The Biden Administration will prioritize going after criminals that have allegedly stolen billions in COVID relief funds that were meant for both small businesses and individual Americans in COVID-era programs like the Paycheck Protection Program and Unemployment Insurance program, Biden said during the State of the Union address on Tuesday night.
“In my administration, the watchdogs have been welcomed back,” Biden said. “We’re going after the criminals who stole billions in relief money meant for small businesses and millions of Americans.”
Biden also announced that he will be naming a chief prosecutor to the Justice Department to uncover pandemic-era fraud such as “those committing large-scale identity theft, including foreign-based actors,” a White House press statement said.
The Justice Department will now have “heightened resources” to “enact enhanced penalties” to those that fraudulently stole Paycheck Protection Program loans and unemployment insurance benefits. According to the White House, the FTC reported a 3,000% increase in reports of identity theft for public benefits in 2019 and 2020. The Justice Department concurrently announced the arrest of the CEO of PPP loan lender MBE Capital for fraudulently issuing loans as a non-bank lender, securing $70 million in lender fees.
Besides addressing pandemic relief fraud, here are the other business-related issues the President addressed in his State of the Union speech:
More union protections
In a brief mention during the speech, Biden asked Congress to “pass the PRO Act. When a majority of workers want to form a union—they shouldn’t be stopped.” The Protecting the Right to Organize Act would introduce penalties to corporations that “violate workers’ rights,” expand bargaining rights and close loopholes that companies have used in the past to get around union laws, as well as “strengthen workers’ access to fair union elections.”
This is an especially timely issue as multiple companies, particularly Starbucks, have been in the news for clashing with workers before, during and after unionization elections. Starbucks union SBWorkers United claims that its parent company is engaging in “union-busting activities” such as requesting to delay elections or temporarily closing affected stores, though thus far, there has been no penalty against the company for these actions. Corporations would be held to more scrutiny if the PRO Act were to pass.
Corporations should lower costs, not wages
Although the $15 minimum wage is no longer being mentioned as a key goal for the Biden Administration after a defeat in Congress last year, Biden did ask corporations to look toward other strategies for lowering costs instead of pushing down wages. Biden suggested relying on American supply chains instead of buying foreign goods as a start.
“Tonight, I’m announcing a crackdown on these companies overcharging American businesses and consumers,” he said.
Corporations should pay a 15% minimum tax rate
Biden also suggested that while he is “not punishing” corporations, he wants them to pay their fair share and not easily get out of taxes (or hiring American workers in need) by shipping work overseas.
“That’s why I’ve proposed a 15% minimum tax rate for corporations,” he said. “We got more than 130 countries to agree on a global minimum tax rate so companies can’t get out of paying their taxes at home by shipping jobs and factories overseas.”
Inflation will be addressed
While the State of the Union did not specifically address solutions for rampant inflation, the President did promise to make it a primary focus, saying his “top priority is getting prices under control.”
Restaurant relief still up in the air
During the State of the Union, however, President Biden did not address further relief for small businesses, specifically restaurants, as the fight for another round of restaurant relief continues. The Independent Restaurant Coalition spearheaded an effort to get 10,700 signatures of restaurant operators to send to President Biden’s desk on Tuesday in order to put the wheels of relief in motion:
“The state of the union is not strong when neighborhood restaurants and bars are ready to close permanently,” Erika Polmar, executive director of the IRC said in a statement.
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