The deadline was Tuesday for the Paycheck Protection Program, which was created by Congress in March to provide small businesses with payroll and expense relief during the pandemic. About $130 billion of the original $670 billion set aside has remained unclaimed.

Late Tuesday, Senate Democrats attempted to pass a bill by unanimous consent to extend the program. Lawmakers were surprised when that succeeded, a senior Democratic aide said. They had expected a Republican to object, but none did.

The bill passed the House with no objections on Wednesday and now heads to the president’s desk for a signature. The White House hasn’t said whether President Trump supports the bill.

“It is certainly something to celebrate, but I would’ve hoped that our two parties could have worked this out before last night, as a small part of much broader legislation to address the many challenges posed by Covid-19, rather than a consent request forcing Republicans to act,” Senate Minority Leader Chuck Schumer (D., N.Y.) said on the Senate floor on Wednesday.

The $670 billion Paycheck Protection Program for businesses with fewer than 500 employees is the largest single element of the government’s $3.5 trillion in spending in response to Covid-19. It has been popular with small businesses, though economists, business owners and bankers say the PPP left behind the most vulnerable companies, many of which were forced to shut down and unable to rehire workers.

Lawmakers from both parties are also looking at ways to repurpose the funds should they not all be used.

Senate Democrats have proposed legislation that would allow small businesses to take out a second PPP loan if they have 100 or fewer employees. Sen. Marco Rubio (R., Fla.), chairman of the small-business committee, said this week he wants the next round of the PPP to be targeted at “truly small businesses” and provide financing to underserved communities to ensure minority-owned businesses, particularly Black-owned businesses, have access to capital.

The extended deadline sets up a new timeline for Congress to pass its next phase of coronavirus relief and economic stimulus, coming on the heels of the expiration of a $600 extra weekly payment to those receiving unemployment at the end of July. Republicans and Democrats are at odds over whether to continue the program.

Democrats in the House passed a roughly $3.5 trillion relief bill last month that was seen as a starting line for negotiations. The massive bill extended the extra unemployment-insurance payments and gave direct payments to Americans, but didn’t give more money to the PPP initiative.

Senate Republicans have expressed caution about spending more money and have waited for July to begin working on the next bill. Negotiations are expected to start in earnest when lawmakers return from Independence Day recess.

President Trump hasn’t taken a clear stance on extending PPP. He said on Wednesday he supported direct payments, but didn’t support extending extra unemployment insurance benefits.

“You would make more money if you don’t go to work,” he said in an interview with Fox Business. “That’s not what the country is all about. And people didn’t want that. They wanted to go to work, but it didn’t make sense, because they make more money if they didn’t.”

Steve Niehaus, MBA, CBI
[email protected]
239.565.3171