Senator Lisa Murkowski on fisheries, tourism and AK economy in response to COVID-19

Apr 30, 2020

Credit Office of Senator Lisa Murkowski

KBBI's Kathleen Gustafson sat down with Senator Lisa Murkowski on Wednesday afternoon to talk about federal response to COVID-19.
Click on the arrow to hear the entire interview.

Transcript

Kathleen Gustafson, KBBI:
What I have done is contact the City of Homer and asked them if there were questions that they would like addressed or issues they would like to hear about and also I contacted our sister station up in Kenai, KDLL to see what they might like so I can share this interview with them as well.
 

Alaska’s United States Senator Lisa Murkowski:
Great. Greatly appreciated. Thank you.

KBBI: I've got about six questions or groups of questions, so I won't keep you long. I appreciate your time. First of all, when is Congress going back into session?
 

Senator Murkowski: The Senate will be in session this coming Monday, May the 4th. We're scheduled to vote on a nomination for an assistant secretary position and for the life of, man, my mind is going blank, but we're going in on the 4th. The House is not scheduled to come in next week. At this point in time, their return has not been publicly noted. It will be challenging because we're still expected to follow the protocols related to social distancing and that may be a challenge for us.

KBBI: Does that mean you'll be working in a mask?

Senator Murkowski: Well, I probably will be. What we do understand is that the guidance in terms of what will be required in the Capitol building and in the Senate office building, we’ll be provided that information tomorrow, hopefully, at the latest. Instructions on masks, how many people can be gathering in specific areas, access by the public, this is a brand new way of operation, at least for the time being.

KBBI: And this question comes from city hall. They want to hear from you about how seasonal businesses can now qualify for SBA loans. Because the rule was, at first they were excluded, but it's so important in Alaska that now seasonal businesses can apply for these loans.
 

Senator Murkowski: It is absolutely critical. We know that so many of our businesses around this State are seasonally operated, and so when the CARES act was initially passed to not have a recognition of the seasonality of a workforce was a very significant slot. So the delegation worked, really around the clock, to get Treasury to address this because what was happening was many Alaskan businesses were out of the opportunity to access the $349 billion fund. And with the replenishment of the fund going into place on Monday, we wanted to make sure that at least with a second round, those seasonal businesses would be accommodated.

So what we have done is to address the payroll period. That was the operative factor. So what happened was by a rule change that allows seasonal businesses to choose a different 12 week expense period, when they apply for the Paycheck Protection Program, the PPP, being able to do so in a period that more accurately reflects their operating payroll rather than being limited to that time constraint between March of this year and June. So what we have done is in this rule change, recognize that the seasonal businesses need to have flexibility to choose that 12 week period so it accurately reflects the payroll when they are in full operation, so to speak.

And so being able to calculate the businesses’ average monthly payroll costs, and then gain allowance to a greater access to the PPP loan itself. So it was a flaw, an oversight, one that we worked from day one to try to get addressed. It was unfortunate that it took an additional two weeks to do it, but that has been addressed. Another one that I think folks in the region would be interested in right now, if you are a crew on a fishing vessel, the owner of the boat identifies you on their 1099.

Under the way that the PPP is operating currently, the eligibility for the crew member and actually for the boat owner to be able to account for those folks on his payroll, the 1099 kicks them out. So we're trying to get further guidance and clarification so that individual crew members do not have to file their own application. So there's still some wrinkles that we're working with, with PPP and as we hear from folks about where those problems are, please contact us as soon as possible. We're working through them, again, around the clock, seasonal change, and that fix was pretty important, we're working on the 1099.
 

KBBI: On the subject of CARES appropriation, how much of the $300 million in CARES appropriation for fisheries disaster relief is likely to come to Alaska and how will that be divided up?
 

