New pressure on lawmakers as virus aid for firms hits limit

WASHINGTON — Lawmakers struggled Thursday to break a stalemate over President Donald Trump’s $250 billion emergency request for a small-business program, stoking uncertainty about when additional support will be available in a key rescue program now exhausted of funds.

A Senate session quickly adjourned without any progress, though staff aides to House and Senate Democrats and Treasury Secretary Steven Mnuchin convened another conference call, on legislation to shore up the Paycheck Protection Program and demands by Democrats for potential additions. The Small Business Administration announced Thursday it has reached its $349 billion lending limit and is no longer accepting applications.

At issue is a $349 billion Paycheck Protection Program that is a centerpiece of last month’s massive rescue bill. The Congressional Budget Office issued an estimate for the legislation, passed virtually unanimously last month, pegging its deficit cost at $1.8 trillion. That’s less than the $2.2 trillion informal White House estimate, and the difference is because the CBO believes an almost half-trillion-dollar loan guarantee program designed to stabilize large companies and state and local governments won’t have deficit costs because the money would be paid back.

The program gives grants to businesses with fewer than 500 workers so that they can maintain payroll and pay rent while shutting down their businesses during social distancing edicts.

The program has been swamped by businesses applying for loans and has reached its appropriations limit. Mnuchin says $250 billion more is needed immediately.

But Democrats also want money for hospitals burdened under COVID19 caseloads and additional funding for states and local governments straining as the economy slides into recession.

They also want to make sure the Paycheck Protection Program is opened up more to businesses that don’t have established relationships with banks that have been accepting applications for rescue funding.

House Majority Leader Rep. Nancy Pelosi, D, is pressing to add money to be distributed by community development financial institutions, which are small, nontraditional lenders that focus on making loans in underdeveloped and underserved neighborhoods.

Republicans are agitating to help rural hospitals, while Democrats are also keen to boost aid to cash-strapped states and local governments whose revenues have cratered.