Highlights from the Biden-Harris Plan to Rescue and Revitalize Main Street
The Trump administration’s ongoing failure to manage the COVID-19 crisis and corrupt recovery that left behind small businesses has put the U.S. on the verge of an economic disaster. More than 1 in 6 small businesses now risk permanent closure, and many of those that manage to survive the pandemic may ultimately collapse under the weight of enormous pandemic-related debt.
For months, Biden has urged President Trump to get off the golf course and provide immediate relief to struggling small businesses. Biden has released detailed proposals to set up equitable small business support and outlined an ambitious “restart package” to help them reopen. And he has laid out more than two dozen policies to help small businesses build back better through greater access to capital, expanded procurement opportunities, and targeted resources for veteran-, women-, and minority-owned businesses, among other things. Yet President Trump continues to do nothing.
Small businesses deserve better than President Trump. They deserve a President who appreciates the essential role small businesses play in our economy and communities, and who cares about their long-term success. Biden will be that President. Joe Biden and Kamala Harris are calling for bold, transformational steps to help small businesses around the country — from big cities to small towns — persevere through the pandemic, recover, and build back better.
TRUMP’S MAIN STREET RECORD: DESTROYING FOUR HUNDRED THOUSAND SMALL BUSINESSES — AND COUNTING
President Trump could have spent the last four years addressing many of the persistent challenges facing small businesses. He could have helped them obtain capital, win federal contracts, and compete against large corporations. He could have torn down barriers to entrepreneurship for women, veterans, and people of color. But he didn’t. Instead, he relentlessly pursued an economic agenda that rewards wealth over work, favors Wall Street over Main Street, and benefits those with monopoly power over entrepreneurs running small businesses. Trump’s tax giveaway went to the largest corporations and wealthiest families, whose profits have soared, while neglecting the needs of Main Street small businesses, whose profits have stagnated.
When the virus began to spread, Trump made sure that Wall Street — not Main Street — was taken care of. Instead of developing a real plan to address the growing crisis, he lied to the American people because he was concerned about the impact on the stock market. As he said on tape, “I wanted to always play it down. I still like playing it down.” Then, he ensured that Wall Street got the taxpayer-funded bailout it wanted. Americans on Main Street — small business owners and the workers they employ — got too little, too late.
Trump prioritized Wall Street by:
- Using U.S. taxpayer dollars to underwrite a $4 trillion lending effort that has almost exclusively supported large corporations.
- Gifting an additional $160 billion in new tax cuts to corporations and wealthy individuals — on top of the $2 trillion in tax cuts Trump gave them in 2017.
- Promising to cut capital gains taxes for the wealthiest investors, even though 99% of the benefits would go to the top 1%.
Trump neglected Main Street by:
- Asking Congress to slash more than $200 million from small business programs as COVID-19 began to spread around the country.
- Failing to ensure that even 1% of the $600 billion “Main Street” fund actually reached its intended recipients.
- Allowing big banks to provide “concierge treatment” to their larger, existing customers, through the Paycheck Protection Program (PPP) while mom-and-pop small businesses struggled to obtain relief.
- Putting as many as 91% of Latino-owned businesses and 95% of Black-owned businesses at a disadvantage when they initially tried to apply for PPP funding.
- Failing to act as 80% of the small businesses fortunate enough to have received PPP loans exhausted their funding, even though many were still struggling and more than $100 billion in PPP funding remained unspent.
To date, more than 400,000 small businesses have collapsed in the wake of Trump’s tragic mismanagement of the current crisis. Many of the remaining businesses — and their 60 million employees — are now struggling to hang on:
- 75% of small businesses have been negatively impacted by the current crisis.
- 1 in 6 small businesses remain shuttered and many may never reopen.
- Over half of small businesses say it will take more than six months to return to normal operations — or that they will never fully recover
- The number of active Black-, Latino-, Asian-, and woman-owned small businesses plummeted by 41%, 32%, 26%, and 25% respectively between February and April.
- 40% of Black-owned businesses will have to lay off employees or cut wages if they do not receive assistance in September, and 43% will deplete their cash reserves by the end of the year.
BIDEN’S MAIN STREET RESCUE: PROVIDING SMALL BUSINESSES WITH THE RESOURCES THEY NEED TO SURVIVE, RECOVER, AND BUILD BACK BETTER
More than 1 in 6 small businesses remain closed and many of those that manage to survive the pandemic may ultimately collapse under the weight of enormous pandemic-related debts. Biden is calling for additional resources and technical assistance to help small businesses get back on their feet, put the current disaster behind them, and build back better.
