An April 15 “telephone town hall” hosted by U.S. Rep. Filemon Vela, D-Brownsville, fielded questions across a wide range of topics related to the coronavirus emergency, including financial assistance for struggling small businesses and the newly unemployed, with a mix of good and bad news.
Among the guest experts answering questions was Julian Alvarez III, the commissioner representing labor for the Texas Workforce Commission, and TWC Executive Director Ed Serna, who explained in response to a caller how unemployment benefits that are part of the $2 trillion CARES Act combine with unemployment insurance available through the state.
One thing the CARES Act does is expand eligibility for unemployment benefits to people who weren’t eligible before, specifically self-employed individuals, contract employees and employees of nonprofit organizations, he said.
“ The difference is, for the self-employed and contract employees, they won’t have any wage information in our system, because they haven’t previously been required to report, so they’ll probably have to provide some information that proves their income,” Serna said. “So bank statements or 1099s or billing records. Nothing very complicated, but something that’s detailed enough that allows us to calculate a benefit.”
Base benefits for contract employees or self-employed beneficiaries is $207 a week, though the CARES Act adds another $600 per week on top of that for all beneficiaries, he said.
“ That additional $600 will automatically get added,” Serna said. “You don’t need to call us back. You don’t need to log on to request the additional $600.”
Everyone applies for benefits the same way, by applying online through the TWC website or by calling TWC at (800) 939-6631, though Serna conceded it can be tough getting through due to the unprecedented flood of applications.
“ Our phone lines are absolutely jammed with people that are trying to get benefits, and now we’ve added this additional group of individuals,” he said. “We are working to resolve the phone line backlog. I would recommend to people that they go online to submit this application.”
TWC has six call centers up and running from 7 a.m. to 7 p.m. seven days a week, with a seventh possibly coming online Friday and an eighth operational in perhaps a week, Serna said. The agency has processed over 1.1 million unemployment claims already since the economy essentially came to a halt, about 93 percent of them submitted and processed online, he said, adding that the best time to apply online is from midnight to 5 a.m. due to system overload.
As with the CARES Act’s $250 billion for direct relief payments to Americans, however, undocumented workers (even if they pay federal taxes via an Individual Taxpayer Identification Number) are not eligible for unemployment benefits, although they are equally affected by the current economic crisis.
As for emergency help for small business owners through the U.S. Small Business Administration, the program that seemed to be working the best on April 15 was a victim of its own success by the next day. The Paycheck Protection Program, launched April 3 with $349 billion in CARES Act money to provide loans up to $10 million dollars to individual business owners to keep employees on the payroll and cover operating expenses, has run out of money.
Vela said he expected more money to be put into the program soon, though Democrats and Republicans in Washington can’t agree so far on changes to the next phase of the program, which was providing SBA-backed loans through community lenders. The SBA said Thursday that it had approved more than 1.6 million PPP loans valued at over $339 billion (more than 88,000 loans worth nearly $22 billion in Texas alone as of Tuesday but has stopped taking applications, leaving countless business owners in a lurch until more funds are made available.
Vela said during the town hall that the PPP was “working pretty well” — more than could be said for two other SBA programs: the Economic Injury Disaster Loan program and the EID Loan Advance, both offered directly through SBA. The loan advance program was designed to get $10,000 in emergency cash into the hands of business owners within three days of application, though it has not been performing optimally, he said.
“ The roll-out of that program has been more challenging,” Vela said.
EIDL assistance consists of low-interest loans up to $2 million loans, with the first payment deferred for 12 months, though the program was designed for localized disasters such as hurricanes, not a nationwide economic catastrophe, and is being overwhelmed. In response to a caller asking when business owners who have applied for loans or advances might hear back from SBA, Vela said he didn’t have an answer.
“ With the $10,000 loan, you’re probably the 40th or 50th small business owner I’ve been in contact with that has raised that issue, he said. “It’s extremely frustrating. I don’t know when we can expect that payment.”
Vela said there is also “a ways to go” with the EIDL program, and has told House Speaker Nancy Pelosi about the issue and believes “out of the box” thinking is required.
“ Hopefully we’re going to put more funding in that pot of money,” he said.
Angela Burton, director of SBA’s Rio Grande Valley District Office, said SBA staff appear to be operating at maximum capacity to process the unending avalanche of loan applications.
“ It’s my understanding that they’re working the loans 24/7, as fast as they can,” she said. “And I do know that they’ve contracted other folks, outside vendors, to support the initiative.”