Sen. David Perdue, Senate Armed Services Committee hearing

Sen. David Perdue, R-Ga., asks questions during the Senate Armed Services Committee hearing on the Department of Defense Spectrum Policy and the Impact of the Federal Communications Commission’s Ligado Decision on National Security during the COVID-19 coronavirus pandemic on Capitol Hill in Washington, on Wednesday, May 6, 2020.

Georgia’s senior U.S. senator, Republican David Perdue, sits on the Senate committees on armed services; banking, housing and urban affairs; foreign relations; and the budget. He is also a member of a congressional task force convened by President Donald Trump in April with the purpose of helping the president re-open the economy. On Wednesday, Perdue joined the MDJ on a conference call to discuss the federal government’s response to the coronavirus. This interview has been lightly edited for length and clarity.

Q: The Senate and senatorial staffs went back to work Monday in Washington, while the rest of D.C. and much of the nation remained on lockdown. So I’d like you to address two issues. One is: are you concerned personally in the risk of catching the virus and are you taking any special precautions? Do you, for instance, wear a mask in the Senate chamber? And also, do you feel it’s necessary for the Senate to convene in person or can business be held remotely (as in) most of corporate America? What are the advantages of being present in the Capitol?

A: Let me first put a little perspective on that. You know, during the shelter-in-place guidelines that have been in place for the last several weeks, our staff and most staffs in the Senate have been fully functional. You know, we work from home. We’ve reached out to — I’ve done these constituent conference calls, several a week at night. We’ve touched over half a million Georgians with that, listening to their needs, trying to help people get connected to resources, give them the 800 numbers that are applicable and the websites (and a) a resource page on our webpage to help people find help. So we’ve been fully functional. About a week ago, Sen. McConnell, the leader of the Republican majority, called us back in. We’re back in Washington today. We had our first hearing yesterday. It was spaced out in a way that is consistent with the social distancing requirements. We limited participation of visitors in the Senate office building. We all wore masks. We actually had a meeting before then (and) we had masks. And we have hand sanitizers, signs everywhere about washing hands and maintaining social distance. I think it’s very important that America sees that, that we are functioning, and that this is an essential part of life, that we work together. Now, most all Democrats did not attend that banking committee meeting yesterday, but we afforded them the opportunity to participate remotely, and it worked fine. So individuals made their own choices about participating. And that’s the way we’re going to set it up.

This, the differences are it’s a new protocol here, obviously, and this is going to be with us for a while. So I think this applies to all of America as we come into this transition phase where we’re still fighting the virus, and yet we’re trying to get our economy going again. So these new protocols are new; I’m not concerned at all. I’m doing the precautionary things that someone my age should do. And I’m being very careful. I want to protect the people around me. So I’m watching my symptoms and so forth, making sure I don’t have a fever. And I don’t want that. So I feel like we’re doing the right thing by coming back and doing the people’s business.

So we interviewed the Inspector General yesterday or did a hearing on his confirmation for the CARES Act, which is a big part of what we’ve just done. So there’s some very important things that we’ve got to get done. We’ve got to get the Defense Authorization Act done. That’s very important to Cobb County, as you well know, with Dobbins and the rest of the state. We’ve got to get our funding started for the budget. And then all the nominations. We still have a lot of judges that are waiting to be confirmed. So there’s a lot of business that can be done. We’re doing the best we can right now, given the shelter orders that we have in D.C., but so far, it’s functioning very well.

Q: Senator, speaking of business, you just introduced the Health Care Workforce Resilience Act along with two Democrat colleagues and one Republican colleague. What’s the goal of this bill? And how does it work?

A: Well, one of the things that showed up in this crisis is that, because of our intransigence over the last decade, really, with some bills out of Washington, we’ve lost a lot of doctors and a lot of nurses who have a hard time practicing the profession inside ... a lot of the rules and so we have an acute shortage in this crisis of nurses, primarily, and doctors on the front line. ... It’s a very simple bill, it basically makes it a little easier — and we use past, opening numbers or past vacancies that were not used and let them roll forward into this year so that we can recruit front line nurses and doctors to help us, particularly in our rural hospitals, this is where the acute need showed up. And that’s all it does is it helps us to recruit from around the world doctors and nurses to help us in this acute crisis.

Q: And now, moving onto the CARES Act stimulus: Some of the small business loan money available through the Paycheck Protection Program went to companies that weren’t really small businesses. Ruth’s Chris Steakhouse and the Los Angeles Lakers come to mind. Many of them offered to return the funds, but others are concerned that some companies won’t. What has Congress done to address these issues?