Helping Small Businesses Get Through the Current Crisis
Biden believes we need immediate action to extend new small business relief to struggling firms. Donald Trump should do what a president is hired to do and what he has thus far failed to do: lead. He is urging President Trump to bring together the leaders of Congress to put the full resources of the federal government toward preventing this crisis from inflicting further pain on small businesses. He is calling for repurposing the more than $200 billion in Treasury Department bailout money that Trump failed to deliver to the small businesses and communities it was intended for, and the more than $100 billion in PPP funding that Trump allowed to go unused even as small businesses suffered. Trump and senior administration officials have talked a big game about this, but have failed to deliver. The Trump administration has pledged to reinstate the program but has yet to lift a finger to make that — or any other relief for families, businesses, and communities– happen. Trump has also failed to lay out a plan for the reforms PPP desperately needs. Merely reinstating the deeply flawed program is woefully insufficient — PPP must be improved and revamped as part of a broader relief package to ensure small businesses that have experienced significant losses finally get the help they need. Joe Biden has called for:
- An overhaul of the Paycheck Protection Program to guarantee every qualifying small business with 50 employees or fewer gets relief; help small businesses — especially minority-owned businesses — obtain relief quickly and easily; issue flexible grants — not loans — for true small businesses that have lost substantial revenue; and address the rampant fraud and unjust enrichment that’s taken place under Trump’s watch.
Expand Access To Capital For New And Established Small Businesses
Even after the coronavirus crisis is over, many aspiring and established small businesses owners — especially people of color — will struggle to obtain the capital they need to start or expand their own businesses. Biden will:
- Spur more than $50 billion in public-private venture capital to entrepreneurs in disadvantaged areas by funding successful state, local, tribal, and non-profit investment initiatives.
- Encourage private equity investment in businesses in disadvantaged areas by expanding the New Markets Tax Credit to $5 billion yearly and making it permanent.
- Expand access to $100 billion in low-interest business loans by funding state, local, tribal and non-profit lending programs in disadvantaged areas.
- Ensure entrepreneurs in small towns and rural areas have access to the capital they need by expanding funding for the Rural Microentrepreneur Assistance Program and increasing the number of Rural Business Investment Companies.
- Expand the role of Community Development Financial Institutions by increasing their direct funding and expanding their capacity to offer loans to start-ups and established small businesses.
- Strengthen and expand the Community Reinvestment Act to ensure that our nation’s bank and non-bank financial services institutions are serving all communities.
Make A Historic Commitment To Equalizing Federal Procurement
Biden’s “Build Back Better” recovery plan includes a $400 billion procurement effort designed to support small businesses and tackle inequities in the federal contracting system. Specifically, Biden will:
- Increase federal contracting opportunities for certified “small disadvantaged businesses” by expanding the Small Business Administration’s 8(a) business development program.
- Require prime contractors to develop and execute plans to increase subcontracting opportunities for small disadvantaged businesses.
- Protect small businesses from federal and state contract bundling which often prevents smaller firms, especially those owned by Black and Brown people, from effectively bidding on procurement contracts.
- Incentivize state and local governments and private sector partners to contract with small disadvantaged businesses.
- Strengthen implementation of the Buy Indian Act to increase procurement opportunities for Native-owned businesses.
- Promote corporate mentorship programs between veteran-owned businesses and existing contractors to support veteran entrepreneurship.
Level The Playing Field For All Small Businesses
While the policies listed above will help millions of small businesses recover, obtain capital, and access other critical resources, too many may continue to struggle in a system that is so often tilted in favor of large, well-resourced corporations and independently wealthy individuals. Biden will:
- Enforce laws and regulations to combat corporate power, promote competition, and ensure markets work for everyone so that small businesses have a fair shot.
- Ensure military spouses have the full opportunity to start and grow their own businesses by providing micro-grants, mentorship, and technical assistance through a military spouse entrepreneurship pilot program.
- Improve and expand the Small Business Administration programs that most effectively support women- and minority-owned businesses, especially those owned by women of color.
- Increase the funding and stature of the Minority Business Development Agency.
- Unleash the full potential of businesses owned by Black and Brown people and other disadvantaged businesses to participate in the global marketplace.
- Create a national network of federally funded small business incubators.
- Establish an intensive, semester-long business development program at every public community college in the United States, as well as two-year HBCUs, TCUs, and MSIs.
- Employ the resources of the federal government to protect Native artisans.
- Give small businesses a tax break for starting a retirement plan and giving workers the chance to save at work.
- Open the door for Asset Managers owned by Black and Brown people by ensuring that federal government-led investment pools, including pension funds and endowments, allocate their assets in a manner that reflects the diversity of the country.