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Why congressional relief for small businesses ran out so fast

Small businesses constitute the primary engine of the U.S. economy -- and they are among the hardest hit by the novel coronavirus pandemic’s fallout. They suffered a new blow Thursday when the massive $349 billion relief program established to support them revealed that it is already out of money. Lisa Desjardins joins Judy Woodruff to discuss the predicament and how Congress might respond.

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  • Judy Woodruff:

    The primary engine of the U.S. economy is small businesses, and they are some of the hardest-hit.

    On top of that, a new blow hit today: The massive $349 billion relief program aimed at helping them is now out of money.

    Our Lisa Desjardins joins me to tell us what is happening in Congress to try to get help to small businesses and their employees.

    So, Lisa, tell us what did happen on all this today. And what exactly does this program mean for small business?

  • Lisa Desjardins:

    Judy, the fact that this program is now out of money means no more relief will be going out until Congress fixes this problem and adds more funding.

    What this program is, Judy, is essentially the most wide-sweeping lifeline ever to businesses in America. It is intended to help small businesses stay open. And it would give small businesses an unprecedented amount of relief, eight weeks of payroll that the U.S. government will essentially pay for entirely, as well as lease and utility costs.

    So, it is something a lot of small businesses say they need. But, Judy, because of the demand rising so fast, a tsunami of demand from small businesses, that $349 billion is already gone in just two weeks.

    In those 14 days, Judy, that amount of relief is more than the Small Business Administration has given out in 14 years. So, it's rather remarkable what they have done, but it just shows how immense the need is.

  • Judy Woodruff:

    So, Lisa, how is it this one program and whether it's continued or not is going to matter so much?

  • Lisa Desjardins:

    Right.

    And I should say there is a second program also for small businesses that has similarly reached its maximum funding. But this one is more funding for businesses.

    Judy, talking about how important small businesses are, the reason for this program — look at this — small businesses make up 48 percent of the work force in the United States. The number of those businesses, we're talking about 30 million small businesses. Most of them would be eligible for this money.

    But, Judy, because of the money running out, just 1.6 million of those businesses were able to get this money approved. And, Judy, tonight, many businesses don't know if they got that money or if not.

    For example, the tea shop owner in that lovely story that we just said showing about people's needs, she has applied. She's not sure if she's getting the money yet or not.

  • Judy Woodruff:

    And, Lisa, you have been reporting on the negotiations about all this under way between members — leaders in the Congress, the Trump administration. At one point, you said it looked promising. What's happened?

  • Lisa Desjardins:

    Well, the promise is that it seems Republicans may be open to some ideas from Democrats.

    But let me back up and explain what's happening. Democrats are the ones who are essentially refusing to add more funding just on its own.

    So, let's look at where the two sides are. First of all, the Republicans here right now, they have proposed for over a week adding a quarter-of-a-billion dollars to this program, just that, nothing else.

    Democrats, however, say that they need some of that money to specifically go to some areas that are underserved that they don't think that money is reaching right now. They also want more money right now for states and for hospitals. They say those are urgent needs as well and need to be passed immediately.

    So, Judy, it's a strange situation, where nearly everyone agrees all of these areas need money, but they disagree over timing. And, Judy, the pressure will be on Democrats over the weekend to see kind of if there's a political fallout from them blocking more money for this program. It will likely be days, at least until next week, before Congress can pass any fixes for this.

  • Judy Woodruff:

    And just quickly, Lisa, what's the difference then in who would get money, what the Republicans want vs. what the Democrats want?

  • Lisa Desjardins:

    Well, in general, everyone — the same group of people would get money. It's sort of a matter of timing.

    Democrats' plan would probably help more community banks, places that don't see these loans often, not as big of a bank. But I want to also mention an important group, the self-employed.

    That is the bulk of small businesses, individuals, like plumbers, accountant, farmers. They all can apply for this money. However, they were not allowed to apply for it until a week after everyone else.

    That's because the guidelines for them are more complicated. Judy, they are at the back of the line, and they are the most likely to have been frozen out of this program right now.

  • Judy Woodruff:

    And, finally, quickly, Lisa, where does it stand?

  • Lisa Desjardins:

    Right.

    So there are negotiations continuing. Talks go on. We have heard from all offices tonight. But, as I say, Judy, even if they reach the deal over the weekend, because of the way Congress is meeting right now, which is barely meeting, I don't think any deal could actually become law until late next week.

    But talks continue.

  • Judy Woodruff:

    Lisa Desjardins, thank you very much for staying on top of this for us.

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