White House, Congress get closer on $450B virus aid talks

The Trump administration and Congress indicated Monday they were working toward agreement on a coronavirus aid package the Senate could take up as soon as Tuesday, with more than $450 billion to boost a small-business loan program that’s out of money, help for hospitals and virus testing.

The Senate missed a potential deadline Monday and frustrations are mounting, but the emerging draft measure—originally designed as an interim step aimed at replenishing payroll subsidies for smaller businesses—has grown into the second largest of the four coronavirus response bills so far.

The emerging agreement, nearly double President Donald Trump’s request to replenish the small business program, adds funds for hospitals and COVID-19 testing.

Trump was has been among those offering optimistic assessments, saying “we are very close to a deal” during a White House briefing Sunday.

But the timeline for a deal wasn’t immediately clear. The Senate met for a brief pro forma session Monday afternoon that could have provided a window to act on the upcoming measure under fast-track procedures requiring unanimous consent to advance legislation, but the measure wasn’t ready in time.

Majority Leader Mitch McConnell, R-Ky., set up another Senate session for Tuesday in hopes an agreement will be sealed and written up by then.

“It’s now been four days since paycheck protection program ran out of money. Republicans have been trying to secure more funding for this critical program for a week and a half now,” McConnell said. “Our Democratic colleagues are still prolonging their discussions with the administration, so the Senate regretfully will not be able to pass more funding for Americans’ paychecks today.”

The House has announced it could meet as soon as Wednesday for a vote on the pending package, according to a schedule update from Majority Leader Steny Hoyer, D-Md. The chamber is likely to have to call lawmakers back to Washington for a vote, which will present logistical challenges.

With small-business owners reeling during a coronavirus outbreak that has shuttered much economic activity, Treasury Secretary Steven Mnuchin—the administration’s point man in the talks with Democrats—said he was hopeful of a deal that could pass Congress quickly and get the Small Business Administration program back up by midweek. But optimism regarding an immediate deal was being tempered.

“I heard today from our legislative affairs team that they are hopeful we can get a deal this week,” top White House adviser Kellyanne Conway said Monday on Fox News. “The secretary feels very confident. He said that yesterday that a deal is happening. Much better position than we were, say, a week ago.”

The emerging accord links the administration’s effort to replenish the small-business fund with Democrats’ demands for more money for hospitals and virus testing. It would provide $300 billion for the small-business payroll program, and $50 billion would be available for a small-business disaster fund. Additionally, it would bring $75 billion for hospitals and $25 billion for testing, according to those involved in the talks.

On a conference call Sunday afternoon that included Trump, Mnuchin and Republican senators, McConnell indicated the only remaining item for discussion involved the money for testing, according to a Senate GOP leadership aide who spoke on condition of anonymity to discuss a private call.

Democrats have been pushing to boost funding to cash-strapped states and local governments whose revenues have cratered. They had proposed $150 billion for the effort but GOP leaders stood hard in opposition, at least regarding the current package of COVID-19 aid.

“The president is willing to consider that in the next bill, but wants to get this over the finish line with a focus on small businesses, hospitals and testing,” Mnuchin said Sunday on CNN.

The government’s Paycheck Protection Program for small businesses is slated to get more than $300 billion under the emerging deal. The program has been swamped by companies applying for loans and reached its appropriations limit last Thursday after approving nearly 1.7 million loans. That left thousands of small businesses in limbo as they sought help. An additional $50 billion in the evolving deal would go for disaster loans.

About $75 billion would go to U.S. hospitals—those straining under a ballooning coronavirus caseload as well as those struggling to stay financially afloat after suspending elective surgeries during the pandemic. About $25 billion would be added for COVID-19 testing, something states have said was urgently needed.

The SBA loans, based on a company’s payroll costs, offer owners forgiveness if they retain workers or rehire those who have been laid off. The law provides for forgiveness for companies in any industry — even businesses like hedge funds and law firms. There’s a limit of $100,000 on the amount of employees’ compensation that can be considered when loan forgiveness is calculated.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.