House Plan Bars Lobbyists, Politics Groups From Small Firm Aid

15 May 2020, 03:49 PM IST

(Bloomberg) -- House Democrats are adding provisions to their next major stimulus bill to bar lobbyists and political groups from coronavirus relief funds for small businesses under the popular Paycheck Protection Program.

Changes in an amendment to the Democrats’ $3 trillion plan for the next round of stimulus reflect concerns that the aid money could go to lobbyists while Democrats seek to expand eligibility for the loans to an array of non-profit groups.

The changes, which are backed by leadership and are expected to make it into the Democrats’ final proposal, would bar businesses and other groups from counting the compensation of federally registered lobbyists when calculating how much aid the firms can access.

It would also disqualify groups that have or will spend money on elections or political advocacy in the current election cycle on the federal, state or local level. The House is scheduled to vote on the bill Friday.

The Democrats’ proposal, which was unveiled on Tuesday, would allow more non-profits to get funds under the loan program. That could permit many political groups, tourism bureaus, chambers of commerce and trade organizations that seek to influence laws and regulations to seek relief, though the amendment limits how those groups can access the funds.

The proposed bill would make several changes to the PPP, the centerpiece of the Trump administration’s $2.2 trillion relief package enacted in March. The program offers loans to small businesses of up to $10 million and was designed to be a short-term lifeline to keep businesses afloat until they can reopen. The loans convert to grants if the money is spent mostly on payroll in eight weeks.

Among the changes in the amendment are lengthening the period for spending the money to 24 weeks, scrapping a requirement that at least 75% be spent on payroll, and setting aside funding for firms with 10 or fewer employees. The amendment would also allow loans to be spent on personal protective equipment or supplies needed to protect the health and safety of employees.

The House measure faces steep odds in the Senate, which is controlled by Republicans.