel.
Volkswagen shares gained more than 11 percent after the German carmaker said on Monday that it was going all in on electric cars, with plans to build battery factories in Europe and to work out how to drastically cut charging times.
Facebook will pay Rupert Murdoch’s News Corp for its journalism in Australia. The deal, announced on Tuesday, comes a month after Facebook temporarily banned all news links from its platform in the country in response to legislation that sought to force digital giants to compensate publishers. Few details of the multiyear deal, including how much Facebook will pay News Corp, were released. Google reached its own three-year deal News Corp last month.
Commerzbank, one of Germany’s largest banks, said on Monday that Hans-Jörg Vetter would step down as chairman of the supervisory board for health reasons after barely six months in the position. Mr. Vetter, 68, was appointed chairman in August over the objections of shareholders led by Cerberus, the private equity firm, which owns a 5 percent stake in Commerzbank and wanted someone it thought would be more likely to force changes. The German government is the bank’s biggest shareholder with 15 percent.
Viewership for the Grammy Awards on CBS on Sunday fell to 8.8 million viewers, according to Nielsen, the television research firm. That’s a new low for the show and a 53 percent drop compared with last year’s show, which drew 18.7 million viewers. The previous low was 17 million viewers in 2006, when Green Day won record of the year.
The future for the travel industry is looking a little brighter as more Americans get vaccinated, states open up and resorts sell out, the nation’s largest airlines said Monday. Speaking at the J.P. Morgan Industrial Conference on Monday, the chief executive of Delta Air Lines, Ed Bastian, said he was starting to see “real glimmers of hope” as ticket sales accelerated. At the same conference, the United Airlines chief executive, Scott Kirby, said his company would end the month having taken in more cash from operations than it spent.