The COVID-19 pandemic continues to impact the economy in a variety of ways, including elevated unemployment claims and heightened risk of closure for nonprofits, but small businesses have been unlikely to establish testing or vaccination rules for employees. The American Rescue Plan gets trimmed down, and Connecticut legislators are preparing for how to use relief funds the state will receive if the measure passes. In other news, President Joe Biden has picked a nominee for a key SBA position and a Government Accountability Office report calls for better management of emergency loan programs.
National
The Biden administration has reached a deal with moderate Democrats to limit eligibility for direct payments in a $1.9 trillion American Rescue Plan that has passed the House and will go before the Senate. The agreement begins phasing out eligibility for individuals who earn $75,000 and married couples filing jointly who earn $150,000, and excludes any individual earning $80,000 or more and married couples earning $160,000 or more.
Weekly jobless claims rose to 745,000 last week, an increase of 9,000 from the previous week but a lower level than anticipated. Continuing claims fell for the seventh week, and approximately 18 million people were receiving benefits under state or federal programs.
The Government Accountability Office is warning that emergency loan programs such as the Paycheck Protection Program are considered to be a high risk for fraud, waste, or mismanagement. The office says the programs were set up quickly with limited safeguards, and that better management is needed to prevent abuse.
President Joe Biden has announced Dilawar Syed, the CEO of the artificial intelligence health care company Lumiata, as his pick for deputy administrator of the U.S. Small Business Administration. Biden’s nominee for SBA administrator, Isabel Guzman, has been endorsed by a Senate committee but a confirmation vote before the full Senate has not yet been held.
Business trends
Most small businesses are not requiring their employees to test negative for COVID-19 or mandating that they receive a vaccine before returning to work, according to U.S. Census Bureau data. The health care and food service sectors were more likely to have these requirements in place.
Thirty-eight percent of nonprofit organizations are at risk of closing within two years due to the financial impact of the COVID-19 pandemic, according to findings from the research group Candid and the Center for Disaster Philanthropy. The study found that arts and entertainment nonprofits face the greatest challenges, and that the risk could be mitigated if donations increase significantly.
Connecticut
Connecticut legislators are preparing to decide how to distribute $4.2 billion in economic relief expected from the federal government under the American Rescue Plan. Potential actions could include support for the state’s nonprofits, health care improvements, and bolstered social services.
