As the Paycheck Protection Program was set to expire Tuesday at midnight with about $135 billion unspent, Treasury Secretary Steven Mnuchin told a House panel that the Treasury supports legislation to “repurpose” those funds and has been in talks with the Senate’s small-business committee about how to proceed.
Less than four hours before that deadline, the Senate passed an extension of the program to Aug. 8.
That bill now has to pass the House and be signed by the president to take effect. The House had previously passed a bill that would have extended the program to the end of the year, but the Senate didn’t take it up.
Mnuchin told the House Financial Services Committee on Tuesday afternoon that the leftover PPP funds should be used by businesses whose “revenues have dropped significantly” in the economic crisis caused by the COVID-19 pandemic, like “restaurants and hotels and others where it is critical to get people back to work.” He said he looked forward to working with the House and Senate to pass legislation by the end of July.
According to The Washington Post, Sen. Marco Rubio, R-Fla., chair of the Senate Small Business and Entrepreneurship Committee, has drafted legislation that would provide $25 billion to businesses with fewer than 10 employees and prevent hotel and restaurant chains from receiving more than $2 million.
Sen. Ben Cardin, D-Md., the ranking member on that committee, along with Democratic senators Jeanne Shaheen of New Hampshire and Chris Coons of Delaware, has introduced a competing bill that would provide new PPP loans to to small businesses with 100 employees or fewer, including sole proprietorships and self-employed individuals, who have already used up funds from a first PPP loan or are on the verge of doing so and have suffered a drop in revenue of 50% or more due to the pandemic. A companion bill has been introduced in the house.
Cardin is the author of the bill that passed the Senate on Tuesday night.
At the House Financial Services hearing on Tuesday afternoon, Rep. Nydia M. Velázquez, D-N.Y., who chairs the House Small Business Committee, asked Mnuchin why he was talking with the Senate and not the House on extending the PPP. “Nothing will move unless we have those conversations,” she said.
She said she could not determine how the program should proceed until her committee has received data about disbursements to date. Mnuchin said he could provide that information, and she asked that he appear before her committee, which had been requested previously.
“We need to know if the program has worked as intended by Congress,” Velázquez said. “No one should get a second loan unless businesses who are struggling first get a chance to get a loan.”
Mnuchin told the House Financial Services Committee in his opening remarks that as of June 27, 4.8 million small businesses had received loans totaling $519 billion, supporting an estimated 50 million jobs.
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