A Republican effort to pass a bill easing terms for business owners who take out Paycheck Protection Program loans fell short Thursday as senators headed home for a weeklong Memorial Day break.
The bill, offered on the Senate floor by Sen. Susan Collins, a Maine Republican, and pushed hard by Florida Republican Sen. Marco Rubio, would have given loan recipients twice as much time in which to use the PPP loans.
While the bill had bipartisan support, trying to pass the bill in one day meant it faced an uphill battle of needing signoff by all 100 senators, which it was unable to garner.
But even attempting to move the bill marked something of an about-face by Republicans, who had resisted acting on new coronavirus-related bills until they were able to see how past efforts were faring. It also came after Democrats had criticized Republicans for inaction and new data showed more than 2 million new claimants for jobless benefits, indicating Senate Republicans are feeling the political heat for their stance favoring a pause in legislation.
Under the PPP, small businesses are able to get their loan amount forgiven if they maintain the same number of employees and do not cut their pay by more than 25% for eight weeks after the loan is made. The bill would increase that time to 16 weeks in total. That would give businesses additional time to wait for local COVID-19 lockdowns to end before trying to call workers back.
Collins also said the bill would extend the deadline for businesses to apply for loans from June 30 to Dec. 31, allow loan funds to be used for personal protective equipment and investments needed to reopen safely, and hold lenders harmless for changes in program guidance issued by the Small Business Administration and the Treasury Department.
The House is expected to take up similar, though not identical, legislation next week that would also extend the window in which businesses can use the money.
Rubio, who largely designed the PPP in March, told reporters Thursday at the U.S. Capitol he was unsure whether it would pass. “I expect us to offer it and what seems to be a pretty broad agreement, but you just never know when you ask 100 people’s opinion whether one is going to object to it for potentially unrelated reasons,” Rubio said.
The PPP, which aims to help small businesses hurt by the coronavirus crisis, was established in late March and has received $670 billion in funding through the $2.2 trillion CARES Act and April’s $484 billion relief package.
Restaurant executives on Monday pressed President Donald Trump to extend the deadline to 24 weeks from eight weeks, and he said their request was “very reasonable.”
Treasury Secretary Steven Mnuchin talked up an extension on Thursday in a live interview with The Hill, saying “that’s something we definitely want to fix — doesn’t cost us any more money and there is bipartisan support.” But he signaled he remains opposed to doing away with a rule that requires that 75% of a PPP loan’s proceeds go toward payroll expenses.
“Let me just remind people — it’s called the Paycheck Protection Program. It’s not called the Overhead Protection Program,” Mnuchin said. “We believe that the 75% was exactly consistent with the way the program was designed.”
House Democrats’ sweeping $3 trillion aid package that passed Friday includes an extension, an elimination of the 75% rule and other changes to the PPP, but that broad measure is overall a non-starter for Republican lawmakers.
Democratic Rep. Dean Phillips of Minnesota, who has co-sponsored the standalone House bill targeting the PPP with GOP Rep. Chip Roy of Texas, said last week that he agreed to vote for House Democrats’ $3 trillion package in part because he got a commitment that there would be a vote on his measure. Phillips and Roy’s bill is called the Paycheck Protection Flexibility Act, and it includes an extension, an elimination of the 75% rule and other changes.
Read more:Small businesses could get more time to spend emergency loans, as Democrats and Republicans back extension
Adding to pressure, the Labor Department on Thursday morning reported there were more than 2.4 million new applications for unemployment assistance last week, bringing the total since virus-related lockdowns began in mid-March to more than 35 million.
Republican senators had planned to head home without considering any additional legislation, a stance some said was encouraged by Trump in his lunch meeting with them Tuesday. Earlier Thursday, Majority Leader Mitch McConnell, a Kentucky Republican, had teased House Democrats about being absent this week, offering to send his colleagues to the other side of the Capitol “to collect their newspapers and water the plants.”
But cracks in Republicans’ party solidarity began to appear late Wednesday when Sen. Cory Gardner of Colorado and Collins said they would object to leaving for the weeklong Memorial Day break today unless there was action on a coronavirus bill.
Collins and Gardner are considered to have among the toughest routes to reelection this year.
“We’ve got more work to do. This is a major change if we get the agreement, but you know, we’re close,” Gardner said of the new PPP push.
House Speaker Nancy Pelosi said Thursday she was confident McConnell would move a broader bill, though she did not say when. “I think he will. I think he wants to put some things on the table,” she said.