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Wednesday, May 26, 2021

Senator aims to identify fiscally responsible solutions to strengthen America’s future pandemic response WASHINGTON – Arizona senior Senator Kyrsten Sinema unveiled her bipartisan pandemic risk working group during a Senate Banking Committee hearing and examined ways to ensure the United States economy is prepared to respond to a future pandemic. “We need a solution on pandemic risk because small businesses and major employers in Arizona and around the country deserve certainty and stability. Families deserve peace of mind knowing that their jobs are secure,” said Sinema, a member of the Senate Banking, Housing, and Urban Affairs Committee. Sinema’s bipartisan pandemic risk working group focuses on identifying fiscally responsible solutions to provide businesses the financial certainty they need in the event of a pandemic. Sinema also highlighted that some Arizona businesses couldn’t access the relief they needed during the crisis, resulting in closures and failures. Bankruptcies and defaults during the pandemic threatened nearly $2 trillion in commercial real estate loans held largely by big banks, which forced some banks to set aside capital to cover potential loan losses, and tightened credit when businesses needed it the most. Sinema suggested that government and the private sector could partner to create a risk-sharing mechanism that would ensure businesses are covered in the event of a pandemic, all while making our financial system safer and ensuring Arizona small businesses can access the credit they need to create jobs. In late March, Sinema hosted a roundtable with Arizona small businesses on accessing pandemic relief. In this year’s covid-relief law, Sinema successfully secured her bipartisan Restaurant Rescue Plan, which established a $28.6 billion relief fund for local and independent restaurants to keep Arizonans employed. She also secured an extension of the Employee Retention Tax Credit to help workers stay connected to the workforce and help more small businesses and nonprofits across the country. December’s coronavirus-relief package provided $325 billion for small businesses – which included provisions for very small businesses: $20 billion for new Economic Injury Disaster Loan Grants for businesses in low-income communities, $3.5 billion for SBA debt relief, $15 billion for grants for shuttered venue operators, and $2 billion for enhanced SBA lending.

On March 24, Charles Landgraf, outside counsel for the Business Continuity Coalition (BCC) presented remarks at a conference sponsored by the Organisation for Economic Co-operation and Development (OECD) regarding business risks posed by pandemics. Landgraf provided comments in support of the BCC’s proposal for a U.S. public-private insurance program so that all stakeholders would share in the financial risk of losses for pandemics and other government-mandated shutdowns of the economy. A link to the session that included Landgraf’s participation can be found here.

On Dec. 15, the Senate Commerce Subcommittee on Manufacturing, Trade and Consumer Protection, held a hearing entitled, “Examining the Impact of COVID-19 on the Live Entertainment Industry.” The hearing discussed the pandemic’s impact on the live event entertainment industry and the challenges faced by artists and venues, as well as supporting industries such as lighting and transportation. Legislative proposals on how best to provide relief to the industry and these specific sectors were mentioned by senators and the four witnesses representing the different sectors.

The Business Continuity Coalition (BCC) submitted a statement to be inserted in the hearing record recommending that a public/private insurance program be developed to address the insurance needs of all impacted lines of insurance, including event cancellation, which is key to the live entertainment industry. The BCC statement highlights the magnitude of the shortcomings in our country’s preparedness for, and resilience to, catastrophic events of the scale and nature of the COVID-19 pandemic crisis, and suggests this coverage gap in insurance for losses from business interruption be addressed through a federal initiative in order to promote the economy’s recovery. This is especially true for the entertainment industry, including live performance and broadcast, where private insurance alone cannot and will not remedy the current gaps.

In its prepared statement to the Senate Commerce Subcommittee, the BCC advocates for a federally-backstopped availability mechanism similar to the highly successful one which Congress put in place to provide compensation after terrorism attacks nearly two decades ago. Such a mechanism, in the event of a government-declared pandemic health emergency, would enable employers to keep payrolls and supply chains intact, help limit job losses and furloughs, reduce stress on the financial system, and speed economic recovery when government-imposed limitations on business operations are lifted.

The BCC represents a broad range of business insurance policyholders – large and small – from across the American economy, employing more than 60 million workers. The coalition’s members will continue to advocate for a public/private insurance program to limit future economic damage from pandemics that cause business interruptions.

Download a copy of the full BCC statement below.

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