Reps. Kaptur & Ryan: Don't leave Small and Mid-Sized Manufacturers Out of Upcoming Relief Bill
Washington, D.C. – Today, Representatives Marcy Kaptur (D-OH) and Tim Ryan (D-OH), sent the following letter calling on the leaders of the House and Senate to consider robust economic relief for small and medium sized manufacturers in the next coronavirus relief bill. Manufacturing communities across the U.S., especially in Ohio and the industrial Midwest, have been hurting for decades. President Trump’s trade deals and tariffs have made a bad situation only worse, while the economic and public health crises caused by coronavirus could spell the end for countless small and medium sized manufacturers, which often serve as an anchor for communities across our region and country. Manufacturing cannot be left out when negotiating the next coronavirus relief package.
“I am pleased to join my dear friend and fellow Ohioan, Rep. Tim Ryan in calling on robust assistance for small and mid-sized manufacturers in the upcoming COVID-19 economic relief package, which is currently being negotiated,” said Rep. Kaptur. “This sector is the backbone of the middle-class in our region, contributing $2.36 trillion to U.S. GDP just in the first quarter of 2020. Tragically, due to the public health and economic crisis resulting from COVID-19, too many small and mid-sized manufacturers have declared bankruptcy despite previous strong performance. That is why I am committed to fight for all working families to ensure that no one gets left behind. These manufacturers and their workers need relief now.”
“As someone who grew up in Northeast Ohio and the Co-Chair of the House Manufacturing Caucus, I have seen firsthand how manufacturing is the back-bone of the American economy,” said Rep. Ryan. “Unfortunately due to the economic pain caused by COVID-19, the future of many of our small to mid-sized manufacturers hangs in the balance. In the next relief package, Congress must step up and provide the support our manufacturing sector needs to make it through this crisis.”
The letter can be found below and online here:
Dear Speaker Pelosi, Majority Leader McConnell, Minority Leader McCarthy, and Minority Leader Schumer:
We write to highlight the critical need for assistance to mid-sized manufacturers in upcoming COVID-19 relief legislation, through means to address the question of solvency timelines as well as provide a direct lending opportunity to rapidly and appropriately assist this population.
As you know, small to medium sized manufacturers are the backbone of the U.S. economy and the middle class. According to the National Association of Manufacturers, American manufacturing contributed $2.362 trillion to the U.S. economy in the first quarter of fiscal year 2020. For every $1.00 spent in manufacturing, another $2.74 is added to the economy. But this pandemic has inflicted serious economic crisis on these mid-sized businesses at the same time it highlighted vulnerabilities of America’s overreliance on global supply chains and the necessity of a robust domestic manufacturing base.
Medium-sized manufacturers too often lack the capacity typical of large companies to weather the whims of the free market in normal times. The onset of the COVID-19 economic crisis was but another attack on an already economically vulnerable sector. To make matters worse though, while small business manufacturers could seek refuge through the Paycheck Protection Program and larger firms relied on preexisting relationships with financing institutions with the means to help them weather the storm, many medium sized firms lacked these resources necessary to fend off economic crisis. To make matters worse, the Federal Reserve’s Main Street Lending Facility took months to stand-up. As many mid-sized businesses took drastic measures to fend off bankruptcy, time was of the essence in March, April, then May, even June before the Main Street Lending Facility was up-and running. This was woefully inadequate. Delay forced many to make the hard decision to file for bankruptcy to slow the hemorrhages, grant restructuring, and ultimately save American jobs.
As currently stands, the Treasury Department and Federal Reserve are precluded from assisting firms that declared bankruptcy. However, the injustice of this fact is their delayed action resulted in more bankruptcy filings. Congress has the means to set appropriate parameters for waivers in instances where firms, particularly mid-sized manufacturing businesses, were financially healthy pre-COVID, and but-for the pandemic, were set to have a healthy financial year. We implore the next COVID package to address this injustice. Additionally, we respectfully request the creation of a lending window to assist medium-sized manufacturers through an adequately scaled rescue fund.
These actions would go a long way to save good American jobs and ensure global economic competitiveness of our domestic manufacturing base. Thank you for your consideration.