Senate Republicans pushed to fast-track a $250 billion emergency expansion of the Paycheck Protection Program (PPP) to help small businesses keep paying their employees during government-mandated shutdowns this week in response to high demand, but House Speaker Nancy Pelosi (D-CA) planted herself firmly in the way.
During her weekly press conference on Thursday, the speaker called the GOP move a “stunt” and said that there was “no data” to support the request.
You can hear Pelosi for yourself in this audio clip shared by the GOP War Room:
High demand for loans
Fast Company reported that as of Sunday, Wells Fargo had already stopped accepting loan applications under the PPP, which it had limited to employers with fewer than 50 employees. $10 billion in loans was the bank’s limit, which they reached in just one to two days of applications.
That seems like extremely high demand for the program, which was created as part of the CARES Act and offers emergency loans to businesses to cover payroll and certain other expenses. The loans are forgivable if used for expenses like payroll, rent, and utilities, and will be covered by the government if employers continue to pay workers and don’t lay them off.
Senate Majority Leader Mitch McConnell (R-KY) said the program was projected to run out of funds by the end of the month, which is why he’s seeking more money to expand it quickly, The Daily Wire reported.
But Pelosi claims there’s no reason to hurry. “They still have two-thirds of it left. So we have time to negotiate how or when or where we need money there,” she said.
Democrats block expansion
Sen. Ben Cardin (D-MD) blocked a unanimous voice vote on the program expansion and the Senate adjourned until Monday. Cardin called McConnell’s push to pass the expansion a “political stunt” and pushed instead for disaster grants that would allow businesses without a pre-existing banking relationship to get assistance, CNBC reported.
As Vox explained, rather than approve the Republicans’ simple request to add funding to the PPP, Democrats “think the small business money should be spread across a couple different programs, and want more funds added to the legislation including $100 billion for health care providers, $150 billion for states and cities, and more support for SNAP.” But McConnell said that the PPP is the only program “at risk of exhausting its funding right now.”
Another sticking point in the funding expansion is that Pelosi and other Democrats want to see quotas on further funding to ensure that it goes to minorities and other identity groups thought to be underserved or disadvantaged.
Pelosi admitted to CNN’s Anderson Cooper that the $350 billion provided to the program would not be enough, but justified the delays. “We want to make sure that the program is administered in a way that does not solidify inequality in how people have access to capital,” she told Cooper, but did not specify further details on how that would be achieved.
The disaster grants may help those who don’t already work with a bank, but adding more bureaucracy and requirements is likely to make the program slower and less efficient, and still may not even help the populations it seeks to help.