The $349B Small Business Financial Assistance Fund Runs Dry as Legislators Disagree on Next Round of Relief
The Hill reported today that the $349 billion set aside for small businesses affected by the COVID-19 pandemic is gone, as legislators battle over plans to secure more funding for the cause.
The Treasury Department and Small Business Administration have reportedly gone through all of the funding allotted for the Paycheck Protection Program to provide forgivable loans to small businesses working to keep employees on payroll and keep their doors open after the pandemic subsides.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” the SBA said in a statement, according to The Hill. “Similarly, we are unable to enroll new PPP lenders at this time.”
The funds set aside for the Economic Injury Disaster Loans, totaling $10 billion, are also gone. This financial stockpile was set up to give businesses loans of up to $2 million each, with a $10,000 advance. All of these programs were set up as part of the $2.2 trillion stimulus package passed just one month ago. In that time, demand for PPP funds skyrocketed.
Treasury Secretary Steven Mnuchin and SBA administrator Jovita Carranza are working with Congress to authorize more funding. Until that happens, banks won’t be able to sign off on additional loans under the program.
“We urge Congress to appropriate additional funds for the Paycheck Protection Program … at which point we will once again be able o process loan applications, issue loan numbers and protect millions more paychecks,” the two said in a statement.
Senate Majority Leader Mitch McConnell tried last week to pass legislation that would provide an extra $250 billion to the small business program. Congressional Democrats responded by trying to add $100 billion for hospitals, and $150 billion for state and local governments to fund food assistance programs. Sen. McConnell blocked that amendment.
Taking his frustrations to Twitter, McConnell passed the blame on House Speaker Nancy Pelosi and the Democrats for holding the money hostage.
Republicans tried to pass more money for Americans’ paychecks last week. Democrats blocked it. Speaker Pelosi said she saw “no data as to why we need it." She said "we have time to negotiate.”
Democrats did nothing and now the program has shut down. https://t.co/MSwJAEybO4
— Leader McConnell (@senatemajldr) April 16, 2020
“The cost of continued Democratic obstruction will be pink slips and shuttered businesses,” McConnell added in a statement with House Majority Leader Kevin McCarthy. “We hope Democrats see reason soon and finally heed Republicans’ repeated call for a funding bill that can quickly earn unanimous consent from all 100 senators and become law.”
In response, Pelosi and Senate Minority Leader Chuck Schumer asked McConnell and the Republicans to stop “posturing” and come to the negotiations table.
That seems to have happened, actually. According to the Hill, Sen. Doug Jones said that Schumer and Mnuchin had made “a fair amount of progress” toward an agreement that would secure funds for the programs while including financial backing for public well-being programs like food assistance and health care.
They haven’t reached an agreement yet, but the Senate is scheduled to be in session this afternoon, and something could come from that. Otherwise, the next opportunity would be in the House tomorrow or next week.