Lawmakers are reportedly closing in on a deal to replenish the $350 billion program designed to assist small businesses reeling from the coronavirus pandemic.
The Paycheck Protection Program, created with the goal of keeping workers on payrolls by providing loans and grants to businesses with fewer than 500 employees, ran through all of its funding in less than two weeks, leaving millions of small business owners wondering if they would be left out in the cold.
In a bipartisan compromise, Republicans signaled they would support a bill that includes funding for programs in addition to the Paycheck Protection Program. Democrats, who have pushed for a more comprehensive package, said they would accept a smaller number of additional provisions, including billions more for hospitals and new money to support testing.
The package could be worth between $470 billion and $500 billion, including:
- $310 billion for the Paycheck Protection Program, with $60 billion of that set aside for rural and minority areas;
- $60 billion for the Economic Injury Disaster Loan program, which also focuses on small businesses;
- $75 billion for hospitals;
- $25 billion for testing.
Democrats have reportedly agreed to push other elements they were seeking — most notably, aid for state and local governments — to a separate relief package to be negotiated later.
Final sticking points? Although a deal is reportedly close, funding to boost testing for the coronavirus has emerged as a last-minute sticking point in the negotiations, Erica Werner of The Washington Post reported Monday. Democrats are pushing for free testing for all Americans, Werner said, but Republicans want more emphasis on state responsibility. And Bloomberg News reports that the two parties still disagree over the formula to distribute health-care aid to the states.
The deal was not completed in time for a brief pro forma Senate session Monday, but the upper chamber has scheduled another meeting on Tuesday in anticipation of a vote. House Majority Leader Steny Hoyer said the lower chamber would meet as soon as Wednesday to consider the emergency bill.
Questions about the program: Reports that some large businesses have benefited from the small business program raised questions about the design and fairness of the plan. The legislation allows chains and franchises to count each location as a separate business, enabling some large, publicly traded companies — including Shake Shack, Potbelly and Ruth’s Chris Steak House — to receive millions in aid, even as small mom-and-pop stores have been shut out. (Following an uproar on social media over the issue, Shake Shack founder Danny Meyer said late Sunday that the company would return the $10 million it received.)
“I am concerned that many businesses with thousands of employees have found loopholes to qualify for these loans meant for small businesses,” Republican Sen. Rick Scott of Florida said Monday. “Unfortunately, when it comes to the PPP, millions of dollars are being wasted.” Scott also called for a change in the rules to include a requirement that small businesses show “substantial reduction in revenue” related to the coronavirus before being approved to receive aid.
A record level of support: “If the changes are signed into law this week, Congress would have approved more than $700 billion in emergency assistance for small businesses alone in just one month,” said Jeff Stein of The Washington Post. “That would be more than the entire $700 billion in bailout money approved during the 2008 financial crisis.”
