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Senate Inks Small Business Loan Deal After Delays

Congressional Democrats and the Trump administration reached agreement Tuesday to put hundreds of billions of dollars into a small business loan program while also funding testing and hospitals amid the coronavirus pandemic.

Though the agreement has finally passed the Senate, the House still needs to vote on it, possibly in person, which would come with an extra wait.

The Dirksen Senate Office Building. (Photo by JACK RODGERS/Courthouse News Service)

WASHINGTON (CN) — After lengthy negotiations between the White House and congressional Democrats, the Senate approved a more than $480 billion package to replenish a federal small business loan program and provide money for hospitals and testing amid the coronavirus pandemic.

"This is a significant package," Senate Majority Leader Mitch McConnell said on the Senate floor Tuesday afternoon. "It does just what I outlined the evening we passed the CARES Act, back in March. The Senate is continuing to stand by the American people watching the CARES act go into effect and adding funding when necessary to keep programs that are working well."

The Senate unanimously passed the legislation in a pro forma session this afternoon. House leadership has told members a vote could come in the House as soon as Thursday and that lawmakers may have to return to Washington to pass the legislation. 

President Donald Trump has said he supports the legislation.

As outlined by McConnell, the package tallies to approximately $480 billion. The main provision in the deal is more than $310 billion in new funding for the Paycheck Protection Program, a federal initiative that gives small businesses loans that can be forgiven if companies use the money to cover certain expenses like payroll, rent and utilities. The administration had initially requested $250 billion to replenish the program.

The program last week ran out of the $350 billion it received in a $2.2 trillion coronavirus economic response package, and Republicans sought to replenish the program as a standalone measure. But Democrats blocked the effort as they held out for additional money for hospitals and other initiatives including a national testing program.

As of Friday, when the program stopped approving new loans due to lack of funding, the Paycheck Protection Program had approved more than 1.6 million loans for a total of $342 billion. More than 75% of those loans were for $150,000 or less, though there has been widespread outrage over large publicly traded companies and restaurant chains like Shake Shack and Ruth's Chris Steakhouse receiving loans under the program. 

Under the bill, a portion of the new loan authority will be set aside specifically for smaller lenders. The legislation will separately allocate $60 billion for Economic Injury Disaster Loans, another federal loan program that has run out of money during the pandemic.

In addition to the small business funding, the legislation will send roughly $75 billion to hospitals and pump $25 billion into a testing program.

Senate Minority Leader Chuck Schumer said Tuesday the testing program was the last sticking point in negotiations over the legislation, but that Democrats and Trump administration locked down an agreement after midnight.

Though McConnell criticized Democrats for holding out for provisions that Republicans never truly opposed, Schumer said the additional funding his party included in the legislation are significant.

"This legislation is significantly better and broader than the initial proposal offered by the Republican leader," Schumer said on the Senate floor.

Absent from the final agreement is additional funding for state and local governments, which Democrats initially demanded when objecting to the original Republican plan. Schumer said that funding will be a necessary part of a next round of coronavirus funding.

Congress is out of town until at least the beginning of May due to the pandemic, meaning no legislation can pass without unanimous support. While that is expected to happen in the Senate, House Majority Leader Steny Hoyer told members on Monday night that some House Republicans will likely object to a voice vote on the legislation, a move that would force lawmakers to approve the measure in person at the Capitol.

Representative Thomas Massie, R-Ky., did just that for the $2.2 trillion economic package that passed Congress last month, causing members to fill the gallery above the House floor so they could maintain social distancing while passing the bill.

Hoyer also told members the House is expected to consider a measure allowing for remote voting when it comes in to pass the new funding package. 

Senators Rand Paul and Mike Lee, both Republicans, expressed frustration that Congress remains out of session but nevertheless presses forward with unprecedented amounts of spending.

"We should not be passing major legislation, especially legislation providing nearly a half trillion dollars in new spending without Congress actually being in session," Lee said on the Senate floor. "Without members actually being here to debate, discuss, amend and consider legislation and vote on it individually, rather than on an absentee basis, rather than by delegating that power to someone else."

Categories / Business, Financial, Government

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