Northwest Arkansas Democrat-Gazette
Senate passes $484 billion aid package
Money in it for hospitals, virus tests, business loans
WASHINGTON — The Senate passed a $484 billion deal Tuesday to replenish a small-business loan program that’s been overrun by demand and to devote more money to hospitals and coronavirus testing.
President Donald Trump tweeted his support, pledging to sign it into law. It now goes to the House, with votes set for Thursday.
“I urge the House to pass the bill,” Trump said at the White House.
The legislation, which came together over days of negotiation that followed a partisan standoff, would increase funding for the Paycheck Protection Program by $310 billion. It would also boost a separate small-business emergency grant and loan program by $60 billion, and direct $75 billion to hospitals and $25 billion to a new coronavirus testing program.
The Paycheck Protection Program was designed to help businesses that have fewer than 500 workers, but a number of larger companies found ways to obtain the funds in the past two weeks, leading to bipartisan anger. Treasury Secretary Steven Mnuchin said Tuesday that larger businesses would be blocked from using this program, and Trump called on some big companies that had already obtained taxpayer-backed loans to return the money.
The new legislation comes on top of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, that became law last month. The government commitment to fighting the pandemic would be nearly $3 trillion if the House were to pass and the president were to sign the new legislation.
“The Senate is continuing to stand by the American people,” Senate Majority Leader Mitch McConnell, R-Ky., said to an almost empty chamber.
Democratic lawmakers say there should be more. Speaking on the Senate floor shortly before the legislation passed by voice vote, Senate Minority Leader Chuck Schumer, D-N.Y., said lawmakers needed to quickly begin work on another piece of legislation.
“I’d remind my colleagues this is an interim measure,” Schumer said. “There’s plenty of hard-won provisions that we Democrats are pleased with, but it’s ultimately a building block. In the weeks ahead, Congress must prepare another major bill similar in size and ambition to the CARES Act. The next bill must be big and bold and suited to the needs of a beleaguered nation.”
McConnell disagreed. In an interview with The Washington Post after Tuesday’s vote, McConnell said it was time to “push the pause button” on additional spending legislation, at least until lawmakers are able to return to the Capitol in person. That’s scheduled to happen May 4.
McConnell said the impact on the deficit and debt is becoming a concern, and the best stimulus is for the economy to start functioning again. He said he was pleased that that was gradually beginning to happen.
“Waving $2.7 trillion through the Senate and the House on voice votes is not the way the Congress was set up to function,” McConnnell said.
McConnell declined to offer an estimate of how much money Congress might ultimately devote to fighting the pandemic.
REPLENISHING FUND
The focus of the new bill was renewing the Paycheck Protection Program. The Coronavirus Aid, Relief and Economic Security Act created the $349 billion small-business forgivable-loan program that was designed to incentivize businesses to keep workers on the payroll. The White House said the small-business initiative ran out of money last week amid overwhelming demand as the economy cratered and millions of people were laid off.
Two weeks ago the White House asked Congress for $251 billion to replenish the fund, but Democrats refused to do so without their demands being met, finally resulting in the deal that was finalized Tuesday, hours before it passed in the Senate.
Democrats fought successfully for money for hospitals and testing in the bill, but failed to get Republicans and Trump administration officials to go along with their demands for $150 billion for cities and states. Schumer said he hopes to see that addressed in the next package, and Trump has indicated that he is open to such a move.
However, there are already signs that the $310 billion set aside for the Paycheck Protection Program still might not be enough to meet surging demand for the loans.
PNC Bank has told customers that there might not be enough capacity in the program to fund all loan requests, and has said any changes dictated by the White House or Congress could complicate matters further.
“Unfortunately, with the significant volume of applications already submitted to PNC and other lenders, it is likely that not every qualified applicant will receive loan proceeds under the PPP even if Congress authorizes additional funding,” PNC wrote on its website.
Schumer said he, House Speaker Nancy Pelosi, D-Calif., Mnuchin and White House Chief of Staff Mark Meadows were on the phone “well past midnight” to finalize the deal and that “we came to an agreement on just about every issue.”
The deal had been on the verge of completion for several days, but Democrats and administration officials have been wrangling over final details, including the design of the new $25 billion coronavirus testing program. Democrats were pushing for a national approach as Republicans sought more flexibility for states.
The final agreement seems to strike a balance, requiring plans from states and localities on how they will utilize the testing funds, and requiring a strategic plan on providing assistance to states for increasing testing and testing capacity.
Currently, the U.S. has tested roughly 4 million people for the virus, or just over 1% of its population, according to the Covid Tracking Project website.
SENATORS REACT
Arkansas’ U.S. Sen. John Boozman supported the measure.
“The Paycheck Protection Program is an important tool to help Arkansas small businesses remain operational during the coronavirus pandemic and viable in the future. The restoration of funding to this program will support workers and small businesses in the Natural State and all across America,” the Republican from Rogers said in a written statement.
U.S. Sen. Mike Lee, R-Utah, said it was “unacceptable” that the full Senate was not present and voting in the pro forma session as Congress shut down during the virus outbreak.
U.S. Sen. Rand Paul, R-Ky., said no amount of federal funding will be able to salvage a shutdown economy. “Deaths from infectious disease will continue, but we cannot continue to indefinitely quarantine,” said Paul, who tested positive for the virus last month but has since recovered.
