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IOPFDA Urges Congressional Passage or ERTC Reinstatement Act |
By: Paul A. Miller, Legislative Counsel If you believe some, the economy is humming along, and the effects of COVID-19 and lockdowns are a thing of the past. That is of course, if you listen and believe what’s coming out of Washington today. The reality is this is the farthest from the truth. Yes, we did see an uptick in the economy (for some). However, the road to recovery still continues for a lot of small businesses. That road to recovery we have heard so much about has become even harder when Congress and the President make promises to us and then pull that money and pump it into another of their vote getting projects. That’s exactly what happened with the Employee Retention Tax Credit (ERTC). I think when Washington talks recovery, they see the numbers the Fortune 500 companies are posting, and positive profits means everyone is doing equally well. The reality is small businesses continue to struggle. From 2020 to 2021, Congress pumped over $10 trillion into the economy. Some of that money was earmarked for small businesses. That was great at the time, but as the pandemic went on, small businesses proposed more beneficial and fiscally responsible programs that were dismissed. Programs like the Paycheck Protection Program (PPP) was flawed and riddled with abuse. We saw people getting “free” money dedicated for small businesses, who turned around and bought expensive cars or plastic surgery for their wives. The other challenges were the rules. Congress put a lot of limitations on how these funds could be spent. My business needs may be different than yours and Congress missed that. It’s like asking someone to pound a square peg into a round hole – it just doesn’t work. We are grateful that Congress acted when the pandemic hit, but now more than two years after the start of the pandemic, small business continue to struggle and that struggle becomes even harder when gas has hit $5 a gallon or higher. Its hard when inflation continues to rise to an all-time high (8.6% today). Now factor in our continued struggles with getting workers. Now factor in people demanding higher wages than we can support. This includes the amount of time we have to recruit new employees, only to have them go through the process and then not show up for the job. All in an effort to keep collecting those free federal benefits. Finally, take into account all the red tape COVID cause for us and its easy for everyone outside Washington to see how we are still struggling. One thing small businesses desperately needed in 2021 was the passage of legislation that offered employers a tax credit to keep people employed. With unemployment hitting 10% or more during the height of the pandemic, Congress created the ERTC to help stem the unemployment numbers. Who did they look to for that help? Small businesses of course. Keeping people employed was mutually beneficial to us as well. If we are being honest, keeping people employed was a bigger help to Congress than it was to our businesses. The ERTC helped stop the unemployment bleeding. Small businesses designed their short-term strategy around the ERTC. This helped small businesses focus on other areas of recovery for their business. That all changed when Congress needed money for its infrastructure proposal. There isn’t much bi-partisanship in Washington today, so when they see an opportunity and need, they jump on it. In part for the good of the country, but more for their own political survival. I know this sounds cynical, but what would you call it when Congress appropriates money to small businesses to help them, which they turn around and tout as saving small businesses (which they know will get them votes) only to have that money taken from you to fund another pet project? The ERTC was a real lifeline to a lot of small businesses. The ERTC meant on average $33,000 per employee if an employer kept them in their job. That was a real savings to small businesses who saw their pipeline of business dry-up. Small businesses needed to keep their employees in order to help rebuild. No employees meant shuttering your doors at the time. This is why IOPFDA continues to lead the fight to reinstating the ERTC. We believe eh ERTC needs to continue through 2023, but our first fight is to get the fourth quarter of 2021 paid. This is money Congress promised us and the President signed into law. Both broke that promise to satisfy their own agendas. IOPFDA is working closely with allies like Rep. Carol Miller (R-WV) and small business owner herself on making sure her legislation H.R. 6161, the Employee Retention Tax Credit Reinstatement Act becomes law this year. IOPFDA is also working with Sen. Maggie Hasan (D-NH) on a Senate companion S. 3525, the Employee Retention Tax Credit Reinstatement Act. We have a long way to go to get this legislation to the President’ desk for a second time, but we are doing everything we can to make that happen. This is an election year so when your Members of Congress ask for your vote, let them know that votes are earned and restoring the ERTC helps them earn your vote. |