Appearing on GBH's Boston Public Radio Thursday, Gov. Charlie Baker spoke with small business owners and gig economy workers who have been asked to give back coronavirus pandemic unemployment relief funds they received and, in most cases, already spent. Baker said the state is only looking to document recipients of the relief dollars to adhere to federal law, and that his administration isn't pursuing a "clawback" tactic against workers who were deemed ineligible for funds after they received and spent the money. While callers asked Baker how they can best comply with the law, BPR co-host Jim Braude asked Baker if he'll grant forgiveness for any or all of the recipients. The transcript below has been lightly edited for clarity.
Brian from Taunton: A bunch of people got some of the loan money. I'm a self-employed man and initially got approved for some of the money. I sent in invoices on all my old client stuff and I got approved. And then a couple of weeks later they came back and they said I was unapproved — whatever the word is — after that, and now I owe the state $1,800. And a lot of people I know in the self-employed market, we're kind of in the same thing, and it's not very clear how to get out of this. The state now wants their money. After looking at my documents, they said that my business the year before seemed to have been going down anyway before the pandemic. I was a digital marketer, so mom and pops, pizza places, hair salons, Facebook ads, Instagram ads — so, obviously when COVID hit and everything closed, you know, then I really lost business.
What do I and all the people that have gone through the appeal process do?
Gov. Charlie Baker: That's the PUA program, so that's a federal program. There's a federal process that we have to go through for everybody who participate in the federal program, and our goal here is to sort of make sure that everybody who is marked as somebody who we either don't have enough information on or got what is deemed to be an overpayment has a chance to engage with us to determine where, relative to the federal rules associated with this program, they land. And at this point in time, that's exactly what we're doing with pretty much everybody. And it sounds like they asked you for some additional information as well.
The goal here is basically to try to find out if we can collect the data and the information from everybody who's part of this world so that we can solve their problem on behalf of the rules associated with this program that was developed by the feds. So far, we've waived about $1.8 billion in so-called "misappropriated" or "overpayments" and we're not planning to collect from anybody until we actually get through the whole universe of this and determine where people are, and where they land, and what information we need to actually clean up their circumstance.
Jim Braude: On the state piece, why rather than look at 650,000 individual cases, why not talk about some blanket forgiveness? Not only was it through no fault of their own, but I'm sure you accept this notion, when you are on unemployment to begin with, that you got this money to spend. It was probably on essentials. Now you're told you have to pay it back. That's question one: Why not a blanket forgiveness? And two: Have you talked to federal or federal members — congresspeople, senators — about seeing if Congress can do something about some level of forgiveness on the federal end?
Baker: There have been conversations with Congress, not just in Massachusetts, but from all over the place, from our administration.
Braude: How about the state forgiveness then?
Baker: I would like us to work the process. Keep in mind that the feds changed the rules a couple of times during the course of this, which is part of what creates the disconnect between what people submitted and what's expected now. To the extent that we can actually work the process and determine that, in fact, a whole bunch of people who submitted based on the rules as we understood them when they actually applied and started to get benefits, and clean up the stuff with respect to when the feds changed the rules and said, "You need additional information. You need a clean slate." It doesn't require anything other than doing the work on the data and the information that's associated with it.
I get the fact this creates for Brian, and for all these other folks, a period of tremendous uncertainty. But I think if we don't do it this way, then all we're going to do at the end of the day is Massachusetts is going to write a very big check to the federal government. And I would much rather clean this up administratively, find out every opportunity and possibility we have to actually deal with the data issues that are at stake and not end up taking money that we could be spending on mental health services and on housing, on all sorts of other things, and sending it to the feds.
Braude: But on the state portion, are you willing to at least entertain some sort of blanket forgiveness?
Baker: Why shouldn't we do the same process there that we're doing with the federal money? Every time we clean one of these up, it's done. And no one's out anything, which seems to me to be a much better way to deal with this.
Donna from Gloucester: I am a sole proprietor, gig worker, independent contractor. I own a small business on the North Shore, and when this all went down, you get the basic two-week notice that schools are closed, blah blah blah. Then you find out this is going to go on and you're on the government website looking for assistance. And then up comes an availability to get PUA. So you go on and you do your thing and put in what you qualified and why you're qualified to get the PUA.
And then months down the line, you get a letter because you keep checking back on your, you know, hole punch in your code to get your individual notices. And then you have to submit all this proof now that you've deserved all the PUA you've been getting. And there's a whole criteria list. So now you're [thinking] if you don't do that now, you're going to pay back every single thing they ever gave you.
My question is after you go on to submit all this proof, if you hit one wrong button by mistake — like you press "OK" instead of "submit" — now you have to go to court and prove all this. It was just so unbelievably convoluted. I was one of those stupid people that pressed the wrong button. It has been so difficult to navigate where you stand and how to get through it, and whether you're going to all of a sudden, somewhere months down the line, get some notice that, guess what, you didn't submit the right paperwork and you're going to hold back $20,000 that is long gone, that you've used on survival.
Baker: That was there as a federal program created for people who don't participate in the traditional unemployment system. We got no guidance from the feds originally on this. We put together our program based on a few simple things that we needed from people to demonstrate that, you know, they worked in Massachusetts [and] that they were, in fact, the self-employed individuals. They filed taxes that way. Driver's license, street address, very simple stuff to actually set the program up. We showed that to the feds and they said, "That's OK." And that's the way we set it up, and that's the information people gave us.
Months after that, the feds changed what they actually wanted and what Donna and Brian are both talking about is this stuff the feds came back on and said, "You need to submit this to demonstrate that, in fact, you 'qualified.'"
What I would say to Donna is we should get her numbers, as well, but we're not going to chase people on this stuff until we get to the absolute bottom of the pile. And if at that point in time we have issues associated with whether they can submit the data or we haven't had any luck in changing the rules here at the federal level, then we'll talk to the Legislature about coming up with some other kind of solution.
Braude: Which might include a blanket forgiveness?
Baker: I would like, yeah — I agree with both of you that this is not the way this is supposed to work. People participate in this program based on a set of rules that changed. We do need people to submit the documentation because who knows what ultimately happens with respect to the feds?