“Even more alarming than the money is the idea that one senator can stand on the floor and pass legislation spending half a trillion dollars and have no recorded vote and no debate,” said Paul, a libertarian. He said he had returned to Washington “so that history will record that not everyone gave in to the massive debt Congress is creating.”
House majority leader, Rep. Steny Hoyer, D-Md., said the House will also vote Thursday on a proposal to allow proxy voting on future business during the pandemic, a first for Congress, which has required in-person business essentially since its founding.
“The House must show the American people that we continue to work hard on their behalf,” Hoyer wrote to colleagues.
But the rules change met with objections from conservative Republicans.
“I don’t support it at all,” said Rep. Clay Higgins, R-La., one of a handful of Republicans who showed up for Tuesday’s pro forma session to protest proxy votes. “Congress should be in session.”
Signaling concerns, House Minority Leader Kevin McCarthy, R-Calif., wrote Pelosi seeking more information on plans to reopen the House.
The Paycheck Protection Program allows companies with fewer than 500 employees to obtain loans from banks to mostly cover payroll costs. If the businesses retain employees and meet other requirements, the loans will be forgiven, paid off by taxpayers.
There has been a surge in applications for these loans, and the first $349 billion was disbursed in less than two weeks when 1.6 million companies secured funding. But many other companies were unable to obtain loans.
MEASURE’S AIMS
Of the new money designated for the Paycheck Protection Program, $60 billion would be reserved for lending by small and medium financial institutions. Provisions would require participation by lending institutions serving minority or underserved areas, such as community financial development institutions and minority depository institutions, language sought by the Congressional Hispanic Caucus and others. An additional $11 billion is included for administrative costs, meaning the total Paycheck Protection Program spending in the bill is $321 billion.
The deal also includes another $60 billion in emergency loans and grants for a separate Small Business Administration program that is out of money and would allow agricultural companies to qualify for these funds, as sought by some GOP senators.
If this agreement becomes law, it will be the fourth coronavirus-related bill enacted in the past two months. Lawmakers have scrambled to deal with the economic wreckage caused by the pandemic, which has led more than 22 million Americans to file for unemployment benefits and many businesses to close.
Despite McConnell’s intention of pausing action for now, lawmakers and the Trump administration have been discussing what could be in the next package. In addition to money for cities and states, Trump tweeted Tuesday that he wants the next package to include “much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth.”
The $25 billion for testing and contact tracing in the legislation that passed in the Senate on Tuesday includes $11 billion for states, $1 billion for the Centers for Disease Control and Prevention, $1.8 billion for the National Institutes of Health, $1 billion for the Biomedical Advanced Research and Development Authority, $1 billion for testing the uninsured, $22 million for the Food and Drug Administration, and $825 million for Community Health Centers, rural health centers and others.
There’s also pressure to help cities with populations of less than 500,000 that were shut out of the $2 trillion relief bill that passed last month.
Schumer said Monday that he had talked to Federal Reserve Board Chairman Jerome Powell and that Powell said the Fed is working to open up the Main Street Lending program to nonprofits and municipal governments.
USNS COMFORT PLAN
Senate approval of the latest relief package came as Southern states took their first tentative steps toward reopening. The death toll from the virus climbed past 45,000, and the stock market fell for a second-straight day, as global markets retreated and oil prices continued their record slide. Confirmed cases in the U.S. topped 824,000, according to a running tally by Johns Hopkins University.
Even as the measure was being completed, Gov. Andrew Cuomo of New York met with Trump at the White House to press for more federal assistance to expand testing for the virus, and more funds to help financially devastated state and local governments.
“I think it’s a terrible mistake not to provide money for the states,” he said in Buffalo, N.H., before traveling to Washington to meet with Trump. “I get small businesses; I get airlines. How about police? How about fire? How about health care workers? How about teachers? We’re not going to fund schools? I don’t get it.”
Meanwhile, a Navy hospital ship deployed to New York City to help fight the coronavirus outbreak is no longer needed, Cuomo said, expressing confidence that stresses on the hospital system are easing.
Cuomo said after meeting with Trump that the USNS Comfort was helpful but could now be sent elsewhere after being docked for weeks off of Manhattan.
At an evening news conference, Cuomo said having the ship had been worthwhile, even as the need for it didn’t reach the levels that had been projected.
“I believe Comfort not only brought comfort but also saved lives,” Cuomo said.
Trump said at his Tuesday briefing that he asked Cuomo if “we could bring the Comfort back to its base in Virginia so that we could have it in other locations.” Trump said they would reassign the ship soon.
The Navy ship arrived March 30 as state and city officials scrambled to add hospital beds to prepare for a potentially catastrophic surge in covid-19 cases. Information for this article was contributed by Erica Werner and Seung Min Kim Jeff Stein of The Washington Post; by Lisa Mascaro, Andrew Taylor, Matthew Perrone, Mary Clare Jalonick, Matthew Daly, Jennifer Peltz, Marina Villeneuve, Michael Hill, Karen Matthews and Carolyn Thompson of The Associated Press; by Emily Cochrane and Jim Tankersley of The New York Times; and by Frank E. Lockwood of The Arkansas Democrat-Gazette.