House Speaker Nancy Pelosi is pushing for nearly $1 trillion in state and local aid to make up for revenue lost during the Covid-19 pandemic and has argued that failure to enact the funding would lead to job losses. President Donald Trump said he’ll ask Congress to pass more economic stimulus, including a payroll tax cut.
Democrats and many Republicans are wary of a payroll tax cut, which wouldn’t help people who remain out of work. Trump has said it would encourage businesses to re-hire.
House Democrats passed an additional $3.5 trillion stimulus bill last month, including a new round of $1,200 checks to individuals and expanded unemployment insurance. But Republicans controlling the Senate have rejected that proposal and plan to wait until late July before considering their own alternative.
Praise for Small Business Program
Mnuchin praised the Paycheck Protection Program, the centerpiece of the $2.2 trillion relief package Congress enacted in March, for helping the economy recover and contributing to last Friday’s surprising jobs report. The PPP, designed to help small businesses keep employees on payrolls during the pandemic, kept 50 million workers employed, Mnuchin said.
The initial round of $349 billion in PPP funding was exhausted after just 13 days in April. But there was more than $130 billion still remaining as of June 6 from the second tranche of $320 billion, according to SBA. Mnuchin said he expects there will be PPP funds remaining when SBA stops accepting new applications on June 30 and that he’s open to working with Congress to re-purpose that money.
Republican Senator John Kennedy of Louisiana suggested using some of those funds to help businesses damaged by rioting and looting after the death of a black man, George Floyd, in the custody of Minneapolis police in May.
Mnuchin also said borrowers who use less than 60% of PPP proceeds on payroll will be eligible for partial loan forgiveness. There had been questions about whether those borrowers could get any forgiveness because of the language in legislation relaxing the rule that 75% of proceeds had to be spent on payroll.
There were complaints from several senators about the separate Economic Injury Disaster Loan Emergency program, or EIDL, which provides loans of as much as $2 million and grants of as much as $10,000. Some owners said they waited weeks for funding or even answers, while advances were limited to $1,000 per worker with loans capped at $150,000.
Carranza said the limits were made because of demand with more than 5 million loan applications alone, but that the remaining loan applications should be processed by next week.
Senators from both parties pressed Mnuchin and Carranza to provide more data about the relief programs, especially which companies received loans. But Mnuchin said the administration considers that information proprietary.
This article was provided by Bloomberg News.