Less than two weeks after passing the largest recovery act in U.S. history, leaders in Washington have quickly agreed that the $2.2 trillion measure was not enough. They’re mobilizing around another emergency coronavirus spending package, but they differ over where to increase spending, and by how much.
Here’s what we know now:
The White House, Senate Majority Leader Mitch McConnell and other Senate Republicans are proposing a $250 billion boost to one key area – the Paycheck Protection Program for small businesses.
That program, referred to as PPP for short, received about $350 billion in the CARES Act. With more applications than anticipated, this new money would help fulfill the PPP’s goal of covering two months worth of payroll and lease costs for most businesses with fewer than 500 workers.
McConnell on Thursday sought unanimous consent, a procedure that does not force members to be in the chamber and does not record who voted in which way, to pass the Republican proposal in the Senate, but Democrats blocked him, and the Senate adjourned until Monday.
Small business help in high demand
According to a person on a conference call Wednesday between Treasury Secretary Steven Mnuchin and Democrats, Mnuchin said that the Small Business Administration has already approved some $98 billion in loans as a part of PPP since the relief bill passed.
That is almost four times the amount in SBA loans that were guaranteed for the entire 2019 year.
The National Federation for Independent Business, a group representing small businesses, found that nearly two-thirds of their members planned to apply for the program. That is a massive increase from the usual 10 percent of NFIB members who use SBA loans.
The demand has ratcheted up pressure on Congress to increase the initial $377 billion set aside for the effort.
Pelosi and Democrats’ push
Democrats have their own counter proposal for the next emergency spending bill. Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi released a joint statement Wednesday and then provided more details to Democrats on an afternoon conference call.
Pelosi described a plan that would almost immediately:
- Increase the Paycheck Protection Program by $125 billion
- Add another $125 billion in small business relief which would include: $60 billion for community lenders and $50 billion for SBS disaster assistance loans
- Make farmers eligible for the PPP
- Change the calculation for the PPP to make more of it forgivable
- Increase funding for state and local governments by $150 billion
- Increase funding for hospitals handling the crisis by $100 billion
- Boost the SNAP benefit, formerly known as food stamps, by up to 15 percent
Pelosi told Democrats that if they agree on a deal with the president, she will try to pass it through the House by unanimous consent, that same procedure McConnell tried Thursday without success.
By that method, the House could vote as soon as Friday.
Now the two parties will work through discussions to try to reach a deal. Sen. Ben Cardin, D-Md., who is the ranking Democrat on the small business committee, told reporters Thursday that he thought such a deal was “unlikely” this week.
Lone Republican vows to block
Even should the White House, House and Senate agree on how much money to fund in the next round, they all face a logistical issue: Rep. Thomas Massie, R-Ky. He objects to the fact that the CARES Act is being paid for almost entirely through borrowing by the federal government. His objection could hold up passage of the bill.
The Senate and House had set a target date of April 20 to return to Washington for this and other debates, but lawmakers have yet to fully commit to that timeframe.