Senator Murkowski: Well, it's a great question. As you pointed out, there's $300 million in fisheries assistance. So what's happening now is NOAA is still developing this implementation plan for the distribution. The delegation teams have been communicating with Department of Commerce weighing in and getting our input there. The process has taken longer than we had hoped, but we're continuing to put pressure on NOAA and Commerce to get it done and get it moving. In terms of estimates as to what Alaska might receive, again, we're not sure. It is not unreasonable to expect that we should receive a fair amount of that fisheries assistance.

But keep in mind, these are funds that are shared throughout the fisheries around the country. I have reminded people who have said $300 million, it is to be shared around all the fisheries so it doesn't go a long ways. That may be true, but what we have done is we have established an authorization in place, which is significant, for fisheries disaster funding. So this is not like seeking a disaster declaration and then waiting two years to get the payout from those disaster funds. This is something that, again, like we have done with the PPP now two times, we would have an opportunity to replenish this fund.

KBBI: Are you saying that NOAA would be administering those funds and dividing them up?
 

Senator Murkowski: No, what you should be aware of, NOAA, is not the one that would implement that plan. What they're doing, their tasks as the oversight agency working with the Department of Commerce is again to develop the implementation plan for the distribution. So it's like what we're doing right now with DHHS. We just got off a call with a Health and Social Services Secretary earlier today, and through that Department, they are developing the distribution plan. For rural hospitals, you know, some of it's based on formula funding, some of it's based on population.

So that's what’s happening as we're trying to get these CARES funds out, is working through the departments, through the agencies to develop the distribution or the spend plan and do it quickly because everyone is looking for this assistance. But NOAA is not the one administering it, they're just working on the implementation guidance.
 

KBBI: If you can be any more specific, what can be done to facilitate Alaskans getting the Economic Injury Disaster Loans and the Paycheck Protection funds?
 

Senator Murkowski: Yeah. Well, the first thing we had to do was we needed to replenish both of those funds. So the PPP, an additional $310 billion, the Economic Injury Disaster, that was up by an additional $50 billion that leverages some $350 billion dollars in loan opportunities. I will be cautionary here though, on the EIDL, the PPP was back online on Monday and was, you know, just slammed in the opening hours as people were trying to get their applications in and lenders were trying to get in line there. But the EIDL program, that portal was not opened on Monday.

The Department had to do some reprogramming because with the supplemental to CARES, we allowed for an expansion to agriculture and by doing so, they needed to basically do some reprogramming. We were told that that EIDL portal was supposed to be up by today. Now, I haven't heard from anyone today to tell me whether or not that is online, but we had heard from Alaskans on Monday and then some yesterday saying, Hey, wait a minute, I thought you opened up the EIDL, and it's still telling me that they're not accepting applications.

It is just a timing issue. So do not give up on that. I know people are frustrated because, I mean, it's been hard to get through to SBA. It's been hard to get through to many of the agencies to try to get additional information. I hear from people that are trying to get through to the IRS to find where their direct assistance payments may be and have been frustrated with the systems. But I think what we're seeing is just such a crush as people are so anxious for the level of assistance, whether it's for their businesses or for their families individually.
 

KBBI: OK - Now, the only way Alaska can have much of a tourism charter fishing season this year is if the ban on interstate travel and 14 day quarantine requirements are relaxed. Any chance of testing capabilities ramping up to the point where that could happen safely?

Senator Murkowski: Well, I think it's fair to say that every effort within the State and certainly at the federal level is being made to get these tests up to us because, your statement is exactly right, the way that we're going to be able to get back to work and the way that people are going to feel safe to come to a place like Alaska, is if we have greater certainty as to the capabilities and the availability of testing, which will, as you point out, allow us to relax on the travel restrictions so the effort is considerable.

Alaska oftentimes is disadvantaged because we are a rural state that is kind of isolated. But in this instance, there's been some very specific attention paid just to those rural areas that are isolated, who, if they were to see an outbreak, it could be devastating. And we've seen history demonstrate that, just a hundred years ago and so making sure that we have the availability of testing is something that is aggressively being pursued.

