The Trump administration and congressional leaders are closing in on a $400 billion-plus deal that could pass the Senate as soon as Monday to renew funding for a small business loan program that recently ran out of money, Treasury Secretary Steven Mnuchin and top Democratic leaders said Sunday.
The deal would also boost spending for hospitals and testing.
Mnuchin said on CNN he hoped to see the agreement pass the Senate on Monday and the House on Tuesday. House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) also expressed optimism a deal was near, with Schumer saying he was “very hopeful we could come to an agreement tonight or early tomorrow morning.”
The deal would add around $300 billion to the Paycheck Protection Program for small businesses that was swamped by demand in the three weeks since Congress passed it as part of a $2 trillion coronavirus rescue bill. It also would add $60 billion to a separate emergency loan program for small businesses that also is out of money, Schumer said.
The agreement also would include $75 billion for hospitals and $25 billion for testing, which have been major Democratic demands. Some of the money in the small business program would be directed specifically to rural and minority businesses, according to people familiar with the plan who spoke on condition of anonymity to describe it.
“We want to make sure that it’s reaching all of America’s small businesses,” Pelosi said on ABC. “And we also want to make sure that it’s operating in a community where our police and fire, our health care workers, our doctors, nurses, our teachers, are being compensated for and not fired. And that’s why we’re asking for the additional funds in the package, as well as for hospitals so that we can do testing, testing, testing.”
“I think we’re very close to agreement,” Pelosi said. The lack of testing has been a major pressure point throughout the pandemic, with lawmakers and governors lashing out at the federal government for its failures in that regard even as President Trump has increasingly blamed governors.
Another major Democratic ask — money for cities and states — appeared left out of the deal, though talks remained fluid, and Schumer said some items were still being discussed. Congressional aides cautioned that the deal was not final.
Mnuchin said he’d been in contact with GOP congressional leaders and, “We’re all on board with the same plan.”
“I’m hopeful that we can reach an agreement that the Senate can pass this tomorrow and that the the House can take it up on Tuesday, and Wednesday we’d be back up and running,” Mnuchin said.
A $2 trillion economic bailout and stimulus law passed by Congress last month created a $349 billion Paycheck Protection Program, which allowed banks to issue taxpayer-backed loans to small businesses to help them weather the coronavirus pandemic.
On Thursday, the White House said nearly all of the $349 billion had been committed and the SBA stopped backing new loans. The White House said the program allowed 1.6 million companies to receive the loans, and most of the money must be spent on paying the wages of employees to minimize job losses during the pandemic. More than 22 million Americans have filed for unemployment benefits in the past four weeks.
Even with the 1.6 million loans, it appears a fraction of companies received the taxpayer assistance. There are 30 million small businesses, and many firms complained they were blocked from accessing the money. On CNN, Mnuchin was asked whether Congress would need to appropriate even more money on top of the $300 billion to help more companies, and he said the $300 billion would be sufficient.
If the changes are voted into law this week, Congress would have approved more than $700 billion in emergency assistance for small businesses in just a month. That would be more than the $700 billion in bailout funds approved during the financial crisis. But the financial crisis money had strict requirements regarding public disclosure over who received the money. Under the current arrangement set up by Congress and the White House, it’s unclear if the public will ever learn who the recipients are of the new money. The White House has said that businesses, non-profits, churches, and affiliates of large companies can seek the money.
Schumer said there would be changes sought by Democrats to the Paycheck Protection Program to ensure greater participation by community banks that would ensure smaller businesses get more money.
Schumer and Pelosi have been negotiating with Mnuchin throughout the weekend.
The new money for hospitals in the bill would come on top of $100 billion in the original $2 trillion rescue bill. Hospitals have been begging for additional relief, with some overwhelmed by treating covid-19 patients and others losing nearly all revenue and laying people off because they are no longer doing elective procedures.
Democrats had also been demanding an additional $150 billion for cities and states whose budgets have been decimated by the economic toll of the coronavirus. But Republicans have opposed that, insisting it was not the federal government’s job to make up for state budget shortfalls.
Mnuchin said that President Trump had heard governors’ pleas and was willing to address them in subsequent funding bills. After passing this interim measure with more money for small businesses, hospitals and testing, Congress is expected to turn its attention to cobbling together another major rescue bill.
Maryland Gov. Larry Hogan, a Republican who chairs the National Governors’ Association, has joined other governors in asking the federal government to approve $500 billion in additional spending for them. But he said on CNN on Sunday that he didn’t want to see funding for small businesses held up as lawmakers and the administration wrangle over asks from states.
“We’re just hopeful that we can get all these parties to agree and put aside the partisanship in the U.S. Senate, get the administration and the senators on both sides of the aisle to reach some kind of a deal to get it done, because we do need to get this money out for our small businesses, and certainly the hospitals need help as well,” Hogan said.
Hogan said he’d spoken with Mnuchin and Trump, and they’d committed to working with governors on more money in upcoming spending bills. “I don’t think the deal is finalized yet, but look, we don’t want to hold up funding to small businesses,” Hogan said.
Congress is out of session so they can only pass legislation that’s agreed upon in advance by all parties and can pass by “unanimous consent” at one of the periodic “pro forma” sessions that take place in both chambers. The Senate is holding a pro forma session on Monday and the House has one set for Tuesday, creating opportunities for action.
The House is also in the process of developing a system of proxy voting that would allow lawmakers to essentially vote remotely by authorizing colleagues to vote on their behalf. Many lawmakers are reluctant to return to D.C. en masse given the health risks of the pandemic.
Mike DeBonis contributed to this report.
