NEWS: Congressman has plan to get money to Guam residents faster; Senators supportive
By Eric Rosario
(Tamuning, Guam) Residents qualified for federal direct cash assistance can get that money faster if senators enact a plan Congressman Michael San Nicolas rolled out in a conference call Monday morning.
Mr. San Nicolas explained the plan to Speaker Tina Muna Barnes, Senator Mary Torres, Senator Jim Moylan, and Guam media today. The plan would advance federal direct cash assistance and partial unemployment payments weeks ahead of when the federal money actually is anticipated to arrive in the government of Guam treasury, but legislation is required.
Direct federal cash assistance: Two options
Mr. San Nicolas explained the Legislature can stand up one of two options to get qualifying adults the $1,200 in assistance and children $500 without going through the cumbersome local-federal alignment with the Internal Revenue Service. Going through the alignment process may delay payments for weeks.
Public option
Under the public option he explained, senators would authorize the Guam Economic Development Authority to issue a bond to the Government of Guam Retirement Fund, and use that investment to issue the checks to qualified adults and children.
The money from the Retirement Fund would be used to make the payments to qualified residents. When the federal money arrives in the GovGuam treasury, GEDA will then pay back the Retirement Fund.
In order to make the bond a proper investment, the plan calls for the use of the $10 million unused portion of the local war claims fund to pay seven percent capitalized interest on the bond. That would open up about $142.8 million in funding to pay 119,000 people $1,200 each.
Ms. Muna Barnes asked Mr. San Nicolas whether such an action would violate an existing order against so-called raiding of the Retirement Fund. Mr. San Nicolas affirmed that it wouldn't because GGRF invests its capital all the time. "This is no different," Mr. San Nicolas said. "It is an interest-earning investment for them."
Private option
Mr. Moylan and Ms. Torres prefer the private option, which if passed by the legislature would pledge the federal money that is anticipated as a guarantee to participating local banks that issue the direct federal cash assistance to qualified recipients. It almost is like a tax refund loan, except better, because the payback will be guaranteed by the government of Guam and securitized by the federal money waiting to come in.
Applicants for the direct cash assistance to participating banks would assign their federal checks to the banks in return for immediate money in the form of a loan. The loan would be guaranteed by the government of Guam, and paid back by the government of Guam to the bank with interest.
"In this scenario, the individual will pay zero percent interest," Mr. San Nicolas said. "GovGuam would pay the interest, somewhere between five percent and 10 percent, which is up to the Legislature to decide."
The payment on the annualized interest will be made from the $10 million unused portion of the local war claims fund.
"The private option would be faster to implement," Mr. San Nicolas said, because banks already are equipped with the manpower and systems to roll out such a program.
"I find this option even more interesting," Mr. Moylan said.
"I'd be very much inclined to put my support behind a plan that can work, especially it if affects the private sector in a positive way, because really that's where people are hurting the most," Ms. Torres said.
Unemployment assistance
Mr. San Nicolas is suggesting senators implement a similar financial instrument to pay out a fraction of unemployment claims as a holdover until federal unemployment checks are ready for Guam.
"These are lifeline loans, maybe $100 a week cash advance on unemployment assistance, until the money starts flowing in," Mr. San Nicolas said. "I know it's not much compared to what people need, but it's something rather than waiting for the money to come in."
The congressman cautions senators against a financial instrument that guarantees cash advances above the known $600 a week per qualified claimant for the next four months.
How fast can this happen?
Ms. Muna Barnes, who listened intently throughout the call and asked a series of questions, said she is communicating with Ms. Torres and Mr. Moylan on a path forward, including the drafting of the necessary legislation and a call to session.
"I'll be contacting the banks and working with our folks to see if we can get something together in short order," the speaker said. "If we can get the details settled, I can call session in as little as two hours."
The speaker would not commit to a timeline, but did indicate her support behind the congressman's proposals. "I want to do anything and everything possible to see to it that our people who are hurting get the help they need sooner rather than later, and if this is something that will work, then we'll get on it."
"These are daunting times," Mr. San Nicolas said.
"Time is our biggest enemy right now in fighting for these unemployment and cash assistance needs of our people," Ms. Torres said.
