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April 15, 2020, 4:59 p.m. EDT

Lawmakers still negotiating over boosting aid program for small businesses, as money looks set to run out today

An additional $250 billion for Paycheck Protection Program may come by the end of the week, say analysts tracking Washington’s response to coronavirus crisis

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By Victor Reklaitis, MarketWatch


Bloomberg
Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi are at an impasse on Washington’s next potential move related to coronavirus aid.

Democrats and Republicans are continuing to work toward reaching an agreement on setting aside additional coronavirus aid for small businesses, with one top Democratic lawmaker saying Wednesday that he remains hopeful a deal can be achieved.

At the same time, the program is now expected to run out of money later Wednesday, according to a spokesman for Republican Sen. Marco Rubio of Florida, who chairs the Senate Committee on Small Business and Entrepreneurship.

“Hopefully, we are getting closer to an agreement,” House Majority Leader Steny Hoyer, the Maryland Democrat, told reporters on a conference call Wednesday. “I can’t guarantee that we can get an agreement that we can pass on Friday, but that would be optimal.”

Hoyer said talks were continuing between congressional Democrats and Senate Majority Leader Mitch McConnell, the Kentucky Republican, and Treasury Secretary Steve Mnuchin. Analysts have been predicting that an extra $250 billion for a Paycheck Protection Program could get approved this week.

Read more: SBA touts $250 billion loan approvals, but there’s little evidence small businesses are seeing cash

And see: How Congress is spending trillions in response to the coronavirus crisis — in one chart

“Investors could see the details of a deal as early as late Wednesday, though during the day on Thursday seems more likely,” said analysts at Height Capital Markets in a recent note. Height’s team said the Republican-led Senate could approve a deal in a pro-forma session planned for Thursday afternoon, with the Democratic-run House then following suit on Friday.

Two top Democrats — House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer — last week called for an additional $250 billion requested by the Trump administration for the Paycheck Protection Program (PPP) to get packaged with other provisions, such as $100 billion for health-care institutions, $150 billion for state and local governments, and extra help for food-stamp recipients.

Pelosi and Schumer also said they want $125 billion of the PPP loans channeled through “community-based financial institutions that serve farmers, family, women, minority and veteran-owned small businesses and nonprofits in rural, tribal, suburban and urban communities.”

But McConnell signaled in a series of tweets last week that he wasn’t budging from the GOP plan just to get an additional $250 billion for PPP. The loan program for small businesses initially received $350 billion in last month’s $2 trillion coronavirus package, known as the CARES Act or Washington’s “Phase 3” virus legislation.

“We want to support the PPP,” Pelosi said in an interview with CNN on Wednesday. But, she added, “what the Republicans are proposing will not get unanimous consent in the House of Representatives.”

McConnell and House Minority Leader Kevin McCarthy, the California Republican, also have sounded resolute, saying in a statement on Saturday that they will “continue to seek a clean PPP funding increase.”

During a sparsely attended Senate session last Thursday, McConnell had sought unanimous consent to raise the funding for the Paycheck Protection Program to $600 billion from the earlier $350 billion, but Democrats objected and offered their own more comprehensive and expensive bill, and ultimately the Senate adjourned. Congress is on recess and not slated to return to Washington, D.C., until April 20, but lawmakers can conduct pro-forma sessions and pass legislation by unanimous consent or voice vote.

“Please do not block emergency aid you do not oppose, just because you want something more,” McConnell said to Democratic senators on Thursday before his effort failed. The Kentucky Republican also had this to say in a tweet : “If we want to act fast, Congress has to focus. There is no realistic chance that another sprawling bill which allocates half a trillion dollars to a number of priorities, even important ones, will be able to pass the Senate or the House by unanimous consent this week.”

Democratic Sen. Chris Van Hollen of Maryland, on the other hand, said McConnell’s moves were a “political stunt.” Van Hollen noted widespread reports of problems with getting PPP loans.

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