After torpedoing a Thursday vote to increase small-business funding under the Paycheck Protection Program, Senate Democrats proposed an interim coronavirus relief package that they argue will address the “immediate issues” facing local and state governments, hospitals and small businesses.
Sen. Ben Cardin, D-Md., said Thursday on the Senate floor that Senate Majority Leader Mitch McConnell, R-Ky., and the Trump administration proposed additional appropriations via an interim solution “solely” for the Paycheck Protection Program, created by the Coronavirus Aid, Relief and Economic Security (CARES) Act.
McConnell sought a unanimous consent vote on $250 billion in additional funds for the PPP, indicating it has run out of money, Cardin said. “It hasn’t. Thirty percent has been committed, but the funds have not been released.”
Programs that are running dry under the CARES Act include the Emergency Economic Disaster Loan (EIDL) Program. In addition to loans, the program provides emergency grants up to $10,000 for small businesses, Cardin said.
“The Small Business Administration needs money today in order to process EIDL applications; the SBA doesn’t need money today to process applications for the Paycheck Protection Program,” Cardin stated.
Senate Democrats’ plan would provide $15 billion for EIDL.
Private Equity Wants PPP Loans, Too
Rep. Josh Gottheimer, D-N.J., wants the “affiliate rule” that prevents certain private equity and venture capital backed firms from receiving Paycheck Protection Program loans under the stimulus law to be waived.
“I think the regulations that make sense in normal times need to be examined … when we’re in a crisis, and whether they’re serving their intended purpose or inhibiting relief that needs to get out,” Gottheimer, a member of the House Financial Services Committee who also co-chairs the bipartisan Problem Solvers Caucus, stated on a Thursday webcast held by the federal policy team at BakerHostetler in Washington.
He emphasized the he led a bipartisan letter to Treasury Secretary Steven Mnunchin and the Small Business Administration stating that the affiliate rule should be waived.
Private equity firms have warned the White House that their exclusion from the stimulus bill could force them to lay off millions of workers in order to protect their own investments, The Financial Times reported. Some Democrats have argued that private equity firms should support the companies with their own cash, but House Speaker Nancy Pelosi has said that the current rules will shut many startups out of the loan program.
Gottheimer added on the Thursday webcast that McConnell’s push failed because “many of us think more money for states and for our hospitals” should be included in another interim stimulus round, “not just PPP because our hospitals are really hurting and they’re spending a lot of money — we need to keep them up.”
Gottheimer added: “There’s a CARES 2 that’s coming; … There’s just a huge demand in our resources for hospitals right now. We’ve done some things to help advance some dollars for them, but we know that they’re going to face very difficult economic times, and already are, in terms of their budgets.”
As to when a phase four stimulus plan could likely get passed, Gottheimer said there “might be a couple salvos back and forth like when we were working on the first CARES package; and frankly we worked on our first two emergency responses, which ended up being bipartisan, but there was a day of negotiating that goes on; you have to have a couple false starts before you get to the finish line. We all recognize we have to get these resources out the door quickly.”