Democrats Balk at Small Business Bill as Hospitals Exhaust Supplies

WASHINGTON (CN) — Blocking the Senate’s commitment of $250 billion in new funding for small businesses shuttered during the Covid-19 outbreak, Democrats labeled the move Thursday by Majority Leader Mitch McConnell a political stunt.

Senate Majority Leader Mitch McConnell of Ky., center, speaks with reporters outside the Senate chamber on Thursday. (AP Photo/Patrick Semansky)

The bill McConnell brought to the floor while Congress is still in recess needed a unanimous vote to pass. A Kentucky Republican, the majority leader claimed the $350 billion Paycheck Protection Program was out of money just a week after it was launched. 

“Do not block emergency aid you do not oppose just because you want something more,” McConnell said from the Senate floor in a mostly empty chamber.

House Speaker Nancy Pelosi said Wednesday that McConnell’s bill would never draw the unanimous support needed to pass the House. Together with Senate Minority Leader Chuck Schumer, the California Democrat is instead focused on approving an additional $100 billion to provide health care workers with critically needed equipment.

Saying the Republican bill was “out of the question,” Pelosi told reporters on a call Thursday afternoon that the legislation was a basis for negotiations but that “it would never pass the House by unanimous consent.”

The speaker said McConnell pulled a stunt on the Senate floor by trying to bring the additional $250 billion to a vote — responding to a request from Treasury Secretary Steve Mnuchin for Congress to provide the massive cash dump in 48 hours — without the data to support it as a top priority.

“What we want to do is to make sure that it is done in the best way for the most people,” Pelosi said, stressing that Congress is dealing with “a lot of money” and “a tremendous amount of need.”

Democrats had criticized McConnell’s bill for its lack of measures to ensure the inclusion of businesses in disadvantaged communities, while also saying the priority should be funding personal protective equipment and ventilators for hospitals that have been overwhelmed with waves of patients suffering from Covid-19, the respiratory disease caused by the novel coronavirus.

Democrats, in their own move to expedite financial safety nets to small businesses, have proposed passing an additional $60 billion to start up community-based financial institutions that can provide microloans to businesses being turned down by the banks.

Senator Chris Van Hollen said McConnell’s bill departed from the bipartisan cooperation that marked negotiations on the last three coronavirus response bills.  

“This was in fact designed to fail, designed as a political stunt,” Van Hollen, a Maryland Democrat, said from the Senate floor.

Pelosi later echoed that concern, telling reporters Thursday that Republicans and Democrats, together with the White House, have built a bipartisan framework in the last month to continue working effectively in response to the Covid-19 outbreak. 

Just a day earlier, the Department of Health and Human Services confirmed that the Strategic National Stockpile has nearly been tapped dry. Records released by the House Oversight and Reform Committee show that about 90% of the personal protective equipment, including N95 masks, face shields and gowns, has been distributed to state and local governments.

“We’ve heard from our health care providers that they’re ready to close the doors,” Maryland Senator Benjamin Cardin said. “They need immediate help and a lot more than the 100 billion that’s been provided.”

A medic reacts Saturday after stepping outside of the emergency room at Elmhurst Hospital Center in Queens, New York. (AP Photo/Mary Altaffer)

The top Democrat on the Senate Small Business and Entrepreneurship Committee, Cardin accused McConnell from the Senate floor of ignoring significant flaws in the CARES Act that need to be worked out so the Small Business Administration can provide immediate relief. 

Whereas the Paycheck Protection Program has so far distributed just one-third of its total funding in loans, Cardin said there is no money left in the program called Emergency Economic Injury Disaster Loans, which provides an advance of up to $10,000 to be distributed within three days as part of the coronavirus response bill.

Congress appropriated just $10 billion to Emergency Economic Injury Disaster Loans, which has now drawn 3.5 million requests from small businesses seeking $11 billion in loans.

“SBA cannot release those funds in three days because they don’t have the money to do it again,” Cardin said, adding: “The majority leader does not provide that money so that those small businesses can get that cash.”

Program funds are rapidly draining. While businesses are on average requesting $200,000 loans, the Small Business Administration is able only to issue $15,000. 

Calling on McConnell to rejoin negotiations with Democrats, Cardin said the misalignment in critical cash flows and the federal response is “an urgent need that we should deal with today. And we’re prepared to deal with it.”

The Democrat also called out McConnell for not working across party lines to address that the Small Business Administration has seen only a 10% increase in banks willing to distribute loans to small businesses hard hit by Covid-19 since passing the legislation last month. 

“We’ve got to do a better job of reaching these underserved communities so that the small business that doesn’t have that type of relationship with a bank can still participate in the paycheck protection plan,” Cardin said. 

Pelosi reinforced the urgency expressed by Cardin later Thursday, saying that — because the measures in the CARES Act to help lenders support small business are done on a first-come, first-served basis — many companies without banking relationships are left behind. 

“Let’s help everybody here,” the speaker said. “Let’s help the banks do what they’re there to do, and let’s call upon some of our community development financial institutions to do what they can do to help many rural and small businesses.”

But McConnell said he was asking for a small change, crossing out $350 billion to write $600 billion in the bipartisan legislation. But both Cardin and Van Hollen pointed out that Democrats had anticipated the Paycheck Protection Program would see high demand and had proposed funding it to the tune of $600 billion originally.

“Yes, we do need additional money, we know that,” Van Hollen said. “But equally important, let’s fix some of the kinks, and there are kinks in this program.”

Democrats also stress, however, that before tackling the economic crisis, Congress must first prioritize fully funding medical responders on the frontlines. 

An internal government watchdog confirmed last week that dwindling supplies in hospitals — everything from N95 masks and ventilators, to linens and cleaning supplies — is putting doctors, nurses and patients at severe risk. 

Reminding of the need to flatten the curve, Van Hollen said that all of the health care equipment requests are urgent and should be addressed as the best way to get on the road to economic recovery. 

“If the majority leader would just take a moment, instead of trying to rush this through, we could actually get it done,” the Maryland Democrat said. 

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