A Republican attempt to add $251 billion to a popular coronavirus response fund for forgivable small-business loans by unanimous consent was blocked Thursday, as Sen. Chris Van Hollen objected.
Sen. Benjamin L Cardin, the ranking member of the Senate Small Business Committee, said the bill wouldn’t “address the immediate need of small businesses.”
He noted that the Small Business Administration had committed 30 percent of the existing funds but hadn’t yet released them. “The UC leaves out where small businesses need help today. ”
Senate Majority Leader Mitch McConnell, in comments on the floor, noted the new unemployment report released Thursday.
“This morning we learned that 6.6 million Americans filed for unemployment in just the last week,” McConnell, R-Ky., said. “We need more funding and we need it fast.”
“The country cannot afford unnecessary wrangling or political maneuvering, ” he said. “This does not have to be nor should it be contentious.”
“Do not block emergency aid you do not even oppose just because you want something more,” he said to Democrats.
Van Hollen, D-Md., proposed an amendment that was also rejected.
“But for goodness sake, let’s take the opportunity to make some bipartisan fixes to allow this program to work better for the very people it’s designed to help — small businesses, nonprofits. That’s what they are asking us to do,” Van Hollen said.
The $349 billion Paycheck Protection Program is the first part of the $2.3 trillion coronavirus economic rescue package to get up and running. Less than a week later after its enactment, lawmakers say it’s running out of money.
The White house requested the additional $251 billion for the fund Tuesday, and McConnell tried to oblige by advancing a measure through Thursday’s pro forma session.
House Speaker Nancy Pelosi, D-Calif., said Wednesday that the stand-alone $251 billion measure would fail in her chamber, adding that the Small Business Administration had enough money to wait a few days while Congress negotiated an interim spending package. Democrats want to add an additional $100 billion for hospitals and $150 billion for states to the stopgap measure, and set aside $60 billion of the SBA’s additional $251 billion for lending to underserved rural and minority-owned small businesses.
“We need more money for small businesses, and the president has been very clear. He’s happy to talk about other issues, such as hospitals and states, in the next bill. But, we wanted to go and get money for the small business program,” Treasury Secretary Steven Mnuchin said on CNBC Thursday.
The Paycheck Protection Program relies on an existing SBA guaranty program to give small businesses forgivable loans to cover up to eight weeks of payroll and other fixed costs. If the companies mostly use the money to pay their workers during the pandemic’s economic shutdown, then they won’t have to pay it back.
By essentially paying small companies to keep their workers, the hope is to soften the number of layoffs caused by the economic shutdown. Thursday’s report of 6.6 million initial claims for unemployment last week means more than 16 million workers have lost their jobs in the last month, exceeding the number of jobs lost during the 2008-09 recession.
Despite a rocky rollout that saw the SBA’s online loan portal crash and lenders complain over a lack of regulatory guidance, the program has been exceedingly popular. Senate Small Business Chairman Marco Rubio, R-Fla., tweeted Thursday that over $100 billion in loans to 400,000 small businesses had been approved since it began April 3.
“CONGRESS MUST APPROVE MORE [money] FOR PPP THIS WEEK,” Rubio also tweeted. “Don’t have time to horse trade. Improvements mean we could hit funding limit in days!”
The rapid depletion of the fund has many small-business owners worried that there won’t be any money left by the time they submit an application. Many lenders are only accepting applications from existing customers because the final interim rules issued by the SBA and the Treasury Department kept relatively lengthy anti-money-laundering paperwork requirements in place for new borrowers. Although Mnuchin told CNBC Wednesday that 3,500 lenders are now participating in the program, that still leaves out most of the nation’s banks and credit unions.
Thursday morning, the Federal Reserve Board also announced it would offer $600 billion in loans to small and mid-size businesses through a lending facility funded by Congress’ third coronavirus relief package.
Jennifer Shutt contributed to this report.
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