House Republicans push to reopen Paycheck Protection Program amid coronavirus relief gridlock
There's roughly $138B remaining in the program, which was created earlier this year
Charter Holdings CEO Ray Washburne argues the restaurant industry is on track for more permanent closures without more PPP money.
House Republicans are pushing to reopen a key federal relief program designed to keep small businesses afloat during the coronavirus pandemic — and will try to quickly force a vote on the newly introduced legislation.
Reps. Steve Chabot, R-Ohio, and Jaime Herrera Beutler, R-Wash., on Wednesday introduced a proposal to extend the Paycheck Protection Program, allowing small businesses with fewer than 300 employees to apply for a second loan through the rescue fund, along with a so-called discharge petition to expedite voting on the measure.
There's roughly $138 billion remaining in the program, which was created earlier this year when Congress passed the $2.2 trillion CARES Act. The $670 billion program, which provided more than 5 million small businesses with a one-time cash injection to pay workers and rent, preserving some 51 million jobs, closed to new applicants on Aug. 8.
Although there's widespread bipartisan support to repurpose the leftover money for struggling smaller businesses, Congress is in the midst of a month-long standoff over another coronavirus relief deal. Democrats have rejected piecemeal legislation, with House Speaker Nancy Pelosi refusing to consider legislation unless it's worth at least $2.2 trillion.
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"America's small businesses are absolutely critical to the economy," Chabot told FOX Business. "Many of them are still hurting out there and really need the help. I think we ought to be there to assist them."
Under the legislation, small businesses could apply for a second PPP loan if they have fewer than 300 workers and have seen their gross revenue plummet by at least 25% as a result of the virus-induced crisis. The bill would also set aside $25 billion for small businesses with fewer than 10 workers.
Businesses would have until Dec. 31 to apply for the loans.
Without additional aid, economists have warned that small businesses face a wave of layoffs and bankruptcies this fall. The loans covered 24 weeks of payroll; but as the pandemic continues to weigh on the nation's economy, that money could end up being a bridge loan to nowhere, Herrera Beutler told FOX Business.
"I’ve had so many business leaders in my communities, Main Street businesses, say 'thank you for the PPP, it worked, it was helpful, it was definitely a bridge.' This crisis is not over, and if we do not extend it, this is going to be a bridge to nowhere."
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When the program first launched in April, some small businesses worried that confusion and uncertainty around the loan's rules, particularly regarding forgiveness, could potentially leave them on the hook for the money.
But the latest legislation would ease restrictions on how the money must be spent in order for the federal government to forgive it and essentially transform it into a grant. Borrowers would be able to spend the money to cover supplier costs, operating expenditures like software and cloud computing, and property damage that was the result of vandalism and looting.
"This is an absolutely crucial lifeline," Herrera Beutler said. "To me, Congress has no business packing up and going home before we have extended the Paycheck Protection Program. I think it's kind of been a political football, held hostage. The goal here is to release that and bring it to vote."
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By introducing the seldom-used discharge petition, the legislators could try to force a floor vote on the legislation by gathering a simple majority of signatures beginning next week, Chabot said. They would need 218 signatures to move to a vote. Republicans control 198 seats in the House, meaning they would need to secure the support of at least 20 Democrats.
Chabot said he believes that virtually all Republicans would support the measure, and hoped to secure the backing of some moderate Democrats who are facing pressure from their constituents, as well.
"I believe it has a good chance," Herrera Beutler said.