By Jonathan Nicholson
President Donald Trump on Friday signed into law a bill easing conditions for small businesses tapping the government’s Paycheck Protection Program, with his OK coming after the measure scored broad support from lawmakers.
It took some last-minute wrangling and a letter as well, but the Senate passed the legislation late Wednesday.
The House had passed the bill by an overwhelming 417-1 tally last week, and senators had discussed earlier in the week whether to make a few tweaks to it — which would have necessitated another House vote — or passing it unanimously and finding ways to fix what some saw as problems later.
In the end, senators chose the latter course, allowing Senate Majority Leader Mitch McConnell and Democratic Leader Chuck Schumer to announce the deal and passage on the Senate floor early Wednesday night. It was the second attempt in a few hours to pass the bill under unanimous consent.
The Paycheck Protection Program Flexibility Act makes changes to the PPP that include extending the period for using loans to 24 weeks from eight weeks. It also would let borrowers spend just 60%, rather than 75%, of their loan proceeds on paying workers and still be eligible for loan forgiveness.
An earlier version of the House measure completely eliminated the 75% rule, in line with what hotels, restaurants and other industry groups have lobbied for , but labor unions objected and the bill was changed to have a 60% rule.
Part of the deal to get it passed Wednesday and avoid another voting round in the House was a letter from party leaders of Congress’ small-business committees sought by Sen. Ron Johnson, a Wisconsin Republican, to clarify aspects of the bill some senators had seen as unclear or problematic.
Johnson held up the initial request to pass the bill unanimously over his demand for a letter, which is to be printed in the Congressional Record. Specifically, he sought clarity on the program’s authorization period remaining the same as it was and not being extended, along with the program’s new spend-out timeline and the conditions for loan forgiveness if the new, lower 60% threshold for paying workers was not met.
McConnell submitted a letter for the record after the bill passed. While not binding, letters and floor colloquies by lawmakers to state their legislative intent when passing a law can be cited by the administration or courts when there are disputes over ambiguities in the text. Their use is uncommon, but not unheard of.
The PPP was established in late March to help small businesses and nonprofits hurt by the coronavirus crisis. It has received $670 billion in funding through March’s $2.2 trillion CARES Act and April’s $484 billion relief package. There have been $510 billion in PPP loans approved as of Saturday, according to Small Business Administration figures .
The program has drawn criticism over how public companies scored loans, as well as over sending money to less hard-hit areas and allegedly discriminating against businesses owned by women and minorities. A Reuters report on Tuesday said a technical snafu caused many PPP borrowers to receive loans twice or more, estimating that there were at least 1,020 duplicate deposits issued and the overall amount involved could be roughly $116 million.
U.S. stocks /zigman2/quotes/210599714/realtime SPX +1.01% /zigman2/quotes/210598065/realtime DJIA +0.68% have rallied from their March lows thanks in part to optimism around Washington’s aid efforts. The S&P 500 and Dow industrials were trading sharply higher Friday after the May jobs report showed a surprise gain in payrolls.
This is an updated version of a report first published on June 3, 2020.
Victor Reklaitis contributed to this report.