Business owners in Glendale and Peoria will have to wait, as a program designed to help small businesses quickly ran out of money.
Meanwhile, Congress wrangles over plans to add another $251 billion to the original $349 billion in the Paycheck Protection Program.
Under the program, businesses can get government-backed loans through approved banks, with loans being forgiven if business owners can show they used the money to keep their workers employed.
The program launched April 3 to overwhelming demand. The program was also plagued by shifting regulations as small-business owners flocked to apply for federal dollars.
Lawmakers and officials on both sides of the aisle called for a quick solution to the problem recently, and Rep. Tom O’Halleran, D-Sedona, said he expects the program to be funded soon.
But problems emerged when a GOP plan to add the extra PPP funding stalled in the Senate, as Democrats called for the bill to help other relief programs that are also running out of money and to include fixes to the small-business loan program.
Senate Majority Leader Mitch McConnell said he was surprised Democrats balked at his “simple proposal,” to add the extra $251 billion without “changing any policy language that both sides have already negotiated together several weeks ago.”
“I want to add more money to the only part of our bipartisan bill that is currently at risk of running out of money, so I was surprised to see this simple proposal met uneasily by the Democratic leadership,” McConnell said on the Senate floor.
But Democrats charged McConnell with refusing to negotiate over other issues they want fixed alongside the extra money for PPP. O’Halleran and others rejected McConnell’s “our way or the highway” attitude, pointing to glaring “problems in the system that have to be addressed.”
One such problem, he said, was that banks partnered with the Small Business Administration were giving preferential treatment to larger businesses.
“It was a free-for-all,” O’Halleran said. “There’s way too much ability of the banks to turn into, ‘We’ll take care of our customers first and the heck with anybody else,’ that has to stop.”
Amanda Fischer, policy director at the liberal think tank Washington Center for Equitable Growth, said Congress needs to make the program more fair and equitable.
But in a statement, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza pointed to data they said proves small businesses have an equal shot at receiving a PPP loan.
“The vast majority of these loans—74% of them—were for under $150,000, demonstrating the accessibility of this program to even the smallest of small businesses,” their statement said. “The Paycheck Protection program is saving millions of American jobs and helping small businesses get through this challenging time.”
While the stalemate over additional funding is “frustrating,” Fischer lauded Democrats for “trying to rejigger the second pot of money to make it a bit more equitable.”