Treasury Secretary Steven Mnuchin asked Congress on Tuesday to add $250 billion to the small business aid program that went into effect last week as part of the federal response to the coronavirus pandemic. The funds would supplement the $350 billion already designated by Congress for the Paycheck Protection Program, part of the more than $2 trillion aid package signed into law two weeks ago.
Mnuchin said he had spoken with Senate Majority Leader Mitch McConnell, Senate Minority Leader Schumer, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy about the request. McConnell said he hoped to put the request up for voice vote in the Senate in a pro forma session on Thursday.
However, a spokesperson for Schumer said the request may need to be discussed. Some Democrats have expressed concern that the program is benefiting small businesses that have pre-existing relationships with the banks administering the program while leaving behind those that do not.
“Without proactive and sustained outreach, we can expect that underserved communities will be disproportionately harmed,” a group of Democratic senators said in a statement.
Strong interest so far: The program has been met with tremendous demand, despite a rocky start last Friday, with tens of thousands of small business owners, sole proprietors and independent contractors applying for funds to help tide them over during the unprecedented economic slowdown. The loans are limited to $10 million or 250% of payroll and are eligible for forgiveness if the money is used for overhead and employee pay.
As he met with bank executives Tuesday at the White House, President Donald Trump said that the Small Business Administration had already processed $70 billion in guaranteed loans. Banks still need to complete the loan processes and distribute the funds.
More aid on the way: The request for additional funds comes amid a growing consensus that the $2 trillion aid package won’t be enough to sustain the millions of Americans affected by the economic plunge. House Speaker Nancy Pelosi said this week that another $1 trillion is needed, and President Trump has indicated that another significant aid package is under consideration.
Chris Krueger of Cowen Research said Tuesday he expects Congress to pass one or more coronavirus relief packages worth roughly $1.5 trillion in the next few weeks. In addition to more small business aid, he said lawmakers will likely provide direct cash payments, assistance to states, and more money for the health care system and social safety net programs. “The fourth COVID-19 related piece of legislation is now likely a question of when, not if,” Krueger said in a research note. “This is not aimed at stimulus/recovery. The policy response remains focused on disaster relief.”
Hazard pay? Senate Minority Leader Chuck Schumer said Tuesday that Democrats are proposing hazard pay of up to $25,000 for workers dealing with the coronavirus crisis, including doctors, nurses, truck drivers and grocery clerks. The bonus would be available to workers making less than $200,000 a year; those earning more than that would receive $5,000. Democrats have also discussed recruitment payments of $15,000 to attract and keep essential workers, The Hill reported.