Schumer and Mnuchin Talk in First Sign of Break in Stalemate
Schumer and Mnuchin Talk in First Signal of Break in Stalemate
(Bloomberg) -- Senate Democratic leader Chuck Schumer and Treasury Secretary Steven Mnuchin talked Wednesday and a meeting has been set with staff in the first public sign of a possible break in the stalemate over replenishing a small business aid program and other efforts to respond to the Covid-19 pandemic.
The $349 billion small business aid program is expected to run out of money Wednesday afternoon, according to people familiar with the situation. Without more funding, many small businesses that have flooded banks with applications won’t get help, advocates said.
Staff from the offices of Schumer and House Speaker Nancy Pelosi will meet with Treasury officials, spokesmen for the Democratic leaders said, amid mounting pressure on Congress to add funds to the Paycheck Protection Program and before state and local governments facing a revenue crunch start slashing their budgets.
“We see no reason we can’t come to agreement,” Schumer said on a conference call with reporters. Hospitals, states and cities “need help immediately or we are going to have millions more out of work.”
The Democratic leaders have been at odds with Senate Majority Leader Mitch McConnell and the Trump administration over putting more money into aid programs designed to stem some of the economic damage from the nationwide shutdown caused by the coronavirus pandemic.
Republicans want to limit action now to adding $250 billion to the small business aid plan, a key part of the $2.2 trillion stimulus passed late last month. Democrats want an additional $250 billion for state and local governments and hospitals, changes to the small business program, more money for other loan programs that are running out of money and a boost to food stamp benefits.
The grim economic news continues, meanwhile. U.S. retail sales fell 8.7% in March, the biggest decline in records dating back to 1992, according to Commerce Department data released Wednesday. Federal Reserve figures showed U.S. factory output dropped in March by the most since 1946, just after World War II ended. The month also saw millions of layoffs, which have continued into April, and sharply reduced spending power for consumers.
Unlike the process that unfolded when the last stimulus measure passed -- Schumer and Pelosi gave regular updates of each conversation with Mnuchin -- there had been more partisan sniping than talking until Wednesday.
Even if an agreement is reached quickly, it was unclear how soon it could move through Congress with most lawmakers at home. Doing so this week would require unanimous agreement in both the House and Senate. The Senate could do that in a pro-forma session Thursday, and House Majority Leader Steny Hoyer didn’t rule out the House acting on Friday. However, that could be thwarted if any lawmaker objects.
There isn’t a comprehensive accounting yet of how much money lenders have disbursed so far in loans to small businesses. Some banks are starting to report totals, including JPMorgan Chase & Co saying on Tuesday it has funded $9.3 billion to firms and has more than 300,000 businesses in the application process representing $37 billion in loans.
As of noon Wednesday, the SBA reported there had been more than 1.3 million applications approved, totaling about $296 billion of the $349 billion set aside. That doesn’t represent the money given to small businesses, but rather the amount from applications that SBA has guaranteed for banks to lend.
Earlier this week, in a boost for the Democrats’ position, National Governors Association Chairman Larry Hogan, a Maryland Republican, made a plea for $500 billion in federal aid to help states and territories meet budgetary shortfalls.
“Without sufficient federal relief, states will have to confront the prospect of significant reductions to essential services,” Hogan said.
Exerting Pressure
Republicans have been attempting to keep pressure on Democrats to act. Trump struck a hopeful tone last week but attacked Democrats on Twitter Tuesday.
“The Democrats don’t want to approve more money for our great workers under the incredibly successful ‘Paycheck’ plan. Replenish Account Now!” he tweeted.
McConnell, speaking Tuesday on the syndicated “Washington Watch” radio show, said Democrats want to add money to programs that “aren’t out of money” while the PPP was near running out. “We’ll find out if the Democrats will go along with it.”
Florida Republican Senator Marco Rubio said on Bloomberg’s “Odd Lots” podcast that trying to pair adding to the existing business aid program with new assistance for states and cities would add complexity. Congress would have to come up with a formula for distributing funds to local governments.
“That’s more complicated than saying let’s just put more money into a program that’s up and running,” he said.
Pelosi, meanwhile, continued a blitz of TV news and late night talk show appearances and other dial-in events -- more than 20 over the past two weeks, according to her office -- and publicly released “Dear Colleague” messaging letters to fellow Democrats and other statements.
Tuesday night on MSNBC, Pelosi reiterated the main message she and Schumer have been sending. She said that after Mnuchin initially proposed a $250 billion measure to replenish the PPP, Democrats said that, “While we’re at it, what we desperately need is support for state and local government, as well as for hospitals.” But as for Republicans, she said, “They just said ‘no.’”
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