Partisan Stalemate Stalls Business Loan Funds

Funds for the Paycheck Protection Program expected to dry up today.

Congress appears to be at a stalemate in providing another COVID-19 stimulus package – on the same day that funding has run out from the previous stimulus passed just three weeks ago.

Amid partisan polarization not seen in earlier COVID-19 packages, the monies for the Paycheck Protection Program – $350 billion to help small businesses with forgivable loans – have all been accounted for, and the Small Business Administration (SBA) is not accepting any new applications.

The U.S. Senate has a pro-forma session this week with an opportunity to move a package along, but it does not look promising.

Odd bedfellows President Trump, Treasury Secretary Mnuchin, and Senate Minority Leader Charles Schumer appeared to be leapfrogging over Senate Majority Leader Mitch McConnell this week and trying to negotiate another stimulus package. Earlier in the week, they looked close to an agreement.

For its part, the Senate held a mostly virtual pro-forma session on Monday of this week, but no actions were pushed forward – in fact, the session lasted 30 seconds, and only two senators were physically present.

Despite the elbow bumps on a deal between the administration and House Democrats, the House and the Senate still appear to be at odds as to what the next stimulus bill should include: the Senate wants to focus on replenishing the Paycheck Protection Program started in the CARES Act for small businesses; the House wants to go further and provide more funds for healthcare providers and state and local governments.

Another obstacle: both the House and the Senate can move legislation mostly virtually, without physically bringing lawmakers back to town, but anything voted on in either chamber while Congress is out of town needs to be unanimous. If only one lawmaker says no, then any vote will fail. And those votes would likely only be administrative; Congress still hasn’t decided to allow remote voting on approval for actual legislation.

The Senate has a chance at passing something at their pro-forma session today (Thursday). The House has indicated they may be close enough in agreement to have a vote on Friday.

If Trump agrees to something with Schumer, there’s a chance a Phase IV coronavirus stimulus package will start to be developed this week.

Programming Note: Matthew Albright is a permanent panelist on Monitor Mondays. Listen to his live reporting this coming Monday during a special 60-minute townhall edition of Monitor Mondays, 10 -11 a.m. EST.