Congress passes expanded small-business loan funding to address coronavirus shutdowns
With unemployment claims topping 26 million in the last five weeks due to the coronavirus pandemic, the House voted Thursday to approve another half-trillion dollars in federal relief to replenish a depleted small-business loan program and provide money for hospitals and testing.
The bill includes $310 billion for the Paycheck Protection Program, which offers forgivable loans to small businesses that keep workers on the payroll during the economic shutdown caused by the pandemic.
The program exhausted its original $349 billion last week, but efforts to immediately boost funding stalled as Democrats and Republicans bickered over what else to include. An agreement was reached early Tuesday and the Senate passed it by voice vote that day.
With approval by the House by a vote of 388 to 5, with one member voting present, the measure now heads to the president, who has vowed to sign it. “This bill helps small businesses keep millions of workers on the payroll,” Trump said.
With the latest bill, Congress will have approved more than $2.5 trillion to assist Americans, shuttered businesses, hospitals, vaccine researchers and others fighting the pandemic. And discussions are already underway about what more needs to be done. The House and Senate are currently scheduled to return May 4.
Thursday’s bill included $75 billion in emergency funding for hospitals and $25 billion to increase testing and contact tracing. It also requires the Trump administration to create a national testing plan, a move medical experts insist will be necessary before state governments can allow businesses to resume activity. It orders states and the federal government to collect demographic data on those who have fallen ill.
House Speaker Nancy Pelosi (D-San Francisco) said Thursday the government needs the scientific data to combat the health crisis. “We must make our decisions in that way,” she said.
The bill also sets aside $60 billion in the Paycheck Protection Program to be lent by smaller banking institutions, such as credit unions, in an attempt to increase the number of loans going to very small businesses or businesses without an existing relationship with a bank. That includes female- and minority-owned businesses that complained they were shut out of the initial round of funding.
Following widespread criticism that large, publicly traded companies received tens of millions of dollars in loans in the first tranche of Paycheck Protection Program funding, the Treasury Department on Thursday updated its guidance on who should use the program.
It warned that companies that received money should be prepared to certify that the government loan was necessary to continue operations. Otherwise those companies should return the money by May 7 or face penalties, the department said.
“It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith,” the guidance now states.
“If there is anybody out there that misuses this program, that takes advantage of a situation [in which we were trying to release money quickly] and it was not intended for you, we will find you. Give the money back,” House Majority Leader Kevin McCarthy (R-Bakersfield) said in a news conference Wednesday.
Thursday afternoon, high-end chain Ruth’s Chris Steakhouse announced it would return the $20-million loan it received, following on the heels of a similar announcement earlier in the week by hamburger chain Shake Shack.
The Capitol has been largely shuttered for weeks, with members working remotely.
For the first major House floor activity in weeks, dozens of members wore face masks Thursday. Gloves, hand sanitizer and extra masks were available outside the chamber. Members voted in eight groups of 60, divided in alphabetical order, with the scheduled 10-minute vote lasting over an hour.
Floor action paused for 30 minutes between votes so orange-gloved staff could sanitize surfaces within the chamber, including microphones and banisters in the empty tourist galleries. On the floor, staff members enforced social distancing, ordering members to stay four seats away from each other in a cavernous room that normally bustles with up to 435 back-slapping, deal-wheeling representatives at a time.
Representatives also voted to create a new oversight committee to monitor how the administration spends the money Congress has provided to address the pandemic.
Next Congress will turn its attention to what is already a deeply partisan fight over what is expected to be a fifth bill to address the economic effects of the coronavirus.
Democrats want to make funding for state and local governments a priority in the bill, pointing to the huge financial hit local governments have taken in responding to the virus and meeting the surge in demand for other state benefits, such as unemployment. The nation’s governors say they will need about $500 billion.
But Republicans want to hit the brakes on the congressional spending spree.
It is “time to begin to think about the amount of debt we’re adding to our country and the future impact of that,” Senate Majority Leader Mitch McConnell (R-Ky.) said in the Capitol earlier this week. “Until we can begin to open up the economy, we can’t spend enough money to solve the problem.”
He also pushed back on the idea of providing a “bailout” to states, saying that many are cash-strapped because of heavy pension burdens, not necessarily the coronavirus. In an email to reporters, his team dubbed them “blue state bailouts.”
“We all have governors, regardless of party, who would love to have free money,” McConnell said, suggesting that laws be changed to permit states to apply for bankruptcy, if they need.
Several Republicans blasted McConnell’s comments, including Maryland Gov. Larry Hogan, a Republican and chair of the bipartisan National Governors Assn. Rep. Peter King (R-N.Y.) called McConnell’s position “shameful and indefensible,” dubbing him the “Marie Antoinette of the Senate.”
Rank-and-file Democrats have already put together a list of other proposals in the bill, including funding to increase voting by mail for the November elections, money to prop up the faltering U.S. Postal Service, hazard pay or other support for essential workers such as healthcare providers and grocery clerks, and support for media companies suffering from a dearth of advertising.
Progressives have rallied around a proposal to provide $2,000 checks to individuals each month until the pandemic ends.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) told reporters this week that the $1,200 stimulus checks rolling out from the Treasury Department now are just a “crumb” for people in her district, which she said potentially has the most COVID-19 cases in the country. She said Democrats need to hold firmer ground in the upcoming negotiations.
“We cannot bow to the logic that a dime and a crumb is better than nothing,” she said. “We need to be able to play hardball so that working families can get the meaningful help that they need.”
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