According to sources, the U.S. Senate will rush to pass another $250B bailout for small businesses in response to the overwhelming demand for loans under the SBA’s Paycheck Protection Program (PPP). As it stands, the PPP’s $350B fund is on pace to run out, requiring further congressional action.
Senate Majority Leader Mitch McConnell said on Tuesday, “It is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry. That cannot happen.” So, McConnell aims to bring a measure to the Senate floor tomorrow (April 9) for a voice vote. Additional funding, if ultimately voted into law, would bolster the PPP until another—more comprehensive—stimulus package can be agreed upon.
Whether this short-term move by McConnell will be successful is another story. Speaker of the House Nancy Pelosi and Senator Chuck Schumer have their own agenda when it comes to such a bill. They are pushing for an additional $100B for hospitals and community health centers; $150B for state and local governments dealing with depleted tax revenues; and a 15% increase in benefits for food assistance programs for eligible families. With respect to the $250B to boost the PPP—which Democrats and Republican lawmakers, alike, agree is necessary—Pelosi and Schumer seek to partition half of that funding for “community-based financial institutions” in a bid to help minority-owned, rural, and veteran-owned businesses.
Whatever form it takes, the bill to be presented by McConnell (which will require passage in the House as well) will be just a stepping stone to ensure funding for small businesses does not disappear. Longer term, Congress is poised to negotiate a sequel to the CARES Act, which Pelosi and Schumer said “must provide transformational relief as the American people weather this assault on their lives and livelihood.”
Of course, Michelman & Robinson will continue to monitor and report on this legislation.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.
