Plans to speed another stimulus package through Congress appear deadlocked, with neither side ready to bend.
The impasse comes after the Trump administration requested that Congress pass $250 billion in emergency funding for the small-business loan program, and Democrats responded with their proposal outlining their additional demands. Last week, both proposals were put to a vote on the floor with neither plan passing.
On April 11, Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-CA) said in a joint statement that they weren’t interested in negotiating.
What Republicans Want
President Trump and Treasury Secretary Steven Mnuchin are seeking the extra small-business money after banks fielded more than 400,000 loan requests in less than a week for firms trying to navigate the economic fallout from the coronavirus pandemic. Mnuchin told Democrats on April 15 that already $100 billion in loans had been approved, and the program was authorized for $349 billion in funding as part of the $2 trillion law that passed last month.
House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) said April 13 that they would agree to the $250 billion for small businesses if half of it goes through community-based financial institutions serving farmers and family, women-, minority- and veteran-owned small businesses and nonprofits. They also sought “improvements to ensure all eligible small businesses can access this critical funding and are not turned away by banks.”
Democrats expressed concern that truly small community businesses had been shut out of the loan program.
“A lot of the smaller businesses that live and work in districts like mine are not having access to these dollars and we have to fix that,” said Congressman Gregory Meeks (D-NY).
Many larger banks are not accepting applications from individuals who do not have a relationship with them and many smaller, community-based businesses bank with community banks or Community Development Financial Institutions that typically do not do business with the Small Business Administration.
“Minority-owned businesses and women-owned businesses have trouble getting loans anyway, even without a pandemic, so yes, that’s something that definitely needs to be addressed,” Meeks stressed.
In addition, the Democrats say the package must include money for hospitals and states, and support for families who rely on food stamps.
“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,” said Pelosi and Schumer in a joint statement.
Although the president had hoped for quick action on the additional small-business funding, action on the bill may have to hold until the full Congress convenes. Both the House and Senate have moved their return date from April 20 to at least May 4.