Congress, Trump Administration Near Deal on Coronavirus Aid to Small Businesses

Source: By Andrew Duehren, Wall Street Journal • Posted: Monday, April 20, 2020

Agreement also would include aid for hospitals and testing, but probably no money for state and local governments

President Trump spoke about the pandemic at the White House on Sunday. Photo: stefani reynolds/pool/Shutterstock

WASHINGTON—Lawmakers and the Trump administration were closing in on a more than $450 billion agreement that would replenish a program for small businesses battered by the coronavirus and related shutdowns, aiming to end a weekslong impasse over the loan program.

The Senate convened briefly on Monday afternoon without a deal, and Senate Majority Leader Mitch McConnell (R., Ky.) scheduled another session for Tuesday afternoon. While broad strokes of the agreement are largely set, negotiations continued over several details, including how to structure ramped-up testing for the virus in the U.S.

“The Senate regretfully will not be able pass more funding for Americans’ paychecks today,” Mr. McConnell said Monday. “However, since this is so urgent, I’ve asked that the Senate meet again tomorrow in a new session.”

He later added that he expected the two sides to finalize a deal later on Monday. “We’re getting closer,” Mr. McConnell said.

The emerging agreement would send about $310 billion more to the Paycheck Protection Program, which last week exhausted the $350 billion Congress originally allocated for it. The deal is also set to include $75 billion in assistance for hospitals and $25 billion to expand testing for the virus across the country.

Democrats have called for a national testing system, while the White House wants states to take the lead on how the testing should work, according to a senior administration official.

Why the Coronavirus Stimulus Doesn't Work for Some Small Businesses

Why the Coronavirus Stimulus Doesn’t Work for Some Small Businesses. The small-business loan program designed to keep workers employed is out of money, and some main street business owners hit by the coronavirus pandemic say that it simply is not enough to keep their business alive in the first place. Photo: B.A. Van Sise/NurPhoto

Democrats had blocked a Republican attempt to approve more funding for the small-business program alone, pushing for this round of legislation to include funding for other areas, including hospitals, testing efforts, state and local governments and food assistance. Republicans had said they wanted to quickly refresh PPP and leave other issues for future legislation.

Congress created PPP last month as part of a $2.2 trillion rescue bill in an attempt to prevent mass layoffs as economic activity world-wide slowed amid business closures and other social-distancing efforts to prevent the further spread of the coronavirus. Covid-19, the disease caused by the virus, has killed more than 40,000 people in the U.S. Businesses that use the loans to keep their employees on payroll can have the debt forgiven.

The final deal, which could total more than $450 billion, will be broader than the stand-alone small business aid Republicans wanted, though several Democratic demands are also absent from the legislation. No funding for state and local governments, whose revenues have been slashed during the pandemic, is likely to be included in this package, nor will more money for food assistance.

Of the $310 billion for PPP, $60 billion is expected to be set aside for firms that have struggled to receive loans from banks, including businesses without relationships with traditional lenders, according to a Democratic aide. The deal is also likely to provide $60 billion in new funding to a separate small business program, Economic Injury Disaster Loans, which had also run short of funds amid large demand.

Once an agreement is reached, lawmakers say they will move to approve it as soon as possible. Because lawmakers have left Washington during the pandemic, the Senate will move to approve the bill by unanimous consent, which a single lawmaker can block if they object.

House Democrats are anticipating that Republicans will object to passing the legislation unanimously, and are preparing to bring members back to Capitol Hill to vote on the agreement. House Majority Leader Steny Hoyer (D., Md.) has advised members that the House could vote on an agreement as early as Wednesday.

Progressive lawmakers on Monday expressed concerns about the interim legislation, saying that the current contours of the bill don’t go far enough to directly aid individuals hurt economically by the pandemic.

Rep. Pramila Jayapal (D., Wash.) said she had “real concerns about giving away leverage now without getting some of the priorities that we need.”

“If it matches up with what has been reported, I will not support this bill,” said Rep. Alexandria Ocasio-Cortez (D., N.Y.). She said Congress needed to do more because lawmakers are not in Washington to continue passing legislation.

“It is insulting to think that we can pass such a small amount of money in the context of not knowing when Congress is going to reconvene,” she said.

Both Republicans and Democrats expect to craft yet another round of relief legislation after they complete this one, as they have strained to keep up with the ballooning economic and public health crises. Congress passed and Mr. Trump signed three major relief bills in March.

—Natalie Andrews and Catherine Lucey contributed to this article.