Small business rescue funds depleted with Congress deadlocked

“It’s not that we don’t share the values of small businesses, we do, we have been their champions,” Speaker Nancy Pelosi (D-Calif.) said in a call with reporters Thursday. “But in order for them to succeed, people have to be well, people need to be safe and we need to have state and local [funding].”

Staff for Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) are set to speak with Treasury Secretary Steven Mnuchin and his department on Thursday, according to several sources close to the negotiations. Trump told senators on a new economic task force in a phone call Thursday that he wants to work with Democrats to get a deal on the small business funds, according to a Democrat familiar with the call.

But congressional Republicans remain skeptical that Mnuchin will be able to cut a deal that all Senate and House Republicans will support, while Pelosi says Senate Majority Leader Mitch McConnell’s (R-Ky.) small business-only bill can’t pass the House unanimously.

The California Democrat, who went to great pains to tout Democrats’ support for small businesses during her weekly press call, said she was hopeful a deal would emerge from the talks with Mnuchin. But Pelosi insisted that Democrats weren’t relenting on the demands they outlined more than a week ago.

The Senate is scheduled for a 3 p.m. pro forma session, but Republicans do not currently expect to try and again pass their bill as they did earlier this month. A week ago, Democrats blocked the small business bill and McConnell blocked a bill from them that married the Paycheck Protection Program funding with $250 billion for hospitals and local governments.

Centrist Sen. Kyrsten SInema (D-Ariz.) expressed frustration with the impasse and endorsed a bill solely funding the Paycheck Protection Program: “The Senate should approve [additional] funding by unanimous consent ASAP. Small businesses need our help to survive during this emergency.”

But Democratic leaders haven’t budged, citing requests for more aid from governors in states like Maryland, Pennsylvania, Michigan and Wisconsin as they dig in.

“The question is of the Republicans, why are you ignoring your state?” Pelosi said Thursday. “We all know we want to help small business, why would you turn your backs on the hospitals who are delivering services?”

Senate Small Business Committee Chairman Marco Rubio (R-Fla.) called the Democrats’ stance “disgusting” on Twitter. He, like many Republicans, have said they are open to giving more money to other priorities but only after the exhausted Paycheck Protection Program fund is replenished.

“The notion that crucial help for working people is not appealing enough to Democrats without other additions sends a strange message about their priorities,” McConnell and House Minority Leader Kevin McCarthy (R-Calif.) said Wednesday night. “The cost of continued Democratic obstruction will be pink slips and shuttered businesses.”

The SBA said Thursday it will be unable to accept new loan applications while funding is tapped out and that it will not enroll additional lenders into the program. The agency said it approved more than 1.6 million loans so far.

House Small Business Chairwoman Nydia Velazquez (D-N.Y.) said a lack of data over who is receiving the loans “has left unanswered questions as to whether taxpayer funding is going to those the program was intended to serve.”

“Before Congress allocates billions of additional dollars, the administration must show a greater commitment to transparency,” she said.

Some on Capitol Hill believe the brinkmanship could continue until next week, or possibly until May if a deal is not reached quickly.

“We urge Congress to appropriate additional funds for the Paycheck Protection Program—a critical and overwhelmingly bipartisan program—at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks,” Mnuchin and SBA Administrator Jovita Carranza said in a joint statement Wednesday evening.

The impasse over funding is the latest setback for the aid effort, which was just beginning to disburse money to struggling small businesses after a rocky April 3 launch.

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