A: Let me put it in perspective. In the first tranche of the CARES Act, there was $349 billion that focused on small businesses. And prior to that, there were only 800 approved (Small Business Administration) banks in the country. Only 800. Within a few days of opening up that CARES Act program, it’s called the Paycheck Protection Program, 5,000 banks got approved. Most of these were small community banks. And remember, we passed a Dodd-Frank revision bill back in ‘18. It was a bipartisan bill to pull back on the most onerous parts of Dodd-Frank that had killed 4,000 community banks. And because of that act in ‘18, these small banks were able then to participate. So 5,000 banks made 1.6 million loans. And 88% of those loans were $350,000 or less. And here’s the punchline: 99.8% went to companies that truly were, by any definition, below 500 employees.

The confusion came in with an exemption that was given to some restaurant chains and some hotel chains because they were owned by franchisees and we wanted to get the money to the franchisee, which by definition is a small business. What some companies did is they took (the loan) at the central level in addition and that was never intended. So the Secretary of Treasury put a new guideline out that said, “That’s not OK.” That money is coming back and most of the money has come back in. But remember that less than two tenths of 1% of the money that was allocated was in that controversial area. 99.8% of that first tranche went to people that we wanted.

And 88% of the loans were $350,000 or less. Actually, in the second tranche which was $310 billion, 96% of all the loans are ... $350,000 or less. These are really small loans, small business loans. And that was the intent of the bill.

Q: Similarly, some individuals who continue to work and have not lost wages received their $1,200 stimulus payment. Was that necessary and can you explain how that helps our nation?

A: I personally opposed it, but that’s a controversial position too. I felt like the No. 1 objective we had was to keep the relationship between the employer and the employee. The other side, as part of the negotiation, said no, in addition we need a stimulus package to help these people keep consuming, etc., etc. We know from the ‘08 and ‘09 crisis that that was less than effective. ... Now, there are a lot of people who can use that — they’ve lost their job, their unemployment, etc., etc.

What we’re trying to find now is a lot of people that have gotten these loans, these small business loans are now calling their people back to work. And that’s an encouraging sign. One of the toughest things we have to do now is restart this economy. We have shut down the economy for the most part except for essential services in the military. And so now in restarting it, we are, we’re about to enter a transition phase. The first phase of this virus was all mobilization. It was the public health officials, leading us into sheltering in place and shutting the economy down, doing things to protect ourselves, particularly the most vulnerable, which we now know who they are. And then we’ve done that, we’ve reached the peak in most states, and it’s beginning (that) the number of active cases should begin to decline. And now we’re going to enter in a transition phase where while we’re still fighting the virus, we need to reopen the economy.

The president has a three-phase plan that does that gradually. And I think very prudently, I think the time is now to begin to start doing it. I know there’s a controversy around that. But as a business guy, I’m looking at examples of people who have already done that. Our essential workers and our military have changed their protocols and their practices, and they’ve been open and operating with no different actual infection experience, that I can tell, than those of us that have been sheltering in place. The third phase then is recovery phase and that’s where we reflect back on what we did right and wrong. We know that we did not have a big enough strategic stockpile of protective equipment and testing capability. We put $16 billion in to rebuild that strategic fund. We put $25 billion more in immediately for more testing. And so we’ve got in there some encouraging developments right now about testing, we got a report yesterday. So I believe that the first thing we’ve got to do is get this economy going again, while still protecting the most vulnerable.

Q: Congress passed the $2.2 trillion dollar CARES Act at the end of March. One of the county lobbyists here said he expects Congress to pass two additional stimulus bills before the end of the summer. Can you confirm that? Where are we at on there being an additional federal stimulus on the horizon? If that’s the case, what will that look like?

A: That’s to be determined, frankly, but let everybody know that we’ve had four big steps so far. The first — and these are all relief acts. What we’ve done so far, except for maybe the direct payment, most of this is relief going toward trying to protect the employee, the worker. And so the first thing we did was immediately get $8 billion out for more testing and more protective equipment.

Second was for families, extended leave and more unemployment protection. The third phase with the CARES Act, the $2.2 trillion you just mentioned, with most of that money going toward small and mid-sized businesses and states and ... hospitals. And then the fourth was the supplementary to the CARES Act, which was $484 billion. So, all in, its $2.9 trillion that we have put forward in a relief package — in four relief packages, to try to help the economy.

Now obviously, there are some holes, there are some missteps that we saw in here that we have moved with guidelines from the Treasury and so forth. If the current $310 billion — which is part of the $484 (billion) — the $310 (billion) supplemental for the Paycheck Protection Program for the smallest businesses, there’s some talk about that needs to be plussed up a little bit. The states are now asking for more help. There’s a question about liability protection. We already have 770 class action suits toward mostly health care providers in this crisis, if you can believe it. ... There’s a cry out for more help for states. ... So (money) for small businesses, (for) state(s), and then (for) the liability protection will be the three areas that get discussed most immediately.

