WASHINGTON (Reuters) – Republicans in the U.S. Senate and the Trump administration on Tuesday warned that a key program to help small businesses survive the coronavirus pandemic was running out of money, pressuring Democrats to agree on an emergency infusion of aid.
Senate Majority Leader Mitch McConnell warned that the $349 billion Paycheck Protection Program could run out of money this week unless Democrats agree to let a Republican bill adding $250 billion in forgivable loans pass by unanimous consent.
Democrats favor the $250 billion infusion but want broader legislation that would ensure PPP financing for minority-owned and rural businesses, and add assistance for hospitals, state and local governments and the poor. Republicans oppose the Democratic measure.
“There is no time to insist on sweeping renegotiations or ultimatums about other policies,” McConnell, the top Senate Republican, said in a statement. “Clean funding for worker pay in a crisis should not be controversial.”
Larry Kudlow, a top economic adviser to President Donald Trump, said that one million loans worth $250 billion have now been approved, a total equaling about 70% of the program’s resources. He also warned in a Fox Business interview that the program could run dry in coming days.
But Pelosi re-emphasized Democratic opposition to the Republican proposal.
“We cannot accept Leader McConnell’s proposals that would only perpetuate the flaws that are threatening the survival of the most vulnerable small businesses and would do nothing to aid desperate hospitals and state and local governments,” she said in a letter to Democratic lawmakers.
McConnell said the Senate, whose members have largely left Washington due to the pandemic, will not reconvene until May 4.
Pelosi, the top Democrat in the House of Representatives, also called on the Federal Reserve to allow nonprofit groups including colleges and universities access to a lending facility intended to help businesses cope with the coronavirus outbreak.
She said larger institutions, including those that serve minorities, are being excluded from the Fed’s $600 billion Main Street Lending Facility.
“Unfortunately, the administration and the Fed, as of today, are excluding nonprofits,” Pelosi told her Democratic colleagues. “This is a significant blow in particular to entities that are also ineligible for the Paycheck Protection Program.”
The Main Street Lending Facility, made possible by the $2.3 trillion coronavirus legislation that Congress passed last month, is one of the Fed’s linchpin programs for dealing with the economic impact of the coronavirus outbreak, which has shut down much of the country.
The program is aimed at helping companies with fewer than 10,000 workers or less than $2.5 billion in revenue.
(Reporting by Susan Heavey, Susan Cornwell and David Morgan; Editing by Steve Orlofsky, Tom Brown and Cynthia Osterman)