Democrats block McConnell push to boost small-business aid

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Senate Democrats blocked Majority Leader Mitch McConnell’s attempt to quickly pass a $250 billion boost in aid to small businesses suffering revenue losses in the pandemic, likely delaying any action until leaders of both parties find a compromise.

McConnell had sought unanimous consent in the Senate Thursday for the small-business aid requested by Treasury Secretary Steven Mnuchin. Monday may be the next chance to quickly approve more aid without objection, and lawmakers aren’t scheduled to return to Washington until the week of April 20.

"Let’s take the opportunity to make some bipartisan fixes to allow [the Paycheck Protection Program] to work better for the very people it’s designed to help," said Sen. Chris Van Hollen, a Maryland Democrat.
"Let’s take the opportunity to make some bipartisan fixes to allow [the Paycheck Protection Program] to work better for the very people it’s designed to help," said Sen. Chris Van Hollen, a Maryland Democrat.

“We need more funding and we need it fast,” McConnell said on the Senate floor. “The country cannot afford unnecessary wrangling or political maneuvering.”

Democratic Senator Ben Cardin, a co-sponsor of the small-business Paycheck Protection Program, objected to the majority leader’s proposal, calling it “a political stunt.” Cardin said the PPP hasn’t run out of money but other programs have, and he said the PPP process needs to be streamlined to make it easier for small businesses to get loans.

Democratic Leader Chuck Schumer and House Speaker Nancy Pelosi are seeking to double the GOP’s $250 billion aid request for the slumping economy, including more federal aid for state and local governments and added funding for hospitals struggling to treat a crush of coronavirus patients.

As part of his plea for urgency, McConnell cited Thursday’s report that showed an additional 6.6 million people filed for unemployment benefits last week. That brings the three-week total to 16.8 million claims, or one in 10 American workers.

Mnuchin had asked Congress to approve by the end of the week an additional $250 billion for the program, bringing the total amount available to $600 billion. The only way to accomplish that with lawmakers out of town would be if no member of the House or Senate objected.

There have been no negotiations between Republican and Democratic leaders on a compromise, and Pelosi has signaled she had no intention of bringing McConnell’s proposal to the House.

The Paycheck Protection Program is a key part of the $2.2 trillion pandemic response package passed late last month. Stay-at-home orders across the country have particularly squeezed small businesses, which account for almost half of U.S. private employment. McConnell said that program is the only one immediately short of funding.

About a third of the $350 billion designated for the small-business loan program has already been committed in the first few days since lenders began accepting applications. Technical and regulatory difficulties have frustrated many small business owners, sparking concerns that the fund could run out before they access the loans.

Pelosi and Schumer on Wednesday proposed adding $100 billion for hospitals and $150 billion for state and local governments to Mnuchin’s request. They also want half of the additional small business aid — or $125 billion — channeled through community-based and other financial institutions that serve companies owned by farmers, families, women, minorities and veterans.

Democrats also wanted to temporarily increase food stamps, make it easier to get them and clarify that farms are eligible for the PPP program.

The two Maryland Democrats in the Senate chamber Thursday argued that there are other issues with the PPP that need to be addressed, rather than simply adding more money. Cardin and Senator Chris Van Hollen urged bipartisan talks like last month’s negotiations to pass the CARES Act stimulus package.

Ironically, Van Hollen had been among Democrats who originally proposed a $600 billion rescue package for small businesses — the total PPP funding McConnell was now seeking.

“We know we need more money for this program — many of us predicted this before we passed the Cares Act,” Van Hollen said. “But for goodness’s sakes, let’s take the opportunity to make some bipartisan fixes to allow this program to work better for the very people it’s designed to help.”

Bloomberg News
Small business lending Law and regulation Coronavirus Mitch McConnell
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