The Trump administration and congressional leaders closed in Sunday on an approximately $470 billion deal to renew funding for a small-business loan program that ran out of money under crushing demand during the coronavirus pandemic, aiming to pass the agreement into law within days.
“I think we are getting close to a deal,” Trump said at the daily briefing of his coronavirus task force. He said he had just spoken with Treasury Secretary Steven Mnuchin, who has been leading negotiations for the White House.
“We have some very good negotiations going on right now, and I think you could have a nice answer tomorrow,” Trump said.
Earlier, speaking on CNN, Mnuchin said he hoped the Senate would pass an agreement on Monday, when the chamber is scheduled to come into session briefly in the afternoon. In a further sign of progress, House Majority Leader Steny H. Hoyer (D-Md.) told representatives Sunday evening to be prepared to return to the Capitol on Wednesday to vote on an agreement.
The deal would add about $310 billion to the Paycheck Protection Program for small businesses, which was swamped by demand in the three weeks since Congress created 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 is out of money, too, Senate Minority Leader Charles E. Schumer (D-N.Y.) said on CNN.
The agreement would include $75 billion for hospitals and $25 billion for testing, which have been major Democratic demands. Some $60 billion in the new funding for the Paycheck Protection Program would be targeted specifically for smaller financial institutions to ensure loans for minority and lower-served areas, said people familiar with the plan who spoke on the condition of anonymity to describe it.
“We want to make sure that it’s reaching all of America’s small businesses,” House Speaker Nancy Pelosi (D-Calif.) said on ABC News. “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 Trump has increasingly blamed governors.
“We’re talking about a $25 billion federal program, money that can be used with the states with new technology to invest in testing,” Mnuchin said. How to structure the new spending for testing emerged as a final sticking point late Sunday, with Democrats favoring a national plan as the White House pushed for a state-driven approach, according to two people familiar with the talks, who spoke on the condition of anonymity to describe them.
Another major Democratic request — money for cities and states — was getting left out of the deal, although congressional aides cautioned that the agreement was not final.
Mnuchin said that he had been in close contact with GOP congressional leaders and that “we’re all onboard with the same plan.”
The $2 trillion economic rescue that Congress passed last month created the $349 billion Paycheck Protection Program, which allowed banks to issue taxpayer-backed loans to small businesses to help them weather the pandemic. The loans were supposed to go to businesses with fewer than 500 workers and would be forgivable if the companies kept workers on the payroll.
On Thursday, the White House said nearly all of the $349 billion had been committed, and the Small Business Administration 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 that a fraction of companies received the taxpayer assistance. The nation has 30 million small businesses, and many firms complained that 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 that amount would be sufficient.
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. That would be more than the entire $700 billion in bailout money approved during the 2008 financial crisis.
But that money had strict requirements regarding public disclosure of who received it. Under the current arrangement set up by Congress and the White House, it’s unclear whether the public will ever find out who received the new money. The White House has said businesses, nonprofit organizations, churches and affiliates of large companies can seek the money.
There have also been complaints that some of the small-business money has been claimed by relatively large companies such as Ruth’s Chris Steak House, applying through big banks and in some cases finding ways around the $10 million loan limit by having different subsidiaries each apply for that amount of money.
Responding to that criticism, Mnuchin said community banks have “done an extraordinary job” participating in the program, with 60 percent of the loans approved by banks with $10 billion or less in assets.
The new money for hospitals in the agreement 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 off staff members 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 that it was not the federal government’s job to make up for state budget shortfalls.
Trump said at his news conference that he supports addressing the needs of state and local governments but that “we will be saving that for another time.” After passing this interim measure with more money for small businesses, hospitals and testing, Congress is expected to turn its attention to another major rescue bill.
Lawmakers have been squabbling over the Paycheck Protection Program almost since the moment it rolled out on April 3, as it became immediately clear it would run out of money. Democrats infuriated Senate Majority Leader Mitch McConnell (R-Ky.) by refusing to agree to a straight funding increase without conditions, and negotiations stalled until finally picking up in recent days, with Democrats’ push for money for state and local budgets emerging as a red line for Republicans.
Maryland Gov. Larry Hogan (R), 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 funding for small businesses held up as lawmakers and the administration wrangle over states’ requests.
“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.
Massachusetts Gov. Charlie Baker (R) said on CBS News that additional funding for states will be necessary to meet Trump’s goal of reopening the economy.
“It’s important for the feds to support our efforts to fund the stuff we do,” Baker said. “If we’re laying off tens of thousands of people at exactly the time when they want to reopen the economy, we’re going to be swimming against the current they’re trying to create.”
The House and the Senate have been out of session since passing the $2 trillion Cares Act late last month, and some members have been reluctant to return to Washington en masse. In the Senate, leaders would like to pass the legislation by “unanimous consent” so that only a few members would have to be present for the proceedings, but any one senator could object and block that plan.
In the House, though, GOP lawmakers have indicated that they intend to demand a recorded vote that would require a majority of lawmakers to be present, leading Hoyer to notify lawmakers Sunday that they should be prepared to return to the Capitol. Democrats could use the forced vote as the moment for Pelosi to push a rules change allowing members to cast future votes by proxy, through other lawmakers in attendance. She could also try to push through the creation of a select committee to oversee implementation of the trillions of dollars allocated to fighting the virus through the Cares Act and other bills.
Mike DeBonis and Paul Kane contributed to this report.
