Congress Reaches Deal On New Coronavirus Small Business Loan Package

WASHINGTON ― After nearly two weeks of partisan blame games, Republicans and Democrats in Congress announced a deal on Tuesday that would replenish the new loan program for small businesses struggling from the coronavirus pandemic.

On top of $310 billion for small business loans, the tentative agreement would also provide $75 billion for hospitals, $60 billion for economic disaster loans, and $25 billion to expand coronavirus testing. Despite President Donald Trump’s claim that “anybody that wants a test can get a test,” the United States has continually lagged behind other countries in testing.

Democrats had insisted on getting more than just a replenishment of money for small businesses in this round of coronavirus relief, which lawmakers are calling “Phase 3.5.” The hospital funding, increased money for testing, and economic disaster loans were all important Democratic priorities.

But Democrats didn’t get some key elements they wanted in this round of aid. The new deal does not include a boost to food benefits for the financially needy, nor does it provide additional aid to city and state governments who have taken on billions in debt amid the stalled economy

“We will fight for that [in the next bill] very strongly,” Senate Minority Leader Chuck Schumer (D-N.Y.) said Tuesday on MSNBC.

But at $480 billion, the “interim” coronavirus relief package is nearly twice as large as Republicans initially proposed. And despite already passing three bills related to coronavirus relief ― this would be the fourth ― congressional leaders are already saying there will need to be an even larger response measure in the coming weeks.

Congress created the Paycheck Protection Program, a $350 billion anti-layoff initiative, as part of last month’s $2.2 trillion Coronavirus Aid, Relief and Economic Security Act. The program was open to any business with fewer than 500 employees, provided they keep workers on their payroll. Dozens of large publicly owned companies and some restaurant chains were also approved for loans, however, prompting bipartisan criticism of the program on Capitol Hill.

Republicans excoriated Democrats for blocking quick action to approve more funds to the program, which ran dry and ceased functioning last week.

“It is absolutely surreal to see Democratic leaders treat support for workers and small businesses as something they need to be goaded into supporting,” Senate Majority Leader Mitch McConnell (R-Ky.) said last week.

But Democrats held firm and prevailed in their demands that new funds be reserved for minority communities and businesses that didn’t have prior relationships with lenders. Under the terms of the agreement, $60 billion will be set aside for lending institutions with assets under $50 billion such as community banks ― and $30 billion of that money is set aside for banks with less than $10 billion.

It’s an open question, however, whether the concessions Democrats won will be enough for some progressives.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) said Monday she would not support the bill, though she may still change her mind after seeing the actual deal. And Progressive Caucus co-chair Pramila Jayapal (D-Wash.) said liberals in Congress had “real concerns” about giving away leverage on this deal without addressing issues like relief for state and local governments.

Still, the measure should garner broad bipartisan support and pass easily.

The Senate passed the bill on Tuesday under a unanimous consent request. And the full House could take action on the package as early as Thursday, sending it to Trump’s desk for his signature. (Rep. Thomas Massie (R-Ky.) has signaled that he will insist on a recorded vote, requiring at least half of House lawmakers to be in town to vote.)

Banks, meanwhile, are warning lawmakers that the program will be quickly exhausted even with the new injection of funds ― perhaps only in a matter of days.

“This is going to go within, at most, 72 hours,” said Consumer Bankers Association President Richard Hunt, who represents large banks. “But the odds are more like 48 hours.”