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GOP, Democrats in Standoff Over Boosting Small-Business Aid

April 9, 2020, 5:07 PM

Senate Democrats blocked Majority Leader Mitch McConnell’s attempt to quickly pass a $250 billion boost in funds for 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.

“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 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.

“It’s beyond disappointing that Senate Democrats would choose to block our efforts to provide more emergency relief to small businesses,” White House spokesman Judd Deere said.

Pelosi told reporters in a conference call that McConnell knew his proposal would fail.

“We want to make sure it is done in the best way for the most people,” Pelosi said. “We have time to negotiate to see how and where and when we should have more money there.”

Plea for Urgency

There have been complaints of bigger banks only dealing with their existing customers.

Over the past week, borrowers said they were turned away by banks when they didn’t already have a lending account. Banks have been wary about hastily approving loans for new customers and blame time-consuming federal rules requiring them to verify customer identity to catch terrorists and money launderers.

Self-Employed Set to Join Virus Plan Already Overrun With Demand

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 signaled she had no intention of bringing McConnell’s proposal to the House.

It could be harder for the House to get unanimous support for virus-related aid, since some Republicans say members should have to go on record with their votes to spend taxpayer money. Pelosi said House leaders are considering voting by proxy or other measures to protect members from having to risk virus infection by traveling to Washington.

”I will be very frank with you. We don’t want anybody coming back at a time that might not be healthy for them,” said Pelosi.

‘Bipartisan Fixes’

The Payroll 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.”

(Updates with comment from White House, Pelosi starting in sixth paragraph)

--With assistance from Billy House and Josh Wingrove.

To contact the reporters on this story:
Laura Litvan in Washington at;
Steven T. Dennis in Washington at

To contact the editors responsible for this story:
Joe Sobczyk at

Laurie Asséo, Anna Edgerton

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