Senate Democrats attempted to push through a bill Wednesday that would modify the forgivable loan program for small businesses affected by COVID-19 but were stopped by Republican Sen. Ron Johnson, R-Wis.
Senate Minority Leader Charles E. Schumer, D-N.Y., asked for unanimous consent on the bill, which passed the House last week by a 417-1 vote. Johnson objected, despite pressure from his own party to set aside his opposition to the bill.
Before the vote, Senate Small Business and Entrepreneurship Chairman Marco Rubio, R-Fla., and Sen. Susan Collins, R-Maine, said there was a “chance” the bill would pass and that another bill, to fix a technical problem in the House bill, would follow soon after.
Johnson said he wants to see additional changes put into the loan program now, but hinted he could drop his opposition following more negotiating.
“I think we’re really close,” Johnson said on the floor. “I think we can pass the House bill — with assurances — by unanimous consent. Just not at this moment…. Maybe we pass this later tonight or early tomorrow morning.”
Johnson said he’d allow the unanimous consent request if Senate Majority Leader Mitch McConnell, along with the chairs and ranking members of the Senate and House small business committees, signed a letter clarifying that an extension to the end of December would apply only to spending and not extend the application deadline.
The House bill would make a handful of changes to the Paycheck Protection Program, which offer companies forgivable loans that act like grants as long as the money is used mostly to pay employees.
Johnson and Sen. Mike Lee, R-Utah, had been opposed as senators maneuvered to get the legislation to the floor. Both oppose a provision that would push the loan application deadline from June 30 to Dec. 31.
Lee told CQ Roll Call on Tuesday that he wants an Aug. 15 deadline.
FiscalNote, parent company of CQ Roll Call, has received a loan under the Paycheck Protection Program.
Johnson told reporters earlier Wednesday that he supports the program, but wants to see specific changes preventing businesses that haven’t suffered from the pandemic from getting the loans.
“It did a pretty good job of getting money quickly in the hands of businesses that needed it,” Johnson said. “The problem is that it got money in the hands of businesses that didn’t need it as well.”
The House bill “basically reauthorizes the program through Dec. 31, setting up a massive new infusion into the program without the reforms that I think really need to be placed so people that don’t need it don’t keep getting it,” Johnson said.
In a comment to reporters after the Republican lunch, Johnson said he was working on a deal that would allow unanimous consent Wednesday. “I think we’re getting pretty darn close.”
Collins was also asked after the lunch about seeking unanimous consent Wednesday. “I think we will, but I don’t really know,” she said. “But that’d be my guess.”
The bill does not add funds to the program, which has issued $510.3 billion in loans so far out of the $660 billion available. The lending pace has slowed considerably in the last few weeks, and the approved total has fallen from $513 billion in mid-May as some companies have returned loans.
The bill’s biggest change would extend the time period in which borrowers must spend loans in order to have the debt forgiven from eight weeks to 24 weeks. According to a recent survey from the National Federation of Independent Businesses, 23 percent of borrowers businesses will hit the eight-week deadline next week.
Rubio also said there were “technical problems” in the House bill that need correcting. The measure intended to lower a Small Business Administration threshold requiring businesses to spend 75 percent of their funds on payroll to 60 percent. But the legislation as written would require companies to spend 60 percent on payroll or none of the loan would be forgiven. The correction would clarify that the difference between the threshold and the amount paid to workers would have to be repaid.
To fix it, Rubio said, the Senate could pass the House bill as is, and then follow it up with a separate unanimous consent vote to fix that problem, asking the House to do the same during a pro forma session.
The other option would be sending an amended version back to the House. But that would slow things, and leave businesses running up against the eight-week deadline in the lurch, with the House scheduled to be away from Washington until the end of June. House Majority Leader Steny H. Hoyer, D-Md., has said the House could be called back with three days-notice to work on a coronavirus-related bill, but that would still be too late for many businesses.
The Senate tried to “hotline” a separate extension bill before its Memorial Day recess but ran into GOP objections.
Cardin said it’s unclear whether Lee or Johnson would object. “I don’t know exactly the Republican status on it,” he said. “I know the Democratic status: We’re fine.”
Lee’s office didn’t respond to a request for comment.
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