The Small Business Administration’s Paycheck Protection Program exhausted the $350 billion for small-business loans Thursday, and efforts to add $250 billion to the pool appear to have stalled.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” a message on the program’s page on the SBA website notes, providing a link to enhanced debt relief under other SBA programs.
Senate Majority Leader Mitch McConnell, R-Ky., said in a Wednesday afternoon statement that the PPP would “exhaust its funding in a matter of hours. It will have to stop accepting applications for job-saving loans.”
Democrats, McConnell said, “have spent days blocking emergency funding for Americans’ paychecks and now the bipartisan program has run dry.”
Democrats insist on $250 billion more for state and local governments, hospitals and food stamps, Greg Valliere, chief U.S. policy strategist for AGF Investments, said in his Thursday morning briefing. “Republicans want only the $250 billion for small businesses, and neither side has budged.”
Treasury Secretary Steven Mnuchin could eventually iron out a compromise, Valliere said, “but a lone dissenter could block unanimous consent, requiring members of Congress to return to Washington.”
“The cost of continued Democratic obstruction will be pink slips and shuttered businesses,” McConnell added. “We hope Democrats see reason soon and finally heed Republicans’ repeated calls for a funding bill that can quickly earn unanimous consent from all 100 senators and become law.”
Valliere added that “Incredibly, funding for small businesses will run out, and state governments face a dire revenue shortage. If you’re hoping for a V-shaped recovery, this is a major concern.”
In a statement issued Wednesday, House Speaker Nancy Pelosi, D-Calif., signaled a reluctance to budge. “Democrats know that in order for the Paycheck Protection Program to succeed, it must work for everyone. That is why we have been asking for the administration to work with us to help:
- the underbanked small businesses and others who are struggling to access the PPP;
- desperate state and local governments;
- hospitals on the front lines of the epidemic.
“As has been clear since last week, Republicans’ bill which fails to address these critical issues cannot get unanimous consent in the House.”
During a Thursday morning press call, Pelosi said that a meeting would be held this afternoon regarding the negotiations. “We hope the administration would recognize those needs” of the state and local governments and hospitals, she said. “We’re hopeful they will come back with something that strikes a balance. Again, we don’t have any disagreement in helping small businesses.”
Rep. Don Beyer, D-Va., vice chair of the Joint Economic Committee, tweeted that “PPP has big problems, just throwing more money at it without policy fixes, as McConnell proposes, will leave thousands of small businesses hurting.”
Beyer added that “It also won’t fix the huge problems with SBA’s EIDL disaster loan program,” which is running weeks behind in providing emergency grants.
Ed Mills, policy analyst for Raymond James, told ThinkAdvisor in a Thursday morning email that “the SBA emergency loan program is also out. So just increasing the PPP funding does not solve the issues facing small businesses.”
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