Senate Republicans on Thursday will try to approve an increase in funding for a small business loan program set up to deliver relief amid the coronavirus crisis, but Democrats are likely to object if their demands for additional funding for hospitals and state and local governments are not met.
Rollout of small business loans marred by glitches
Senate Majority Leader Mitch McConnell made clear Wednesday evening that he would move ahead with an attempt to pass the funding increase, despite the fact that no bipartisan deal had been announced to stave off an impasse.
“Tomorrow morning, I’ll ask unanimous consent to pass standalone emergency funding for the hugely popular Paycheck Protection Program that is saving small-business jobs as we speak. As the rest of the CARES Act continues to come online, this key part is already low on funds,” McConnell tweeted.
The unanimous consent request is expected to fail and Democrats are expected to offer an alternative which will also most likely be blocked. The pro forma session of the Senate will take place at 10 a.m. ET.
After launching the program less than a week ago, the Treasury Department asked Congress on Tuesday for another $250 billion for the Paycheck Protection Program, a federally-backed loan program intended to help business owners keep their enterprises afloat amid the global pandemic. The rollout has been far from smooth, and with so many applications coming in, Treasury is asking for more money now in an effort to assure business owners waiting in line that the money will be there.
But Senate Democrats — who unanimously backed the program when it passed last month — argue any legislation to increase funding for Small Business Administration loans must include other provisions as well, including money for hospitals on the frontlines of combating coronavirus and $150 billion in funding for states and local governments. Democrats have also asked that half of the money for SBA — $125 billion — be steered to community lenders to ensure underserved communities are getting loans.
Despite a flurry of conversations on Wednesday, including talks between Treasury Secretary Steve Mnuchin and Senate Minority Leader Chuck Schumer, there was no indication a deal had been reached.
Lawmakers are back in their home states on recess as the pandemic sweeps across the country and, as a result, any effort to greenlight additional funding for the loan program would need to take place by unanimous consent, which can be blocked if any senator objects, or by a voice vote, which would not require all members to be present.
McConnell, a Kentucky Republican, said earlier in the week that he hoped to approve a funding increase during the next scheduled session of the Senate on Thursday.
In one indication of continued disagreement between Senate Republicans and Democrats, Sen. Marco Rubio, a GOP senator from Florida and the chairman of the Small Business Committee, issued a statement rejecting the idea of guaranteeing money would go to specific lenders.
For Democrats, there’s pressure to back the Small Business Administration program that, despite a rough start, has seen widespread participation. In a call with Republicans, Mnuchin touted that $90 billion in loan applications had been approved and another $100 billion was being processed.
But Democrats are not the only ones with concerns. Republicans and Democrats alike have voiced frustrations with the program’s glitches including the fact that many lenders were waiting days to get final guidance on how to disburse the loans. On Monday, the portal lenders use to upload loan application information to the SBA crashed. And several members have reported frustrations from small business owners who struggled to find a lender willing to offer them a loan if they were not already an existing customer.
“If you don’t fix what is fundamentally wrong with the program, throwing more money after bad is not going to help small businesses,” Rep. Stephanie Murphy, a moderate Democrat from Florida, told CNN about frustrations she’s been hearing from constituents. “We have to try to make the changes be a condition of handing over another quarter of a trillion dollars.”
If the Senate is able to pass an increase in funding, the measure would next need to go to the Democrat-controlled House.
Rep. Thomas Massie, a Kentucky Republican, indicated on Wednesday that he would oppose any attempt to pass new funding for small business loans through the House by unanimous consent or voice vote, a threat that follows his previous objection to quick passage of a $2 trillion stimulus deal and that could complicate any efforts to move a funding increase through the House — even if a bipartisan deal is reached.