Washington D.C. — U.S. Senator Marco Rubio (R-FL) joined Thrive to discuss the success and future of the Paycheck Protection Program (PPP). See below for lightly edited highlights and listen to the full interview here . On the origin and impact of PPP:
“Interestingly enough, we had started work on it early in the process, initially as a tool for dealing with supply chains. We had done some work two years earlier, arguing that too much of our supply chain was being derived from vulnerable places overseas, primarily because of geopolitics. We were thinking: ‘What is small business’s role? And what can we do to repurpose some of these loans that are run through private lenders to small businesses in these key industries where we need to develop some resilience in our economy and the supply chain?’
“When the pandemic sort of emerged, our next view of it is: ‘Well, we’re going to have some supply chain disruptions because of the pandemic, particularly on the health care side, but just generally. How can we even tune it up to deal with pandemic-specific supply chains?’
“By the time we got to that day in March, where it was apparent that we were going to have lockdowns or shutdowns of large portions of our economy, we realized: ‘My goodness, we’re going to have entire Main Streets wiped out. They’re not going to be able to open. The governments in some places are not going to allow them to open for potentially weeks.’ We didn’t know how long, maybe months. ‘We’re going to have a contagion here of unemployment, a commercial real estate crisis, and a bunch of small businesses that are going to vanish and never come back.’ So, we needed to step forward and do something to at least keep people attached to their jobs.
“The view over there was we’re going to spend billions of dollars on unemployment benefits. Aren’t we better off keeping people attached to an employer via a paycheck that also provides some money for the small business to be able to make their overhead payments and keep current on their leases and/or rent? That’s how that came about fairly quickly.
“We understood that the SBA was too small to be able to do this through any of its existing programs. It would have to be run not just through the existing lenders that we now use for those loans, but in fact, we would have to amplify the number of lenders that were eligible to provide them.”
On who helped make PPP possible:
“The credit begins with my staff, the Small Business Committee, and myself as we worked through it in my own personal office. I also give credit to Senator Cardin and Senator Shaheen on the Democratic side. Senator Collins is another member of the committee on the Republican side who played a key role in sort of negotiating the details of it.
“Obviously, one of the intricacies of a country like ours that is so large and diverse is, for example, if you’re trying to help out a hotel or hospitality business, they’re seasonal in some parts of the country, so you have to adjust for that.
“Then the question came up of: ‘What do we do about non-profits, who have never traditionally been eligible for SBA loans or programs? What do we do about the growing number of Americans who are de facto small businesses but they’re independent contractors? They’re a one or two-person shop. What do we do for people who don’t have banking relationships? How do we get financial checks to lenders involved in this and [get them] to step up?’ So, they played a key role in putting all that together.
“The name I take credit for. I actually came up with the name Paycheck Protection Program because we wanted people to understand this was not a bail-out or give-away. This was a way to deliver, more effectively, unemployment benefits to people who weren’t technically unemployed but were going to be because their employer was shut down by a government measure.”
On how Rubio came up with PPP:
“I think the idea basically came from being very attuned to the needs of small businesses, from personally knowing a lot of small businesses. What I try to do is to put myself in their place: the guy that owns the diner we always go to, the friends that own a laundromat, individuals that have small retail outlets somewhere. Now the government says, not only can’t you open, […]
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