The White House and Congress have reached a deal on a new funding package that will replenish a lending program meant to aid small businesses hurt by the novel coronavirus outbreak, two administration officials confirmed Tuesday. Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows struck an agreement on
the core components of the deal with Senate Minority Leader Charles Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) early Tuesday morning. Schumer announced the deal during an interview on CNN shortly after 8 a.m. Tuesday and White House officials confirmed after 1 p.m.
The deal totals more than $480 billion and appropriates $320 billion for the Small Business Administration’s Paycheck Protection Program (PPP), $60 billion of which is set aside for small lenders and community financial institutions. It also includes $60 billion for the Economic Injury Disaster Loan program; $25 billion for testing; and $75 billion for hospitals, according to details released later. President Trump urged the House and Senate to pass the legislation in a pair of tweets Tuesday afternoon and laid out his vision for what would be included in the next round of coronavirus legislation.
“After I sign this Bill, we will begin discussions on the next Legislative Initiative with fiscal relief … to State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth,” the president wrote.
The Trump administration and congressional negotiators have been locked in negotiations over a deal to replenish the $350 billion for the PPP, which was authorized in the third coronavirus relief package signed by Trump at the end of March and ran out of funds to lend to small businesses last week.
The program allows small businesses to keep workers on the payroll and in some cases has aided shops from going under completely amid the downturn. Social distancing measures and stay-at-home orders in some states meant to slow the spread of the virus have hit small-business owners particularly hard.
The Senate and House will need to pass the legislation. Doing so this week will require the Senate to pass the bill by unanimous consent.
McConnell applauded the deal Tuesday afternoon and proclaimed the deal a GOP victory.
“I am encouraged that Democratic leaders have finally agreed to reopen the Paycheck Protection Program and abandon a number of their unrelated demands,” he said in a statement.
He noted the $320 billion in new PPP money is $70 billion more than Republicans initially requested two weeks ago.
He also praised Sen. Marco Rubio (R-Fla.), the chairman of the Small Business and Entrepreneurship Committee, for pushing to add $60 billion for the Economic Injury Disaster Loan program, of which $10 billion will go to grants.
He singled out Senate Agriculture Committee Chairman Pat Roberts (R-Kan.) and Sen. Steve Daines (R-Mont.) for adding language clarifying that farmers and ranchers will be eligible for the small-business assistance.
“I welcome this bipartisan agreement and hope the Senate will quickly pass it once members have reviewed the final text,” McConnell added.
The House is expected to vote on the legislation Thursday if the Senate passes it Tuesday.
The package does not include the tens of billions of dollars that Democratic leaders demanded in new money for a state stabilization fund included in last month’s $2.2 trillion CARES Act.
Schumer vowed to include more money for states in the next coronavirus relief package passed by Congress, which may rival the CARES Act in size.
“Democrats are disappointed that the administration has not agreed to more funding for state, tribal and local governments on the front lines of this crisis who desperately need an infusion of funds to pay the essential workers who keep us safe,” Schumer and Pelosi said in a joint statement.
“However, we are pleased that the president has committed to addressing this critical priority in CARES 2 and will work with urgency to see that this commitment is fulfilled,” they said.
The small-business lending program has come under scrutiny this week after it was revealed that large corporations including chain restaurants and hotels were able to tap into the funds. The CEO of burger chain Shake Shack said Monday the company was returning $10 million in loans that it received through the program because the company is “fortunate to now have access to capital that others do not."
The launch of the program was marred by confusion as thousands of businesses flooded the system to apply for loans. Banks and industry officials also expressed frustration over the lack of clarity in the program’s lending set up.
Administration officials have focused on the positive influence of the program, with Trump touting on Monday that it had affected 30 million American jobs thus far.
Jordain Carney contributed.