House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) said any package that included $250 billion in new small-business funding would need to include more than $250 billion in extra money for hospitals, state and local governments and food stamp recipients.
President Trump and Treasury Secretary Steven Mnuchin are seeking the extra small-business money after banks fielded more than 400,000 loan requests in less than a week for firms trying to navigate the economic fallout from the coronavirus pandemic. Mnuchin told Democrats on Wednesday that already $100 billion in loans had been approved, and the program was authorized for $349 billion in funding as part of the $2 trillion law that passed last month.
The White House wanted the Senate to vote on the measure Thursday and the House to pass it by Friday, but as of late Wednesday it was unclear how Congress would proceed.
“We do not have time for the partisan games and we don’t want that, the obstruction or the totally unrelated agendas," Trump said Wednesday.
To move on such a tight deadline, Congress would need unanimous consent, a dynamic that gives individual lawmakers extreme leverage to halt any bill.
“I have said very clearly: What they are proposing will not get unanimous consent in the House. There is no reason why they cannot come to the table and see the value of what we are offering,” Pelosi told The Washington Post on Wednesday, referring to the Democrats’ counter to Mnuchin. “You cannot expect us to ossify inequality in access to capital as we try to fight the coronavirus.”
Republicans, meanwhile, didn’t seem amenable to meeting Democrats’ demands.
“I just don’t think there’s going to be support” among Republicans for what Democrats have asked for, Senate Majority Whip John Thune (R-S.D.) said Wednesday in an interview with The Washington Post. On hospital and state and local government funding, there are “big concerns about doubling down on either of those areas without having any idea about what we’ve done so far,” Thune said, whereas the small-business program has been deployed and it’s clear the government needs to quickly replenish that fund.
“This is a fairly straightforward request, which I would hope Democrats and Republicans would recognize is really going to be necessary unless we want to have to have people run out of confidence in the program, thinking that it’s not going to be fully funded,” Thune said of the $250 billion request for the small-business Paycheck Protection Program.
After passing the $2 trillion coronavirus emergency spending law last month, the White House and congressional leaders are still trying to contain economic fallout caused by the pandemic. The 400,000 small-business loans approved in the past week would represent just a fraction of the 30 million small businesses in the United States, and Mnuchin suggested that more than one-quarter of the program’s funding had already been committed.
Many firms are grasping for economic assistance because their revenue streams have dried up in the past month. Many Democrats have also supported the small-business initiative, called the Paycheck Protection Program at the Small Business Administration. But they have said more spending also must be devoted to helping cities, states, health care workers and others. Roughly 10 million Americans lost their jobs in the last two weeks of March.
Rushing legislation through Congress is extremely difficult, but congressional leaders appeared to hold out hope that a resolution was possible. On a conference call with House Democrats on Wednesday Pelosi and Majority Leader Steny H. Hoyer (D-Md.) suggested a deal could be reached by Friday.
Meanwhile, though, Senate Majority Leader Mitch McConnell (R-Ky.) is moving forward to bring the $250 billion small-business increase up on the floor on Thursday without Democrats’ priorities included, essentially daring Democrats to object. An objection from any individual senator would block passage of the legislation. Democrats plan to block McConnell’s bill and propose one of their own on Thursday, which will likely result in an impasse.
“Small businesses are closing across the country. If any one senator feels that what they require isn’t urgent then they’re free to object, but if not then they should try to hold off and know that other priorities will be addressed in the coming days and weeks ahead,” a Senate GOP aide said Wednesday, speaking on condition of anonymity to reveal internal thinking.
Schumer and Pelosi said Wednesday they would agree to the $250 billion for small businesses if half of it goes through community-based financial institutions serving farmers and family, women-, minority- and veteran-owned small businesses and nonprofits. They also sought “improvements to ensure all eligible small businesses can access this critical funding and are not turned away by banks.”
Their list of demands also includes $100 billion for hospitals, community health centers and other health systems, to increase testing and needed protective gear and equipment; $150 billion more for state and local governments; and a 15 percent increase in food stamp benefits. The federal government spent $55.6 billion on these nutrition assistance benefits last year. The sums Democrats are seeking for hospitals and cities and states are similar to how much they got in the $2 trillion Cares Act, which would therefore double the overall funding commitment in those areas.
“The heartbreaking acceleration of the coronavirus crisis demands bold, urgent and ongoing action from Congress to protect Americans’ lives and livelihoods,” Pelosi and Schumer said in a joint statement.
In an interview Wednesday morning on CNBC, Mnuchin did not address the Democrats’ new demands but renewed his call for Congress to approve the small-business spending increase this week.
“I want to assure all small businesses out there we will not run out of money,” Mnuchin said. “The president has asked us to go back to Congress, we hope they pass this tomorrow and Friday, and we want to assure everybody if you don’t get a loan this week you’ll get a loan next week or the following week. The money will be there.”
Mnuchin said 3,500 lending institutions were already set up to issue loans. Some larger banks, however, still have not begun to do so. It’s unclear exactly when the program’s money would run out but some bigger banks have just begun issuing loans and some groups of workers are just becoming eligible to apply. A number of small businesses have complained that the application process is confusing and difficult to navigate. The Treasury Department has continued to try to update it, releasing new guidance on Wednesday.
Under the Paycheck Protection Program, companies with fewer than 500 employees are eligible for loans of up to $10 million. Business owners will not have to pay the loans back if they meet certain requirements, including using 75 percent of the money to retain or rehire employees. Businesses can receive a $10,000 loan advance that does not have to be repaid, the Small Business Administration has said.
The SBA is running the program, though Mnuchin is playing a central role in its operation. Through the program, banks collect a processing fee by making loans to small businesses, and the government guarantees the loans will be repaid. The banks can then offload the loans to a special program set up by the Federal Reserve to free up more money for lending.
A broad variety of entities can qualify for the loans, including nonprofits and faith-based organizations.
Pelosi and Schumer said the package of increased spending for small businesses, hospitals, cities and states and food stamp recipients should be followed by another major rescue bill building on the $2 trillion law. That law also included major increases for unemployment insurance — which some states are having trouble rolling out — as well as money to send cash payments of $1,200 to many Americans, and a $500 billion fund for companies, states, and cities.
“After we pass this interim emergency legislation, Congress will move to pass a CARES 2 Act that will extend and expand the bipartisan CARES Act to meet the needs of the American people," Pelosi and Schumer said in their statement. “CARES 2 must provide transformational relief as the American people weather this assault on their lives and livelihoods.”
Even if Pelosi is able to get a deal with the administration, there’s no guarantee she could obtain unanimous consent in the House, given the ability of just one lawmaker to block that from happening. When the House passed the CARES Act late last month, Rep. Thomas Massie (R-Ky.) insisted on a quorum -- or majority of the House -- being present, something that is called for in the Constitution but rarely enforced.
Massie said in an interview on Fox Business on Wednesday that “once again they’re recommending that just let Nancy Pelosi pass it on her own, that we could all stay home. And I’m saying that’s not gonna fly, doesn’t fly with the Constitution, doesn’t fly with accountability to the taxpayers.”
Massie said Pelosi should enable “remote voting” for lawmakers, something House leaders have said is impractical in the near term.
Mnuchin also said the Treasury Department was working with the Fed to ensure businesses with more than 500 employees — the cutoff for the small-business lending program — would be able to access capital even if they aren’t large enough to qualify for the major industry loan program. Guidance on this program could come later this week, he said.
Robert Costa, Renae Merle and Aaron Gregg contributed to this report.