Senators push for changes to small business aid

Senators from both parties are pushing for changes to a small business aid program included in last month’s coronavirus relief bill following a rocky rollout.

The push for changes, both through legislation and regulatory guidance, comes as Congress is debating providing an additional $250 billion for the Paycheck Protection Program (PPP) on top of the $350 billion included in last month’s $2.2 trillion relief package.

Senador Pat Toomey (R-Pa.) sent a letter on Wednesday to Treasury Secretary Steven Mnuchin and Jovita Carranza, the head of the Small Business Administration, outlining issues in six areas, including technological concerns, as well as confusion about eligibility and how to apply.

“Over the past several days, I have been in constant communication with banks, credit unions, and potential borrowers from Pennsylvania to receive direct feedback about the program’s performance. As can be expected with the launch of a massive new program, Pennsylvania lenders have raised critical issues about the PPP,” he wrote.

The program, which launched on Friday, has sparked days of questions about who can apply and what restrictions banks can put on applications amid high interest in the aid as the coronavirus has caused businesses in large swaths of the economy to close and sparked historic unemployment claims.

Senador Marco Rubio (R-Fla.), who spearheaded the small business provisions in the stimulus package, noted in a tweet that he was working to get new details and guidance on Wednesday afternoon.

“Good news! Significant increase today in the number of lenders & loans in #PPP. Daily improvement continues & will accelerate as Treasury guidance has provided more clarity,SBA portals expandig [sic] & lenders get more faster,” he added in a follow-up tweet. 

Democrats have also pushed for changes before Congress signs off any additional money, including making sure the funds are able to be reach smaller businesses or minority-owned businesses.

“While I agree that we must continue to support this program through an increase of additional funds, we cannot do so in good conscience without addressing many of the issues that we’ve seen thus far,” Sen. jeff merkley (D-Ore.) wrote in a letter on Wednesday to Mnuchin and Carranza.

Senador elizabeth warren (D-Mass.) said that Congress should “dramatically simplify” the plan. She also asked that Treasury and SBA fix glitches with websites and that lawmakers get rid of the cap on total relief. If Congress passes the second round of funding, it would end up providing a total of $600 billion for the small business program.

“If anyone has any doubts about what needs to be done, just ask some small business owners. Millions of them have been put through hell over the past two weeks as they scrambled to try to get access to the money they desperately need,” Warren tweeted.

Rubio and Sens. Ben Cardin (D-Md.), Jeanne Shaheen (D-N.H.) and susana collins (R-Maine) spoke with Carranza about the small business aid program on Wednesday.

“Specifically, lenders need immediate and clear guidance on liquidity requirements as they issue this substantial quantity of loans. The administration has maintained that it’s up to the task of implementation but we continue to see unforced errors and delays,” Shaheen said after the call.

The Treasury Department released new guidance for the Paycheck Protection Program on Wednesday afternoon aimed at addressing top questions from borrowers and lenders. 

Senate Minority Leader charles schumer (D-N.Y.) and House Speaker nancy pelosi (D-Calif.) want to add hundreds of billions in new funding for hospitals, state and local governments and an increase in food assistance into a bill that provides the additional small business funding.

They also want to ensure that $125 billion of the new $250 billion in small business assistance is “channeled through community-based financial institutions that serve farmers, family, women, minority and veteran-owned small businesses and nonprofits.”

But Pelosi indicated during an interview with NPR on Wednesday that the White House had objected to their proposal. Senate Republicans are expected to try to pass the $250 billion in small business aid on Thursday, raising the prospect that Democrats object and block it amid the stalemate.

“The White House says they don’t support that, but we do,” she said, adding that the Senate GOP proposal “will not get unanimous support in the House.”