PPP Bill Falls Short in Senate as Hope for COVID-19 Aid Wanes
WASHINGTON – Amid ongoing COVID-19 economic aid negotiations and the approaching election, the Senate shot down on Tuesday a standalone measure authorizing a second round of forgivable loans to small businesses.
Republicans were unified in their attempt to push forward the bill while nearly all Democrats voted against the bill on a procedural vote that would have advanced the measure.
The bill would have given the Small Business Administration $258 billion for a second round of forgivable loans to coronavirus-afflicted small businesses through the Paycheck Protection Program.
Senate Majority Leader Mitch McConnell, R- Ky., accused Democrats, who passed a $3.4 trillion stimulus package out of the House in May and a $2.2 trillion package earlier this month, of playing politics with the PPP.
“The Democratic leaders have spent months holding out for a long far-left wish list of non-COVID-19 related priorities and restricting additional aid until they get it. All or nothing. All or nothing – that’s been their position,” McConnell said from the floor. “There’s no reason the second round of the Paycheck Protection Program should wait another single day.”
His Democratic counterpart, Senate Minority Leader Charles E. Schumer of New York, levied the same accusations against the GOP, saying Tuesday’s vote was aimed at providing vulnerable Republicans political cover from Congress’ inability to pass another comprehensive economic rescue package.
“The truth is, because the leader can’t pass anything on the floor, he is resorting to a series of political stunts,” said Schumer. “That’s all. Everyone knows it.”
With the unemployment rate more than double pre-pandemic levels, another aid package remains high on voters’ wish list. In a FT-Peterson U.S. Economic Monitor survey in September, 89% of likely voters said America needs another economic aid bill.
Things are growing dire for many Americans. Another FT-Peterson survey released Tuesday found 22% of likely voters had recently faced difficulties paying for groceries, and a recent Columbia University study estimated 8 million Americans have been forced into poverty since the economic aid programs enacted in March expired.
So far, polls suggest voters are holding both parties responsible for the lack of more economic support.
Rejection of the standalone PPP bill came as time ran down on House Speaker Nancy Pelosi’s self-imposed Tuesday night deadline to reach a pandemic-related aid deal with the White House.
Despite Trump saying he wants “a bigger number that she wants,” the talks have largely stalled over the issue of additional aid to state and local budgets decimated by the coronavirus.
McConnell said he’d bring it to a vote if Pelosi, D- Calif., reaches a last-minute deal with the Trump administration for a comprehensive package.
“If a presidentially supported bill clears the house at some point we’ll bring it to the floor,” he told reporters Tuesday.
But other GOP leaders in the Senate doubted their colleagues would be willing to support even the $1.88 trillion figure currently proposed by the White House, let alone the $2.2 trillion Democrats want.
“That’s a high number to me,” said Senate Appropriations Chairman Richard C. Shelby of Alabama. “It’s getting to be towards the last minute, and the clock keeps ticking away. I am not optimistic about us doing anything.”
The bill rejected Tuesday would have let small businesses apply for a second round of PPP loans. The legislation would provide $258 billion for second draw PPP loans, relocating $137 billion from unspent funds.
The second draw would be limited to businesses with fewer than 301 employees that suffered at least a 35% drop in revenues in one of 2020’s business quarters compared to the same quarter last year. Those firms would be eligible for a loan set equal to 10 weeks of payroll up to $2 million, which would be forgiven so long as it was used to cover payroll and certain fixed costs like rent, utilities, property damage costs, and coronavirus prevention measures like masks and plexiglass barriers.
The bill would also simplify the forgiveness application for both new and existing PPP loans under $150,000. The SBA shortened the forgiveness paperwork for loans under $50,000 earlier this month. Banks and credit unions, who effectively administer the loan program, have pushed to let even more borrowers use an easier forgiveness process. The measure would also retroactively expand the forgivable uses for the first round of PPP funds, which totaled $525 billion across 5.2 million loans.
FiscalNote, the parent company of CQ Roll Call, received a PPP loan.
The Senate on Wednesday is expected to consider a more expansive _ but still “skinny” _ package that would provide larger unemployment benefits, more than $100 billion for schools, and more money for virus testing, tracing and vaccine development and distribution. That bill, released Monday, seemed nearly identical to a similar $650 billion measure the Senate declined to advance last month. More than half the money, or $350 billion, would be offset by rescissions of unspent funds.
Democrats found support for their recalcitrance on Tuesday’s standalone PPP measure.
“The Paycheck Protection Program didn’t work for restaurants in March and it won’t work now,” the Independent Restaurant Coalition said in a statement calling for the passage of a $120 billion grant program for bars and restaurants that House Democrats included in the $2.2 trillion package passed earlier this month.
Marc Morial, president of the National Urban League, took to Twitter to call Tuesday’s proposal “an insult to Black small business owners left behind in the pandemic.”
“They need real relief, now, and McConnell’s feeble response doesn’t even come close,” he wrote.
David Lerman and Jennifer Shutt contributed to this story.
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