Q: Senator, at the end of all of this, when we’re through the pandemic, get back on more stable financial footing, we’ll be looking at a much larger national debt. How do you find the balance between helping with stimulus and relief, but not creating a devastating U.S. deficit?

A: Well, we walked into this crisis with a devastating U.S. deficit. You guys know that my very first interview with anybody was the Marietta Daily Journal back in 2013. And the reason I ran was partly because of the national debt crisis, and it continues to soar primarily because of our mandatory expenses. So we went into this crisis with very little reserves, high debt, and we’ve added $2.9 trillion in here, about a trillion of that will get paid back. But still, we’ve added dramatically to the debt. And here’s the problem. We’re losing the right to do the right thing. ... We passed $2.9 trillion to help bridge this gap. We’d never shut the economy down in America. This is unprecedented territory. And so I held my nose, a lot of people did, but we wanted to get help for the individual workers that were being displaced. And we’ve done that.

Now it’s time for all of us, I mean, all of us, not just elected officials, but the media, the people in the state government, people and municipality, all of us individual consumers — we all have got to realize that we’ve been living beyond our means. We spend $5 trillion a year in the federal government. $1.3 (trillion) of that is discretionary. That’s the military, the VA and all domestic programs and (agriculture), education, labor — all of the domestic programs is $1.3 trillion. The other $3.7 trillion is Social Security, Medicare, Medicaid, pension benefits for federal employees and interest on the debt. The problem is, that’s the part that’s growing — our discretionary spending is actually less now than it was in 2011 as a percentage of the economy. So the realization that we have to come to after this crisis is over, is a wake-up call that we have got to become more diligent in becoming responsible fiscally, or the next time we have a crisis, we may not be able to go to the well and draw down $2.9 trillion of debt. So this is a real problem.

In addition to that, we don’t have time today to get into all the real red flags here. But the Federal Reserve increased its balance sheet from $4 trillion. They made four decisions in March that will take their balance sheet to $13.5 trillion, and that’s before any impact of the CARES Act. So this is unprecedented territory, how America has finally got to get to the point where we are now out of time. This is the crisis that everybody talks about financially, I’m not talking about the virus, I’m talking about the financial crisis. Because we are lost, we are losing the ability to just print money and borrow money to solve any problems. So we’re losing the right to do the right thing. So I believe that we can fix this. I know we can. Growing in the economy was one way, we had that going until the virus, we’ll get that going again. But we got to save Social Security and Medicare, the Medicare trust fund goes to zero in five and a half years, the Social Security trust fund goes to zero in 12 years. So there’s a long conversation, but we as America have to wake up to this fiscal catastrophe that is our national debt.

Q: You serve on President Trump’s coronavirus task force. ... (Describe) how many meetings, what role you play, who you’re talking with etc?

A: Today, what this task force is doing is trying to break through some of the regulatory constraints about companies working together on developing a vaccine and treatment. I’m also on this task force to get the economy open again. And so what we’re doing is trying to advise the president and his advisers and the Secretary of Treasury and commerce, about the best ways to go about doing it. The product that has been produced so far is the three-phased approach. I support that. I think there are things that we can do now. The states have the ultimate final say. But this is a federal guideline that hopefully will coordinate as we begin to open the economy. But I will say this, it’s going to be a rocky two months. Any time you shut a free market system down like ours ... we don’t know how fast demand comes back in certain sectors and how the changing protocols will affect productivity in certain categories of business. ... This task force will continue working with regard to trying to do the right things in terms of opening the economy while we protect human life. It’s a balance there’s human cost to the virus. We all can see that. There’s also a human cost of shutting the economy down and the president’s trying desperately to find that balance and we’re trying to help him do that.

Q: Who would you like to see as the junior Republican senator from Georgia?

A: Well, we have one right now. Kelly Loeffler has been appointed and was sworn in. ... There’s an active race in November. It’s a jungle general election. There are a number of Republican candidates, a number of Democratic candidates. I’ll just say this. Any of the two leading Republican candidates right now would be a better U.S. senator than any of the Democrats that I’ve seen in the list so far. I think there are 21 total candidates in that race. In a jungle general election it’s very confused, right? But given the socialist agenda that I see the Democrats really espousing now not just at the presidential level, but even at the state level, either one of these two leading Republican candidates would be better than anybody I’ve seen on the Democratic ticket.

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