With small businesses having applied for more than $200 billion worth of loans and grants from the federal government as of Monday morning, some worry that the $350 billion Paycheck Protection Program will run dry by the end of the week, leaving smaller firms out in the cold.
Responding to a request from Treasury Secretary Steven Mnuchin, Republicans are seeking to add $250 billion to the program, which was established by the $2.2 trillion coronavirus relief package that passed in late March. The program provides loans and grants to small businesses to keep firms open and workers on payrolls. But Democrats last week blocked passage of the additional $250 billion for small businesses, saying they want revisions in the program’s rules as well as additional relief funds for hospitals and state and local governments. Democrats insist on negotiating a new bill, resulting in a stalemate.
Following a brief pro forma session Monday, the Senate is not expected to meet again until Thursday.
Huge demand for help: The Paycheck Protection Program has approved 860,000 applications for $210 billion of loans through 4,500 lenders as of Monday, CNBC reported. Getting the money into the hands of small business and sole proprietors has been more difficult than the approval process, however, and many applicants are still waiting to receive their loans and grants.
One problem is confusion over the terms of the loans, with some bankers saying they are still waiting for clear guidelines from the government about loan guarantees and the conversion of some loans to grants. “We have mostly undisbursed loans at this time,” Tony Wilkinson of the National Association of Guaranteed Government Lenders told CNBC. “We still don’t have a program guide.”
Voting is tricky: Few lawmakers are in Washington, making it hard to pass legislation except by unanimous consent, a parliamentary maneuver that allows legislation to proceed without recording individual votes. Staunch libertarian Rep. Thomas Massie (R-KY) said Monday that he would not allow the House to vote on any funding legislation via unanimous consent and would call for a recorded vote, forcing lawmakers to return to Washington, just as he did with the first aid package three weeks ago.
"By calling them out on the Constitution and making them come to Washington, D.C. in order to pass a bill, they're finding it harder to pass this next bill, because they know they're all going to have to come to work," Massie said. “They know I will get in my car and drive there and make them vote on it. And my colleagues, a lot of them, frankly, are cowards.”
Finger-pointing commences: Republicans blamed Democrats for slowing the additional aid and said they would not negotiate. "Republicans reject Democrats’ reckless threat to continue blocking job-saving funding unless we renegotiate unrelated programs which are not in similar peril. ... We will continue to seek a clean PPP funding increase. We hope our Democratic colleagues familiarize themselves with the facts and the data before the program runs dry," GOP lawmakers said in a joint statement.
In response, Democrats said a stand-alone bill has no chance of passing the House and demanded that Republicans start negotiations. “We have real problems facing this country, and it’s time for the Republicans to quit the political posturing by proposing bills they know will not pass either chamber and get serious and work with us towards a solution," House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement.
How does it end? The two sides are currently locked in a high-stakes game of chicken, with no clear outcome in sight.