Deal Struck on Interim Stimulus Plan With Senate Poised to Act

(Bloomberg) -- The White House and congressional leaders struck a deal for a new $484 billion pandemic relief plan with funds for a tapped-out small business aid program and aid for coronavirus testing and overwhelmed hospitals.

The Senate convened for a pro forma session at 4 p.m. Tuesday and was expected to approve the agreement by unanimous consent after up to an hour of debate. If that happens, a House vote as soon as Thursday is expected.

The deal was signed off by Senate Majority Leader Mitch McConnell, Senate Democratic leader Chuck Schumer and House GOP leader Kevin McCarthy. President Donald Trump said he’d sign the measure and begin discussions on a next round of stimulus.

Trump in a series of tweets urged Congress to approve the package, adding, “After I sign this Bill, we will begin discussions on the next Legislative Initiative with fiscal relief to State/Local Governments for lost revenues” and other spending.

McConnell said he hoped the Senate would quickly act and blamed Democrats for delaying the small business aid by holding out for inclusion of money they sought for hospitals and testing.

“I welcome this bipartisan agreement and hope the Senate will quickly pass it once members have reviewed the final text. I am just sorry that it took my colleagues in Democratic leadership 12 days to accept the inevitable,” McConnell said.

Schumer touted the agreement to his members as a big win for Democrats. House Speaker Nancy Pelosi and her leadership team have sent members notices there will be an 11 a.m. Wednesday call to go over the emergency funding measure.

The new package would provide $320 billion to replenish the Paycheck Protection Program for small businesses, which was part of the $2 trillion stimulus approved late last month and ran out of money last week.

Passage would allow the government to take new applicants for the program, which provides forgivable loans to small business that keep employees on the payroll for eight weeks. The bill sets aside $30 billion of the loan funds for banks and credit unions with $10 billion to $50 billion in assets and another $30 billion for even smaller institutions.

The plan includes $60 billion in loans and grants for a separate Economic Injury Disaster Loan program, and makes farms and ranches eligible for the loans. Also, there is $75 billion for hospitals, with a significant portion aimed at those in rural areas, $25 billion for virus testing.

The testing funds include $18 billion for states, localities, territories, and tribes to conduct Covid-19 tests, $1 billion for the Centers for Disease Control and Prevention and $1.8 billion for the National Institutes of Health. Up to $1 billion would cover costs of testing for the uninsured.

Democrats had blocked a bill almost two weeks ago that would have added $250 billion to the small business aid plan without the extra money for other programs. Republicans hammered Democrats for the move, but Democrats argued that more hospital funds were needed amid the Covid-19 pandemic even if all previous funds hadn’t yet been spent.

Ultimately, Treasury Secretary Steven Mnuchin decided to strike a bipartisan deal with Pelosi and Schumer by acceding to some of their demands. Democrats had also sought $150 billion for state and local governments, but Republicans rejected that proposal.

Trump said on Twitter that a further funding measure should include aid to state and local governments as well as “much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth.”

©2020 Bloomberg L.P.

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