Small Business Aid Stalls in Senate as Democrats Demand More Funds

Spread the love

WASHINGTON — A Trump administration request for Congress to quickly approve $250 billion in additional loans to help distressed small businesses weather the coronavirus crisis stalled in the Senate on Thursday, after Republicans and Democrats clashed over what should be included in the latest round of government relief.

The dispute was a prelude to what is likely to be a far more complicated and consequential set of negotiations over a broader infusion of federal aid that lawmakers expect to consider in the coming weeks on the heels of the $2 trillion stimulus law enacted late last month. The White House had asked lawmakers to move in the interim to quickly inject more money into a new loan program intended to keep small businesses afloat and allow them to avoid laying off workers as the pandemic continues to batter the economy.

But Democrats argued that as long as Congress was providing additional aid, it should include more money that was urgently needed for hospitals, states and cities confronting the coronavirus, as well as additional food assistance for Americans coping with its punishing economic toll.

Republicans balked at that effort, saying the time for negotiating such additions was later.

“My colleagues must not treat working Americans as political hostages,” said Senator Mitch McConnell, Republican of Kentucky and the majority leader. With the Senate not scheduled to return until April 20, he added, lawmakers should have “focused discussions on urgent subjects without turning every conversation into a conversation about everything.”

During a choreographed exchange on the Senate floor, Mr. McConnell attempted to push through the $250 billion in funding for small business loans during a procedural session, a maneuver that would have required the support of all senators. Democrats objected as promised and proposed doubling that request by adding $100 billion for hospitals and $150 billion for state and local governments.

Senator Benjamin L. Cardin, Democrat of Maryland, called Mr. McConnell’s move a “political stunt.”

“There was no effort made to follow the process that we could to get this done, so it won’t get done,” said Mr. Cardin, one of the architects of the small business loan program, which has bipartisan support.

When Senator Chris Van Hollen, Democrat of Maryland, countered with the Democrats’ proposal, Mr. McConnell blocked it, ensuring that the Senate could not move forward on the issue until another procedural session scheduled for Monday.

Republicans and the administration have said that the soaring demand for the loan initiative, called the Paycheck Protection Program, warrants a stand-alone bill, while other demands wait for negotiations on the broader package that lawmakers have begun referring to as “Phase Four” of their coronavirus aid efforts. With most of the funds from the $2 trillion economic stimulus plan just beginning to trickle out to agencies and taxpayers across the country, they argued that it was premature to allocate billions more dollars this week.

“The president has been very clear, he’s happy to talk about other issues such as hospitals and states in the next bill, but we wanted to go and get money for the small business program,” Treasury Secretary Steven Mnuchin said Thursday in an interview with CNBC.

The Paycheck Protection Program, which was created as part of the stimulus package passed last month, has had a fraught rollout, even as it has been inundated with requests from companies desperate to avoid collapse.

Democrats said they were blindsided by Mr. McConnell’s announcement that he would quickly move to approve the small business funds, and argued that the needs of hospitals and state and local governments were just as dire.

“Yes, we know we need more money for this program,” Mr. Van Hollen said on the Senate floor. “But for goodness sake, let’s take the opportunity to make some bipartisan fixes to allow this program to work better.”

In addition to providing more money, the Democratic proposal would have placed new conditions and disclosure requirements on the administration, according to a summary released on Thursday. Some of the new small business loan funds would be reserved for small, community-based lenders.

The Department of Health and Human Services and the Federal Emergency Management Agency would also have had to report to Congress monthly on the administration’s coronavirus testing strategy, as well as the allocation of testing and supplies. And the administration would have had to submit a separate report by May 15 on the demographics of patients who had contracted Covid-19, the disease caused by the virus, and its strategies for reducing health disparities related to the virus. That proposal came about after data emerged suggesting that the disease was infecting and killing black people in the United States at disproportionately high rates.

Alan Rappeport contributed reporting.