Small Businesses Await Funds as Congress Talks Near an Agreement

Bookmark

(Bloomberg) -- Congressional leaders are on the brink of a deal to bring a fresh round of pandemic relief to small businesses, seeking to overcome partisan squabbling less than a week after the $349 billion Paycheck Protection Program ran out of funds.

The Senate has scheduled a late afternoon session Tuesday in anticipation of approving an agreement on a nearly $500 billion stimulus bill, including $310 billion to replenish the small business program. But negotiations with the Trump administration ended early Tuesday without a deal being reached.

House Majority Leader Steny Hoyer, a Maryland Democrat, said in a statement to representatives released shortly afterward that a House vote could occur “as early as Thursday.”

Passage would allow the government take new applicants for the program, which provides forgivable loans to small business that keep employees on the payroll for eight weeks.

“Republicans have been trying to secure more funding for this critical program for a week and a half,” Majority Leader Mitch McConnell said on the Senate floor Monday. “Colleagues, it’s past time, past time, to get this done for the country.”

‘Fine Print’

House Speaker Nancy Pelosi said on CNN Monday night that there was an agreement on the principles of the aid package and that negotiations were “down to the fine print.”

The basic outline of the plan was announced Sunday after Democrats secured additional funds: $50 billion to $60 billion for a separate Economic Injury Disaster Loan program; $75 billion for hospitals, with a significant portion aimed at those in rural areas; and $25 billion for virus testing.

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 Senate Minority Leader Chuck Schumer by acceding to some of their demands. Democrats had also sought $150 billion for state and local governments, but Republicans rejected that proposal.

President Donald Trump expressed optimism about chances for a deal at a White House briefing Monday.

“We hope to have an agreement very soon, and hopefully tomorrow the Senate is going to be able to vote,” the president said.

Some details have proven difficult to resolve. Both sides haggled on Monday over how to distribute aid to hospitals and testing sites. Another disagreement was over which agency should oversee the testing program, the Centers for Disease Control and Prevention or the National Institutes of Health, according to one person familiar with the discussions.

The proposed legislation would set aside $60 billion for smaller banks after the original program was criticized for favoring larger firms that already had access to capital. Intense lobbying was underway to influence the access rules for the program.

Hoyer told members they should be prepared to travel to Washington for a roll-call vote on the bill. Attempts to pass the bill by unanimous consent -- which would let most members stay home -- are expected to be blocked by members such as Kentucky Republican Thomas Massie, who has called such a procedure undemocratic.

House Democratic leaders also face a possible rebellion from their most liberal members who want to attach other changes, including more cash payments for individuals and cancellation of mortgage and rental debt.

“I am not here for a $5 bill and I will not insult my community with that,” said New York Democrat Alexandria Ocasio-Cortez, who called for recurring payments of $2,000 per month for low and middle-income individuals for the extent of the coronavirus crisis.

Opened on April 3 after being approved in last month’s $2 trillion stimulus, the Paycheck Protection Program has provided money to 1.6 million companies through almost 5,000 lenders, according to the Small Business Administration.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.