House to vote on $484B coronavirus relief bill to replenish small-business fund
Money for the program ran dry within two weeks
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House representatives are voting Thursday on a $484 billion coronavirus relief package that will boost the tapped-out small business loan program, the latest effort by lawmakers to bolster the stalled U.S. economy.
The package, which passed the Senate on Tuesday and will head to President Trump for his signature after the House approves it, includes $310 billion for the Paycheck Protection Program, established to help small businesses maintain workers on their payroll during the virus outbreak.
There is also $75 billion for hospitals, with a special focus on those in rural areas, $25 billion to expand testing for COVID-19 and $60 billion in loans and grants for a separate Economic Injury Disaster Loan program.
It will add to the already unprecedented levels of federal spending. Last month, Congress passed the $2.2 trillion CARES Act, which first created the $349 billion Paycheck Protection Program.
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House Speaker Nancy Pelosi of Calif. arrives to read a statement outside her office on Capitol Hill March 23, 2020, in Washington. (AP Photo/Andrew Harnik, Pool)
But money for the program ran dry within two weeks, prompting anger from the business community.
The aid can be used for payroll and other expenses, like insurance premiums, mortgages, rent or utilities through June 30. As long as 75 percent of the money goes toward keeping workers employed and maintaining salary levels, the loans, which are guaranteed by the federal government, will be fully forgiven.
In their haste to get life support to small businesses, Congress did not exclude publicly traded companies or limit market value in the economic-relief plan that passed last month. Regardless of how much cash a company had in the bank, if the business could show any loss as a result of the virus outbreak, it qualified for a small-business loan through the PPP, according to an SBA source.
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That opened the program to a slew of big firms that could have received help via different avenues, like the Federal Reserve.
At least 75 publicly traded companies -- some with market values well over $100 million -- tapped the government-backed Paycheck Protection Program, receiving a combined $300 million in low-interest loans, according to a recent Associated Press analysis.
The loans were among the 4,412 approved by banks and the Small Business Administration worth $5 million or more, according to SBA data. The total amount of loans approved for at least $5 million totaled $30.9 billion — or about 9 percent of all those approved. The size of the typical loan nationally was $206,000, according to the data.
The backlash against the program began this week, after national restaurant chains that employed thousands of workers before the crisis secured millions of dollars in small-business loans. Among the companies were Potbelly Corp., the nationwide sandwich shop chain, Ruth's Hospitality Group, which operates a series of steakhouses, and Shake Shack.
Congressional leaders were unable to secure an agreement that would allow lawmakers to pass the legislation via unanimous consent. Many in the chamber will be required to return to Washington from their home states, facing the possibility of objection from members of either party.
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The House is planning to take precautions during the vote by adhering to social distancing guidelines.
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Congress isn’t scheduled to return to Washington until May 4