After weeks of infighting, the Senate has passed another deal aimed at tiding over small businesses during this economic downturn.
The legislation, which lawmakers are describing as an “interim” spending package before the next major stimulus bill, includes roughly $480 billion in funding, $380 billion of which is dedicated to small business loan programs. It’s a much-needed boost for hundreds of thousands of small businesses, as the money that Congress previously allocated for forgivable loans and grants has run out. It’s worth noting, however, that some of the same loopholes that enable larger corporations — like Ruth’s Chris Steak House — to apply for these loans still remain.
In addition to the funds for small business loans, this bill also includes $75 billion for hospitals — which are experiencing severe revenue shortfalls as they combat the coronavirus — and $25 billion to establish testing programs, money that experts say is much needed in order to build out the country’s testing capacity.
This package doesn’t contain, however, several priorities that Democrats had previously emphasized, such as additional funding for states and cities that are also struggling financially during this crisis. These omissions have prompted some progressive members, including Rep. Alexandria Ocasio-Cortez (D-NY), to signal opposition to the proposal.
“We have not seen the final text of this bill, but what I can say is that if it matches up with what has been reported, I will not support this bill personally,” Ocasio-Cortez said on Monday.
The size of this “interim” spending bill, while much smaller than the $2 trillion stimulus that passed in March, is still significant: In 2009, the entire cost of the Recovery Act was pegged at around $840 billion. The bill now heads to the House, which is slated to consider it as soon as Thursday.
If it’s approved there, lawmakers will turn their attention to the next stimulus package, which Democrats are pushing to include more comprehensive support for essential workers along with funding for states. “As soon as [the interim bill] has passed in the House, we will advance CARES 2, which must be transformative and far-reaching,” House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a statement.
What the bill contains
Due to Democratic pressure, the “interim” funding bill has expanded notably since Senate Republicans’ initial proposal.
The original Republican offer, announced roughly two weeks ago, was limited to $250 billion in funding for the Paycheck Protection Program, which provides forgivable grants to businesses and nonprofits. The newer version includes $320 billion for PPP, and $60 billion for the Economic Injury Disaster Loan program, which offers emergency grants that can expedite relief.
Of the $320 billion allocated for PPP, there’s also a $60 billion carve-out for community-based lenders, as well as mid-sized banks, which can better serve smaller businesses and minority-owned firms, organizations that are less likely to have an existing relationship with a larger bank.
Additionally, the deal contains $75 billion for hospitals, which have been overwhelmed by the simultaneous costs of preparing for the coronavirus and the revenue declines that have resulted as elective procedures are postponed. Another $25 billion is intended to help ramp up the country’s testing capacity, a development that experts view as vital to determining when to reopen the economy more fully.
The main Democratic demand that has been omitted from this deal is the additional funding that lawmakers would like to see go to cities and states, many of which are facing incredible financial strain given reductions in tax revenue. Mnuchin signaled that this issue would be addressed as part of negotiations for the next funding bill.
“The president has heard from the governors and he’s prepared to discuss that in the next bill,” Mnuchin said during an appearance on CNN’s State of the Union.
Trump’s reluctance to consider state funding in the current bill is the result of a couple of factors, according to Politico. Among them: The administration is concerned that it would have less leverage over the states regarding when they reopen their economies if they had more funding to help them weather this period.
The House vote could happen as soon as Thursday
A vote in the House is expected Thursday, when lawmakers will consider some procedural changes, too.
Because most members have been working remotely during the pandemic, votes have posed a unique challenge. When lawmakers were weighing the CARES package in March, for example, Rep. Thomas Massie (R-KY) demanded a quorum — or a majority of the House — be physically present for the vote. It is possible that Massie or another member might make the same request again this week, meaning some members would have to travel back to the Capitol. House Democrats have already urged lawmakers to be prepared to do so.
Pelosi has also said that the House could consider the use of proxy voting for future bills if members continue to work from their districts during the pandemic. Were members to move forward with this approach, the House would have to vote on a rule to approve proxy voting. Like the name suggests, proxy voting enables members to allow someone who’s physically present in the House chamber to vote on their behalf, so not everyone would have to travel back to Washington.
Both the votes on proxy voting and the interim spending bill are expected later this week.