Congress Passes Expanded Small-Business Loan Funding to Address Coronavirus Shutdowns
WASHINGTON — With unemployment claims topping 26 million in the last five weeks because of 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 388-5, 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-Calif., 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-Calif., 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 soon 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 Association. 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 vote-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 health care 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 holder 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.”
©2020 Los Angeles Times
Distributed by Tribune Content Agency, LLC.
In The News
WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell last week to a new low point since... Read More
WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell last week to a new low point since the pandemic erupted, evidence that layoffs are declining as companies hold onto workers. Unemployment claims dropped 6,000 to 290,000 last week, the third straight drop, the... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about countertops. “If you can’t get the cabinets, you can’t put the countertops on,” Fowke said as he testified on behalf of the National Association of Home... Read More
WASHINGTON (AP) — Gina Raimondo only wears watches made by Bulova — a company that laid off her scientist father,... Read More
WASHINGTON (AP) — Gina Raimondo only wears watches made by Bulova — a company that laid off her scientist father, closed its Rhode Island factory and moved production to China in 1983. The watches give Raimondo, the U.S. commerce secretary, a sense of mission as President... Read More
WASHINGTON -- They’ve almost become as ubiquitous as scenes of weathermen and women leaning into the fierce winds of a... Read More
WASHINGTON -- They’ve almost become as ubiquitous as scenes of weathermen and women leaning into the fierce winds of a tropical storm during hurricane season. We refer, of course, to the daily television news footage of a reporter bobbing up and down in a decidedly modest... Read More
WASHINGTON (AP) — Inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance... Read More
WASHINGTON (AP) — Inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010. The Labor Department reported Thursday that the monthly increase in its producer price index, which measures inflationary... Read More
WASHINGTON -- In an ideal economy, the nation’s supply chains work something like this: raw materials, finished products and ready-to-assemble... Read More
WASHINGTON -- In an ideal economy, the nation’s supply chains work something like this: raw materials, finished products and ready-to-assemble merchandise like cars and trucks flow into the nation’s ports. The largest of these ports, those blessed to sit on deep-water harbors, typically have rail tracks... Read More