Some Form of New PPP Funding Should Pass in Coming Weeks
Federal policymakers ended the week deadlocked over the politics of approving new funding for the popular small business part of the CARES Act, Payroll Protection Program (PPP). The Small Business Administration announced that the initial $350 billion of funding had been committed and that they would no longer accept applications or new bank participants until the program was refunded.
Republican leader Senator Mitch McConnell had outsmarted the Democratic Congressional leaders by suggesting last week that the PPP was going to run out of money and proposing at $250 billion refunding. He had made that suggestion in consultation with the Administration but without obtaining a sign-off from Democratic Senate leader Chuck Schumer or Speaker of the House Nancy Pelosi.
With members of the House and Senate currently on break and back in their home states Congress has been operating with only a handful of members present, using the parliamentary Unanimous Consent (UC) procedure which, as the name suggests, requires all measure to pass with no objection. The usual process is for the leaders to clear ideas with each other on a bipartisan consultation but McConnell believed that the PPP funding would be so popular he could get points for Republicans by springing it on the Democrats and force them to object – which they did.
As of now, the Democrats have been placed in an untenable position and that the added PPP funding should pass next week either with some money added for hospital and state and local governments as Democrats have suggested or on its own; but small businesses are a political powerful constituency in every state and continued uncertainty seems like a political disaster for Democrats.
All the Congressional leaders agreed this week to delay the proposed reconvening of Congress from next week until May 5; and that date could change depending on the course of the coronavirus. The delay again demonstrated the necessity of Congress to continue to operate under the UC framework which requires some level of bipartisan agreement.
The PPP is the small business relief program in the recently signed CARES Act and is designed to give loans to businesses with under 500 employees. The basic requirement is that 75% of the money goes to paying employees rather than laying them off. If the other 25% goes to operating expenses such as rent and utilities the loan can be forgiven. Community banks have been very successful in getting applications into the SBA and the larger banks appear to be resolving their issues posed by last minute changes in the SBA rules.
Figure: Top Trump Tweets
Why did the W.H.O. Ignore an email from Taiwanese health officials in late December alerting them to the possibility that CoronaVirus could be transmitted between humans? Why did the W.H.O. make several claims about the CoronaVirus that ere either inaccurate or misleading….
— Donald J. Trump (@realDonaldTrump) April 17, 2020
….in January and February, as the Virus spread globally? Why did the W.H.O. wait as long as it did to take decisive action? Lanhee Chen, Hoover Institution Fellow @FoxNews
— Donald J. Trump (@realDonaldTrump) April 17, 2020
