WASHINGTON – The stimulus program designed to help small businesses hurt by the coronavirus pandemic is nearly out of money, leaving its future up in the air as congressional leaders work on a deal to replenish the initiative.
About 90% of the $349 billion set aside for the Paycheck Protection Program, designed to help struggling businesses stay alive and keep paying their workers, had been allocated as of Wednesday afternoon.
Congress’ failure to inject more money into the program has left members on both sides of the aisle frustrated.
Sen. Marco Rubio, R-Fla, who chairs the Senate Small Business Committee, said it was clear the program would “grind to a halt” by Wednesday evening.
“Now 700000 small business applications are in limbo & no new loans will be made until the game of chicken in Congress ends & additional $ approved,” he said on Twitter, calling the politics “inexcusable.”
As the program’s popularity became apparent earlier this month, the administration and Treasury Secretary Steven Mnuchin asked Congress for an additional $250 billion to bolster the program and prevent it from running dry. Though both parties are supportive of passing additional funds for the program, Democrats and Republicans have so far been unable to find a compromise, leaving the future of these loans – and potentially businesses – in jeopardy.
Democrats have demanded that in approving more money for the program, Congress should also pass more funds for hospitals and state and local governments. They also want to bolster food stamp benefits and mandate some of the funds go to businesses owned by women and minorities.
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Senate Republicans last week attempted to pass a measure to provide the additional $250 billion for the program, but Democrats objected and instead offered a competing bill, which Republicans rejected.
The top Republicans in the Senate and House – Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy – said Democrats were holding American workers “hostage” to political demands.
They called the requests made by Democrats “unrelated” to the program and argued the provisions include “hundreds of billions of extra dollars for parts of the legislation which are still coming online and have not yet spent a single dollar.”
“American workers are in crisis. Nobody except Washington Democrats seems to be unclear on this fact or confused about the urgency,” the pair said in a statement. “Republicans reject Democrats’ reckless threat to continue blocking job-saving funding unless we renegotiate unrelated programs which are not in similar peril.”
Senate Minority Leader Chuck Schumer, D-N.Y., spoke with Mnuchin on Wednesday and said Democratic staff from the House and Senate were planning to meet with the Treasury Department later in the day.
“We see no reason why we can’t come to an agreement,” he said on a press call with fellow Senate Democrats.
But, he also signaled Democrats were not willing to relent. Schumer argued more money was needed for hospitals and local governments, explaining they, too, were in a crisis and not providing more money for these entities could mean “millions more out of work.”
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House Majority Leader Steny Hoyer, D-Md., also signaled that he was hopeful a deal could happen soon but could not promise it would happen before the end of the week.
“I can’t guarantee that we can get to an agreement that we can pass by Friday,” he told reporters on a conference call Wednesday.
Responding to the program’s dwindling funding, House Speaker Nancy Pelosi reiterated Democrats’ requests.
“Democrats know that in order for the Paycheck Protection Program to succeed, it must work for everyone,” she said in a statement.
Before the funds make their way to businesses, a bill will have to pass both the House and Senate, and get President Trump’s signature.
The program, which started on April 3, has 1.4 million approved applications totaling over $305 billion, according to the Small Business Administration.
The PPP was part of the $2.2 trillion emergency stimulus package approved in March. It provides business owners with 500 or fewer workers low-interest loans to stay afloat. Those loans will be forgiven by the government if at least 75% of the money goes to keeping employees on the payroll, which would basically amount to grants for these businesses.