In fairness, it's not quick enough. It's not quick enough for those small businesses that are suffering every day because it can't open up their shop on the Spit or their little restaurant or they're just not seeing that the revenues come into town that they had anticipated. The charter guys, everybody's canceling their trips and it can't come quick enough for anybody.

So I had a conversation and multiple conversations yesterday, I started off my day with an overview and a briefing from the Rockefeller Foundation on a national testing initiative, kind of an all team, all effort front and moved from there to a conversation with the head of the White House task force specific to testing. Admiral Giroir has been working very closely with Dr. Zink here in the State. I was very impressed in speaking with him. His level of engagement on Alaska specifically, and understanding the challenges that we're facing in rural Alaska.

And we're particularly, we have been talking in great detail about the impact to the fisheries. If we can't provide for, again, security to the communities, security to the industry that's trying to prosecute a fishery and security to the fishermen themselves, that we have a plan that will protect everyone engaged.

So we've got much, much more that we need to do, but it's a push at all levels to not only get more into production, but to make sure that we're not just limiting ourselves to one test here, that where we are looking to different applications as may be suited better in different areas or again, trying to get students back into school or frontline workers in a safe place at a clinic or folks that are working at a seafood processing facility.
 

KBBI: Okay. I've got three more questions, Senator McConnell has publicly suggested that states should choose bankruptcy or consider it as an option to their financial woes and given that the price of oil funds our budget, and North Slope Crude has been around $10 a barrel and far less lately, do you support the senator's bankruptcy suggestion for the State of Alaska?

Senator Murkowski: Absolutely not. Absolutely not. First of all, States can't declare bankruptcy. I think where the majority leader was going was, he's not supportive of, as he refers to it, bailing out States that have perhaps mismanaged their finances even prior to to coronavirus. 

You know, the situation that we're facing in Alaska right now, we have really all pillars of our economy just really devastated right now. You look at the tourist industry just brought to its knees. Seafood, fisheries, well, we are still optimistic because it hasn't yet started. There are some challenges that we've got to work through before you can safely prosecute those fisheries.

Oil and gas, as you have noted, not only is demand down, but, you've got so much supply out there that the producers are prorating up on the Slope coming down into Valdez because we're full up because the demand just isn't there. And that's what's happening in function and the price and then you throw in Saudi Arabia and Russia and all that comes with that. 

So, you look at the situation up north right now, and that is troubled. You throw in the fact that our state government effectively is being powered off of the revenues from oil that we invest in the market and the market's not thriving so well and you look at where we are in this situation and it is not a good place for us to be, but I think we also recognize that this is exactly why we are devoting such an extraordinary level of resource, not only to Alaska, but to states around the country.

$1.3 billion coming to the State of Alaska as part of this state stabilization, that is going to help and it's not just those monies, it's everything that we're seeing, specific and directed to the hospitals, on the education side, to individuals, to our fisheries, you think about the different avenues of funding that are being made available through, $8 billion set aside to our native people.

So there is a federal response that I think is appropriate given that we are looking at extraordinarily devastating economic impact brought about, not because of mismanagement, but brought about, because of a government decision to ensure that we were going to put the health and safety of people in this country ahead of all else, that we were going to take this head on.

And there are significant economic consequences and we're hearing from people all over but that's why we want to make sure that we're getting money out the door to help these small businesses to make it through this challenging, challenging time. Some are not going to make it, but what we need to do is we need to be there on the federal side to help.

I've heard from so many people who say, you know, I've been working my whole life, I built my business up, I've never asked for a government handout, and I don't even know what I should do? Who I should call? And what I've been saying is, this is not a government handout.

If you've been running your business, if you've been building this up for 30 years and you are told you can't operate tomorrow, not because you don't have employees, not because you don't want to, not because of mismanagement, but because the government has said for the safety of the people in your community, you can't operate, well that business is impacted by our decision.

