Last week, Senate majority leader Mitch McConnell warned that the $349 billion fund for small businesses (known as the Paycheck Protection Plan) would soon run dry, and he asked the Senate to agree by unanimous consent to increase the amount of funding by $250 billion.
Democratic leaders rejected the proposal, demanding additional funding for hospitals, state and local governments, and the SNAP program.
Today, less than two weeks since businesses were allowed to apply for PPP forgivable loans and as the number of people filing for unemployment benefits hit 22 million, the Small Business Administration announced it is “currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.”
While the stalemate continued on Thursday, one Democratic senator, Kyrsten Sinema of Arizona, broke with her party’s leaders and urged the Senate to approve additional funding by unanimous consent:
Sinema siding with GOP over Dem leaders who want to hold out for more hospital/local funds in addition to small business funds https://t.co/qT5q1l5WhB
— Burgess Everett (@burgessev) April 16, 2020
The Paycheck Protection Plan offers businesses with fewer than 500 employees loans to cover up to two months of their average monthly payroll costs, plus an additional 25 percent to pay for things like rent and utilities. The loans will be forgiven in proportion to the percentage of employees who remain employed.
If the program isn’t replenished, that will not only threaten the livelihoods of small businesses and their employees, the absence of economic relief will put a great deal of pressure on governors to lift “social distancing” restrictions sooner than they might think is prudent.