Congressional stalemate deepens as Pelosi, Schumer say they won’t budge on coronavirus funding demands

Source: By Erica Werner, Washington Post • Posted: Tuesday, April 14, 2020

The Democratic leaders said they will approve White House request for more small business funding as part of a broader package that helps cities, states, and health-care system

Senate Minority Leader Charles E. Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) walk together as they head to a lunch with Irish Prime Minister Leo Varadkar last month in Washington. (Susan Walsh/AP)
Senate Minority Leader Charles E. Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) walk together as they head to a lunch with Irish Prime Minister Leo Varadkar last month in Washington. (Susan Walsh/AP)

House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer said Monday that they won’t agree to the Trump administration’s insistence on more money for small business loans unless their demands are met for additional funding for hospitals, state and local governments and food stamp recipients.

The Democratic leaders also rejected suggestions from President Trump that the country could reopen quickly, saying “there is still not enough testing available to realistically allow that to happen.”

The statement from Pelosi (D-Calif.) and Schumer (D-N.Y.) early Monday morning followed a Saturday statement from congressional GOP leaders in which they rejected the Democrats’ demands and showed no interest in negotiating.

The developments appeared to harden a stalemate on Capitol Hill over how or when the federal government will take further action to address the worsening economic impacts of the coronavirus, with millions newly unemployed and much commerce in the nation at a virtual standstill as the U.S. confronts recession conditions.

Congress acted quickly late last month to pass a massive $2 trillion rescue package for small and large businesses, individual Americans and the unemployed, as well as health-care systems and local governments. There is a recognition that more will need to be done — but not an agreement on how to structure new funding.

Treasury Secretary Steven Mnuchin last week requested urgent congressional action to approve an additional $250 billion to supplement a $350 billion forgivable loan program for small businesses that is quickly being obligated. That program, run by the Small Business Administration, is called the “Paycheck Protection Program.” But Democrats refused to approve the measure when Senate Majority Leader Mitch McConnell (R-Ky.) sought to advance it on Thursday, insisting on changes to the small business program as well as at least $250 billion more for other priorities.

The Small Business Administration says that there have now been more than 800,000 loans approved, totaling more than $200 billion. But it’s not clear how many small businesses have actually gotten any money. Banks and other lenders are the ones that actually have to disburse the money, and they have complained of a cumbersome process. And 800,000 loans represent a small fraction of the 30 million small businesses in the United States.

An SBA spokesman, Christopher Hatch, said Monday that since lenders control the disbursal of funds, it is not possible to say how much money has actually been distributed to small businesses. He said those figures might not start to be available until around June.

Nonetheless, Senate Republicans argue that the program needs to be re-upped immediately because once the initial $350 billion has been committed lenders will be locked out of applying for more loans.

McConnell’s office provided a list of eight small businesses from around the country that say they have been approved for loans through the Paycheck Protection Program, although only two of them — an espresso kiosk in Montana and an auto shop in Oklahoma — appear to have actually received any money.

The Paycheck Protection Program, principally authored by Sen. Marco Rubio (R-Fla.), is supposed to provide loans up to $10 million that are forgivable if the businesses keep their workers on payroll and meet certain other conditions.

Prospects for resolving the congressional standoff are unclear as there appear to be few if any negotiations occurring between the two sides. Neither McConnell nor the White House responded to the statement from Pelosi and Schumer.

“Small businesses, hospitals, frontline workers and state and local governments across the country are struggling to keep up with this national crisis. They need more help from the federal government and they need it fast — our nurses, doctors and health-care workers need it as much as anyone else,” Schumer and Pelosi said in their statement.

“Further changes must also be made to the SBA’s assistance initiative, as many eligible small businesses continue to be excluded from the Paycheck Protection Program by big banks with significant lending capacity,” they said. “Funding for Covid-19 SBA disaster loans and grants must be significantly increased to satisfy the hundreds of billions in oversubscribed demand.”

Pelosi and Schumer had demanded an additional $150 billion for cities and states, $100 billion for hospitals and health-care systems and an additional 15 percent increase in benefits for food stamp recipients.

A bipartisan group of governors on Saturday asked Congress to approve $500 billion in aid for cash-strapped states that are struggling to deal with mounting costs and a loss in revenue triggered by the pandemic.

The House and Senate are both out of session, so legislation could only advance by a voice vote or “unanimous consent” requiring all members to agree. The Senate gaveled in and out of session Monday morning for a brief pro forma session, but there was no attempt on either side to advance legislation. The Senate’s next pro forma is on Thursday — one day before White House adviser Larry Kudlow has said the Paycheck Protection Program will run out of money.

Although Congress is scheduled to reconvene on April 20, that’s looking unlikely to happen.

Speaking Monday morning on C-SPAN’s “Washington Journal,” House Appropriations Chairwoman Nita M. Lowey (D-N.Y.) said she did not think it would be possible for Congress to reconvene so quickly.

“I’ll tell you, I have no interest in going back now. How do you get there? Train? Plane? Last time I got there, I drove for about five hours. People across the country are not going to take a chance,” Lowey said. “Unless it’s safe, I think we are better off doing our work, as we have been doing, passing bills by unanimous consent. And, hopefully, there is a bipartisan will to really focus on what we need and leave partisan politics aside.”

Aaron Gregg contributed to this report.