At just the moment that American workers desperately need a rescue, Congress’ absence from the scene has closed the doors on its most important form. The Small Business Administration just made it official:
BREAKING: $350B coronavirus small business relief program has run out of money.
“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” US Small Business Admin. says.
— NBC News (@NBCNews) April 16, 2020
The Paycheck Protection Program has allocated its entire $350 billion appropriation in just under two weeks, leaving lots of struggling businesses in the COVID-19 lockdown cold. The program would work to save jobs and put Americans back to work, Treasury Secretary Steve Mnuchin argued, if Congress would just appropriate more funds to the PPP.
That is, if we could find Congress:
Treasury Secretary Steven Mnuchin and US Small Business Administration head Jovita Carranza urged Congress to provide more money for the SBA’s Paycheck Protection Program in a statement Wednesday night.
The new loan program was designed to help put millions of dollars directly into the hands of small business owners affected by coronavirus. But as CNN has reported, the program is expected to officially run out of funding by Wednesday evening or Thursday morning amid an impasse between Democrats and Republicans on funding it.
“We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks,” the statement reads.
Mitch McConnell and Kevin McCarthy concurred last night. They took aim at House Democrats for digging in their heels on a broader Phase 4 bill rather than an emergency resupply of PPP:
The small business rescue set up by Congress to avert massive layoffs is set to exhaust its $350 billion funding capacity, top lawmakers say, as Congress remained in a stalemate over how to allocate more money for the popular loan program.
In a joint statement Wednesday evening, Senate Majority Leader Mitch McConnell of Kentucky and House Minority Leader Kevin McCarthy of California said that funding for the so-called Paycheck Protection Program will be depleted “in a matter of hours.” That would force the program to stop accepting applications for the government-backed loans, which can be forgiven if businesses agree to maintain their payrolls.
As of 9 p.m., the SBA reported that 1.5 million applications had been approved for more than $324 billion. In a message obtained by POLITICO, the agency began to warn banks Wednesday that lenders would no longer be able to load loan requests into the SBA’s systems and that the agency would not accept applications for new lenders to participate in the program.
The two sides, including staff for House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer, are set to talk again today, with a Senate pro forma session scheduled for 3 p.m. the next opportunity to act should there be a breakthrough.
But odds of that happening may be dimming.
Any deal would require unanimous consent with Congress not scheduled to return to Washington until May. The talks are taking place as government data Thursday showed 5.25 million people applied for unemployment benefits last week, capping four weeks of coronavirus-related shutdowns that erased more than 10 years of job creation. The figures suggest an unemployment rate around at least 17% — far above the 10% reached in the wake of the recession that ended in 2009.
Mnuchin wants to add $251 billion for a $349 billion small business aid program that is set to run out of money Thursday.
One issue that has proved contentious is whether and how much aid to send to state and local governments, many of which are starting to furlough employees and employ other spending cuts because their revenue is plummeting.
If Congress actually were present on Capitol Hill, this could get worked out rather quickly among all of the players. Few elected officials if any would stall on a vote to provide more funding for a rescue mechanism Congress created for this very purpose while jobless claims rocket into the stratosphere — if they were actually in Washington. Instead, with members sheltering at home and no method of remote voting, Nancy Pelosi gets to use unanimous consent as a tool to force the Senate and White House into concessions from the safety of her twin $12,000 refrigerators and ice-cream stash:
— Nancy Pelosi (@SpeakerPelosi) April 14, 2020
This is an absurd situation, as I have written repeatedly for the last week. The nation is facing its gravest economic crisis in at least a decade, possibly in a century, and Congress remains on the sidelines. Doctors, nurses, first responders, grocery-store workers, postal carriers and more are risking their health to take care of a nation, and yet its governing class has largely skedaddled rather than do their jobs. It’s the Brave Sir Robin Congress.
Small wonder that Trump tweeted this out earlier today. He should have been tweeting it every day for a week:
The executive branch is doing their jobs. It’s way past time for the legislative branch — both the House and Senate — to start doing theirs.
Addendum: A crack in Democratic unity? Maybe a small crack, but not significant:
The PPP program is going to run out of funding soon – the Senate should approve add’l funding by unanimous consent ASAP. Small businesses need our help to survive during this emergency. https://t.co/kYTbjGHCXM
— Kyrsten Sinema (@kyrstensinema) April 16, 2020
That makes Schumer’s job a little tougher, but it doesn’t really change Pelosi’s calculus. We’d need to see a mass defection among House Democrats to change the negotiating calculus here.