The White House and Congress have reached a deal on a new funding package that will replenish a lending program meant to aid small businesses impacted by the novel coronavirus outbreak, two administration officials confirmed on Tuesday.
Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows struck an agreement on the core components of the deal with Senate Democratic Leader Charles Schumer (N.Y.) and Speaker Nancy Pelosi (D-Calif.) early Tuesday morning.
Schumer announced the deal during an interview on CNN shortly after 8 a.m. Tuesday and White House officials confirmed after 1 p.m.
Final details of the package are forthcoming but it is expected to total more than $450 billion and provide roughly $300 billion for the Small Business Administration’s popular Paycheck Protection Program (PPP), and $50 billion for the Economic Injury Disaster Loan program, $25 billion for testing and $75 billion for hospitals.
Schumer announced that $125 billion of the money for PPP will be set aside for “under-banked” small businesses that don’t have strong relationships with local banks, such as small restaurants and hair salons.
President Trump urged the House and Senate to pass the legislation in a pair of tweets Tuesday afternoon and laid out his vision for what would be included in the next round of coronavirus legislation.
“After I sign this Bill, we will begin discussions on the next Legislative Initiative with fiscal relief … to State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth,” the president wrote.
The Trump administration and congressional negotiators have been locked in negotiations over a deal to replenish the $350 billion for the PPP, which was authorized in the third coronavirus relief package signed by Trump at the end of March and ran out of funds to lend small businesses last week.
The program allows small businesses to keep workers on the payroll and in some cases has aided shops from going under completely amid the downturn. Social distancing measures and stay-at-home orders in some states meant to slow the spread of the virus have hit small business owners particularly hard.
The Senate and House will need to pass the legislation. Doing so this week will require the Senate to pass the bill in unanimous consent.
Along with Schumer, GOP Sens. Shelley Moore Capito (W.Va.) and Chuck Grassley (Iowa), who are both members of GOP leadership, expect the deal to pass the Senate at 4 p.m.
The House is expected to vote on the legislation Thursday if the Senate passes it Tuesday.
The small business lending program has come under scrutiny this week after it was revealed that large corporations like chain restaurants and hotels were able to tap into the funds. The CEO of burger chain Shake Shack said Monday the company was returning $10 billion in loans that it received through the program because the company is “fortunate to now have access to capital that others do not.”
The launch of the program was marred by confusion as thousands of businesses flooded the system to apply for loans. Banks and industry officials also expressed frustration over the lack of clarity in the program’s lending set up.
Jordain Carney contributed.