Congress Should Pass More Financing For Small Business Lending
With jobless claims exceeding 26 million in the past five weeks due to the coronavirus pandemic, the House voted on Thursday to approve another half a trillion dollars in federal aid to replenish a depleted small business loan program and provide money for hospitals and tests.
The bill includes $ 310 billion for the paycheque protection program, which offers forgivable loans to small businesses that keep workers on the payroll during the economic shutdown caused by the pandemic.
The program used up its original $ 349 billion last week, but efforts to immediately increase funding stalled as Democrats and Republicans argued what else to include. An agreement was reached early Tuesday and the Senate passed it by voice vote that day.
With House approval by a 388-5 vote, with one voting member present, the measure is now heading to the President, who has pledged to sign it. “This bill helps small businesses keep millions of workers on the payroll,” Trump said.
With the latest bill, Congress will have approved more than $ 2.5 trillion to help Americans, closed businesses, hospitals, vaccine researchers and others fight the pandemic. And discussions are already underway on what remains to be done. The House and Senate are currently scheduled to return on May 4.
Thursday’s bill included $ 75 billion in emergency funding for hospitals and $ 25 billion to increase testing and contact tracing. It also forces the Trump administration to create a national testing plan, a decision medical experts say will be needed before state governments can allow companies to resume operations. It orders states and the federal government to collect demographic data on people who have fallen ill.
House Speaker Nancy Pelosi (D-San Francisco) said on Thursday the government needed the science to tackle the health crisis. “We have to make our decisions this way,” she said.
The bill also sets aside $ 60 billion in the paycheck protection program to be lent by small banking institutions, such as credit unions, in an effort to increase the number of loans made to very small businesses or businesses. companies without an existing relationship with a bank. This includes women-owned and minority-owned businesses that have complained that they were excluded from the first round of funding.
Following widespread criticism that large publicly traded companies received tens of millions of dollars in loans in the first installment of paycheck protection program funding, the Treasury Department on Thursday updated its guidelines on who should use the program.
He warned that companies that received the money should be prepared to certify that the government loan was required to continue their operations. Otherwise, those companies would have to repay the money by May 7 or face penalties, the department said.
“It is unlikely that a state-owned enterprise with substantial market value and access to capital markets can obtain the required certification in good faith,” the guide now says.
“If there is someone who abuses this program, he takes advantage of a situation [in which we were trying to release money quickly] and it was not intended for you, we will find you. Return the money, ”House Majority Leader Kevin McCarthy (R-Bakersfield) said at a press conference on Wednesday.
On Thursday afternoon, upscale chain Ruth’s Chris Steakhouse announced it would repay the $ 20 million loan it received, following a similar announcement earlier in the week by the hamburger chain Shake Shack.
The Capitol has been largely closed for weeks, with members working remotely.
For the first major activity on the House’s ground in weeks, dozens of members wore face masks on Thursday. Gloves, hand sanitizer, and extra masks were available outside the room. Members voted in eight groups of 60, arranged in alphabetical order, the expected vote of 10 minutes lasting over an hour.
Ground action paused for 30 minutes between votes so staff in orange gloves could sanitize surfaces inside the chamber, including microphones and handrails in empty tourist galleries. On the floor, staff members enforced social distancing, ordering members to stay four seats from each other in a cavernous room that normally comes alive with up to 435 reps at a time.
Representatives also voted to create a new oversight committee to oversee how the administration spends the money Congress has provided to fight the pandemic.
The next Congress will turn its attention to what is already a deeply partisan struggle over what should be a fifth bill to combat the economic effects of the coronavirus.
Democrats want to make funding for state and local governments a priority in the bill, highlighting the huge financial blow that local governments have suffered in responding to the virus and meeting the surge in demand for other government benefits. State, such as unemployment. Governors across the country say they will need around $ 500 billion.
But Republicans want to curb congressional spending insanity.
It is “time to start thinking about how much debt we are adding to our country and its future impact,” Senate Majority Leader Mitch McConnell (R-Ky.) Said on Capitol Hill earlier this week. . “Until we can start opening up the economy, we won’t be able to spend enough money to fix the problem.
He also rejected the idea of providing a “rescue” to states, saying many are strapped for cash due to the heavy pension burden, not necessarily the coronavirus. In an email to reporters, his team dubbed them “blue state bailouts”.
“We all have governors, regardless of party, who would love to have free money,” said McConnell, suggesting laws be changed to allow states to file for bankruptcy, if they need to. .
Several Republicans have lambasted McConnell’s comments, including Maryland Gov. Larry Hogan, a Republican and chairman of the bipartisan association of national governors. Representative Peter King (RN.Y.) called McConnell’s position “shameful and indefensible”, dubbing him the “Marie Antoinette of the Senate”.
Grassroots Democrats have already put together a list of other proposals in the bill, including funding to increase postal voting for the November election, money to support the failing US Postal Service, a risk premium or other support for essential workers such as health care providers and grocery clerks, and support for media companies suffering from a lack of publicity.
Progressives have rallied around a proposal to provide $ 2,000 checks to individuals every month until the pandemic is over.
Representative Alexandria Ocasio-Cortez (DN.Y.) told reporters this week that the $ 1,200 stimulus checks being rolled out by the Treasury Department are now just a “crumb” for residents of her district, who , according to her, potentially has the most COVID-19 cases in the country. She said Democrats need to keep firmer ground in the upcoming negotiations.
“We cannot bow to the logic that a dime and a crumb is better than nothing,” she said. “We need to be able to play hard so that working families can get the meaningful help they need. “