And so government's response needs to be there to help assist and that's the role that we're playing right now. So just suggesting that the bankruptcy is the answer here is not the direction I'm taking.

KBBI: And do you think it's appropriate use of government funding to say, bail out oil companies?
 

Senator Murkowski: Well, again, when we say bail out, I think we need to be very, very careful because it's kind of an explosive term. I think what we have done is facilitate, through the Treasury Department, is to make available to those businesses, make available loans to them.

Now remember, these are loans, these are not grants. So it's the expectation that these come back to the government, they are repaid, they're repaid with interest. And so the opportunity for those in the oil and gas sector to take advantage of those same types of loans that a restaurant would be able to take advantage of, or a manufacturer would be able to take advantage of, this is designed to help address, again, that the economic impact is to all sectors of our economy.
 

KBBI: Okay. Thanks for making that distinction.
What can you do? You as our Senator from Alaska, what can you do to support the United States Postal Service and what will happen in Alaska if Congress allows the Postal Service to fold?

Senator Murkowski: Well, first of all, I don't think we should even be talking about allowing it to fail. We know that in our State, particularly in our more rural communities, our Post Office is it. It's what we rely on for mail and packages, medication, so making sure that we have reliable Postal Service has to be a priority. We all know that there's concerns about the Postal Service.

I have been involved in making sure that we can provide some support for the Postal Service by relieving them of the requirement to pre-fund retiree benefits. This is a significant part of what contributes to the Postal Service’s financial deficit. And it's just been eroding their stability.

The CARES act, we did provide $10 billion in additional borrowing authority. And so I know there's some talk right now, I don't know whether it's talk or whether it's just rumor, that Treasury is looking to impose some significant, I don't know if you want to call it hand cuffs, but limitation on that borrowing authority. I haven't seen that. But, what I'm looking to do is work with others to improve the sustainability of the Postal Service, make it more stable and really more enduring.

KBBI: It's not been too long ago, I heard you quoted as saying that the Postal Service may change in its form. Is that what you were talking about? Relieving it of its responsibility to fund so far ahead?

 

Senator Murkowski: On the pre-funding of the retiree benefits, that is the most significant ability that the Postal Service has right now; they don't receive money from the federal taxpayer. They operate off of postal products for its revenue almost entirely.

They don't receive any federal appropriations except for some very small amounts for mailing books to the blind and for mailing ballots to Americans that are living overseas. So if it weren't for the pre-funding of the retiree benefits, they'd be doing fine. They would be doing fine. They are not this entity that is this big draw on the Treasury. So again, making sure that it's sustainable and continues with six day a week service to the most remote of communities. This is what we're aligned on.

 

KBBI: And, given the massive unemployment numbers connected to this public health crisis, in what ways do you think health insurance should be tied to employment?
 

Senator Murkowski: ...Well. You know, that was one of the reasons that there was such a focus on PPP, because the intent or the design of that program was really to keep employees connected to their employer, recognizing that so many received their health insurance through their employer, so that was one of the underpinnings of the PPP and why we wanted to make sure that there would be that forgiveness for keeping the employees on. It's a fair question to ask. I think we have seen so many who have lost employment and their employers were not able to take advantage of the PPP and as a consequence, they no longer have their healthcare.

And so looking at that as well as some of the other hard matters that we're facing now in this COVID world, this is what we're doing.

So I am now getting on a call. I've got to excuse myself. We've got the Secretary of Labor, who's visiting with the delegation, where we're trying to make sure that, from the DOL perspective, we're going to be able to have fisheries with workers in the state this summer. So that's my next initiative today but thank you for the time this afternoon, Kathleen, and for the good questions.
 

KBBI: Senator, thank you. I so appreciate your time.
 

Senator Murkowski: Thank you. Good to be with you. Thanks and take care. Bye bye now.