The February 14th Hagedorn Report is meant to be a blast at Democrats … but upon closer review, the complaints began under the Trump Administration.
Congressman Hagedorn presents a passionate plea of his efforts within the Small Business Committee to “enable farmers and ranchers to report either gross or net income for the purposes of calculating their maximum Paycheck Protection Program loan amount. Currently, the U.S. Small Business Administration only allows for net income to be considered.”
Of course, what Congressman Hagedorn fails to acknowledge is that the decision to use “gross income” for considering PPP loans was done by the Trump Administration. He also fails to acknowledge that this was well known and prompted complaints from Republican Senator John Thune and Democrat Senator Tammi Baldwin who offered S.3918 – Paycheck Protection for Producers Act last year … but Mitch McConnell failed to act on it.
Under the Trump Administration’s SBA, farmers’ participation in the PPP is based on 2019 net farm profits (or losses), which are reported on Line 34 of IRS form Schedule F. The impacts from Trump disastrous trade war resulted in many farmers reporting net farm losses in 2019, making them effectively ineligible to receive a loan from the PPP, (actually more like a zero-dollar loan). This particularly hit individual farmers hard – corporate farming operations will still be able to apply for a PPP loan based on any employee payroll costs while self-employed operators will not be able to access the PPP to pay themselves if they do not show a net farm profit in 2019.
So, the Trump tariffs combined with the Trump Administration determination on how to implement the PPP program hit family farms hard … yet all that is ignored as Congressman Hagedorn blames the Democrats.
During the previous week’s Small Business Committee hearing on COVID-19 Pandemic and Small Businesses (February 4), Congressman Hagedorn used his time to blast “Governor Tim Walz has held emergency powers and made all sorts of arbitary decrees, in so doing, his central government planning has impacted our small business”. In his rambling questions, Congressman Hagedorn asserted that “small business does not have enough labor” because people are moving to South Dakota, Iowa and Wisconsin … and expressed a concern that people are being denied the ability to pack the Madelia movie theater at full capacity as Governor Walz has limited the the 294 seat theater to 25% capacity.
Blame Walz, blame Democrats, that’s what Congressman Hagedorn does as he complains that “Democrats are playing partisan politics“.
So what was the reasons that Members stated in opposition to the Hagedorn amendment ? It was not germane … meaning that the Small Business committee is not designed to set tax policy … that is the responsibility of the Ways and Means Committee. There are tax considerations that are different depending upon whether the business entity made a decision to operate as a self-employed operator and as a corporation. If the Small Business committee inserted into the bill, it would likely be stripped out in the final version.
Hmmm … a common complaint is that Congress must embrace “regular order” … ya know, the correct committee processing legislation and moving it forward. So why hasn’t Congressman Hagedorn offered Paycheck Protection for Producers Act of 2021 in this session ?
In the end, the Committee in a roll call vote rejected Congressman Hagedorn’s amendment 14-9 (note there are 11 Republicans assigned to the committee). The proposal will move forward … yet, the other question is, “Would Congressman Hagedorn had voted YES if his amendment was included ?”
Not likely, ’cause the bill has so many other “problems” that Congressman Hagedorn cited in his “Democrats are playing politics” meme.
Like, the “Democrats refused oversight over the Biden small business administration” … which might be Minnesota’s Eighth District Congressman Pete Stauber’s amendment requiring a “report” within 120 days on any “Federal requirement relating to COVID–19 that would restrict or otherwise prevent such a concern from operating at normal capacity” … that seems like an extremely broad bureaucratic report that no one will read.
Congressman Hagedorn says the Democrats “neglected to increase crucial support for our local restaurants” ignoring that the bill establishes a $25 billion grant program for independent restaurants. Further, eleven food / beverage organizations led by the National Restaurants Association and The Independent Restaurant Coalition wrote to Congressional leaders in support of industry recovery provisions in reconciliation package :
We urge Congress to pass the $25 billion restaurant grant program contained in the small business title as part of budget reconciliation. This plan is a good first step to help restaurants, bars, and tasting rooms maintain payroll, weather the pandemic, and pay down debts. The proposal recognizes the unique business models of restaurants and bars, which operate on very low profit margins. For instance, the proposal allows businesses touse grants on expenses incurred between February 2020, and the end of 2021, giving restaurants and bars the flexibility they need to manage changing demand or new regulations that may come from a surging virus.It also sets aside $5 billion specifically for small restaurants, bars, and tasting rooms, making less than $500,000 in gross receipts in 2019. And prioritizes the award of grants to eligible entities that are owned by women or Veterans or are socially and economically disadvantaged businesses.”
Another concern that Congressman Hagedorn warned his constituents of is that the Democrats rejected the plea to automatically deny “direct PPP funds to individuals convicted of nonconsensual sexual felonies, …” …. hmmm, OK, so what Congressman Hagedorn wants to ensure is that if you were convicted of a crime, did time, and then became a partner in a business that was eligible for a PPP loan, you should be denied. So, the fact that someone could have a long-term marriage, and operate a farm where one partner is a convicted felon, they should be denied participation in the program ?
Fun Fact : Did you know that Mike Lindell — the My Pillow Guy – who is considering a run for Minnesota Governor has been arrested three times, including suspicion of domestic assault and pleaded guilty to violating an order of protection, was granted a $75,000 contract by the Trump Administration to manufacture masks … even though Lindell had previously filed for bankruptcy.
In summary, anytime you get a Hagedorn Report, be sure to consider the Reagan Adage — “Trust but verify” except, with Congressman Hagedorn, it should be “Do NOT Trust until you verify'”