Senate misses deadline, but talks on loans go on
Senate negotiators haven’t given up on reaching a deal to add funds to a small-business lending program set up to help firms weather the coronavirus crisis, despite an impasse Thursday that coincided with the program running out of money.
While GOP leaders in the House and Senate have ripped Democrats over the impasse, saying they were hurting small businesses as the nation lurches into a recession and unemployment claims spike, there were some signs that the two sides could still come together.
During a conference call with lawmakers from both parties, President Trump expressed hope “that Democrats and Republicans can work together to find a solution here,” according to Sen. Roy Blunt (R-Mo.).
Blunt added that to do so, it “may involve something in addition to just advancing the Paycheck Protection Plan.”
Trump later on Thursday expressed hope that negotiators would solve the impasse soon.
“To be honest, I think something’s going to be happening. I hope so, because this is a very popular program,” he said at a White House briefing later in the day.
“We’re negotiating with Democrats and they should frankly approve it quickly. This is a great thing for our country, it’s a great thing for small business and for the workers, and we’re having a hard time getting them to approve it. I think it’s going to happen,” he said.
The Paycheck Protection Program (PPP) was set up under the $2.2 trillion coronavirus relief package signed into law by Trump late last month. The $349 billion program offering loans to small businesses to keep their workers on during the crisis ran out of money on Thursday, according to the Small Business Administration (SBA).
Republicans are seeking a clean $250 billion in new money for the program, while Democrats want to reform the program and provide at least $250 billion for hospitals, state and local governments and the Supplemental Nutrition Assistance Program for low-income families.
Senate Minority Leader Charles Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) have negotiated directly with Treasury Secretary Steven Mnuchin for a week now, instead of working with Senate Majority Leader Mitch McConnell (R-Ky.), in hopes of driving a wedge between the administration and GOP leaders in Congress.
Schumer and Pelosi spoke with Mnuchin and Treasury Department staff on Thursday afternoon. A spokesman for Schumer said “talks are ongoing.”
So far, Trump, Mnuchin and GOP leaders have remained unified in resisting Democratic demands to make it easier for women- and minority-owned businesses to obtain loans through the program and to provide an additional $100 billion for hospitals and $150 billion for state governments.
Trump on Wednesday accused Democrats of holding up new funding for the SBA because of partisan motives and took another shot at Pelosi and Schumer on Thursday.
“Democrats are blocking additional funding for the popular Paycheck Protection Program. They are killing American small businesses. Stop playing politics Dems! Support Refilling PPP NOW — it is out of funds!” he tweeted.
But behind the scenes, he was signaling to lawmakers that he’s ready for the weeklong impasse to end.
Pressure is on both sides to get a deal since the small business program, which will forgive loans to employers who keep workers on payroll, now will have to pause for a few days.
The Labor Department reported Thursday morning that 5.25 million more Americans had filed for first-time unemployment claims in the past week, bringing the total for the past three weeks to 22 million.
“This situation could have been completely avoided. Small businesses in America are in desperate need. We should not be playing politics and denying small businesses the help they need. Congress MUST fund #PPP,” Sen. Shelley Moore Capito (R-W.Va.) posted on Twitter after it was announced that the SBA program had exhausted its funding.
Sen. Thom Tillis (N.C.), a vulnerable Republican up for reelection who is neck and neck with his Democratic challenger in the polls, said Congress needed to act “immediately” to keep the small-business program running.
He said the program was helping “tens of thousands” of businesses in his state “get through this crisis and keep their employees on payroll.”
Sen. Joe Manchin (W.Va.), a moderate Democrat, said: “It’s time to stop the partisan bickering and come together to fix this.”
The Senate adjourned a pro forma session on Thursday without taking any action on replenishing the program and is not scheduled to hold another such session until 2 p.m. Monday.
McConnell said Thursday that he would “take a look at” whatever Mnuchin and Democratic leaders agree to.
“I know he’s talking to the Democrats about providing additional assistance,” the GOP leader said of Mnuchin’s efforts to secure $250 billion more for small-business loans.
McConnell noted that not all the money Congress appropriated in the CARES Act for hospitals and state and local budgets is yet “out the door,” but he didn’t rule out “dealing” with those Democratic priorities “later.”
Some Republicans warn that even if Mnuchin and Schumer reach a deal, McConnell would still need to secure support from his entire Republican conference to approve it by unanimous consent during a pro forma session — not an easy task.
The Senate is not scheduled to reconvene as an entire body until the week of May 4.
There’s also the challenge of passing an interim coronavirus relief deal through the House, which is also scheduled to be out until May 4, by unanimous consent.
Rep. Thomas Massie (R-Ky.), a libertarian conservative, says he will try to force the chamber to take a formal roll call vote on the package, which means a small group of House members will have to return to the Capitol to enable the presiding Democratic chair to overrule the objection.
Mnuchin and SBA Administrator Jovita Carranza announced Wednesday night that once the small-business program exhausted its funding, it would by law no longer be able to accept loan applications. The SBA’s Economic Injury Disaster Loan program is also out of money.
Even a short pause in lending from the SBA could lead to thousands of more Americans losing their jobs.
A study published Tuesday by Main Street America, a network of 300,000 small businesses, projected that as many as 3.5 million small businesses could close permanently over the next two months and 7.5 million could shutter over the next five months.
“This is not a time for finger pointing or political posturing. Small businesses — which are the lifeblood of the American economy — need an immediate cash infusion now,” said John Arensmeyer, the founder of Small Business Majority, a group that represents a network of more than 58,000 small business owners.
He said “90 percent of small businesses have been impacted by COVID-19 with a large percentage reporting a severely negative impact” and warned that “one in three businesses have closed and 14 percent more plan to do so.”