House Speaker Rep. Nancy Pelosi (D–Calif.) and Senate Minority Leader Sen. Chuck Schumer (D–N.Y.) on Wednesday threw their support behind a bipartisan $908 billion coronavirus relief bill meant to deliver aid as places across the country struggle with shutdown restrictions related to COVID-19. But Senate Majority Leader Sen. Mitch McConnell (R–Ky.) appeared to reject that same plan the day prior, instead pushing a $500 billion measure that reportedly has President Donald Trump’s support.
Pelosi and Schumer initially championed a $2.2 trillion piece of legislation. The pared-down bill includes $160 billion for state and local governments, $288 billion in small business assistance, and money for $300 weekly federal unemployment benefits to supplement state benefits.
“While we made a new offer to Leader McConnell and Leader [Kevin] McCarthy on Monday, in the spirit of compromise we believe the bipartisan framework introduced by Senators yesterday should be used as the basis for immediate bipartisan, bicameral negotiations,” Schumer and Pelosi said in a statement.
It is not yet clear if McConnell will budge, though Treasury Secretary Steven Mnuchin intimated Wednesday that Trump was poised to sign the $500 billion version.
As of Tuesday, McConnell’s plan zeroed in on the Paycheck Protection Program (PPP), carving out about $333 billion for the loan assistance initiative meant to help small businesses across the country retain their staffs amid an increase in coronavirus-related restrictions and a drop-off in demand. It also allots funds for liability protections, education, and distribution for a COVID-19 vaccine.
The PPP has been the subject of much debate since its implementation, which came with its share of problems upon being rolled out. Though it has certainly helped some businesses stay afloat, the initial loan forgiveness terms stipulated that recipients use 75 percent of their money on retaining staff, leaving some businesses full of employees with no business and little way to meet other expenses, like rent. That was eventually softened to 60 percent.
While it was touted as a boon for the little guy, new data shows that over half of funds went toward 600 businesses, most of them large, some of them national chains. On the surface, that makes sense, as bigger firms have more employees and thus would require heavier sums of money. But another PPP hitch was that banks were reluctant to process loans for non-clients, and sometimes rejected applicants if they had no lending relationship with the bank. Large businesses were more likely to clear that hurdle and were also far better positioned than small firms to take tap into capital markets.
As of September, about 100,000 businesses that temporarily closed due to COVID-19 are now shuttered for good.
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