WASHINGTON -- The Trump administration's demand for $250 billion in new funding for small businesses provoked a high-stakes standoff Wednesday as congressional Democrats rejected the no-strings-attached request and countered with an expensive counteroffer.
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y., said any package that included $250 billion in new small-business funding would need to include more than $250 billion in extra money for hospitals, state and local governments and food-stamp recipients.
President Donald Trump and Treasury Secretary Steven Mnuchin are seeking the extra small-business money after banks fielded more than 400,000 loan requests in less than a week for firms trying to navigate the economic fallout from the coronavirus pandemic. Mnuchin told Democrats on Wednesday that $100 billion in loans had been approved, and that the program was authorized for $349 billion in funding as part of the $2 trillion law that passed late last month.
The White House wanted the Senate to vote on the measure today and the House to pass it by Friday, but as of late Wednesday it was unclear how Congress would proceed. To move on such a tight deadline, Congress would need unanimous consent, a dynamic that gives individual lawmakers extreme leverage to halt any bill.
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"The bill that they put forth will not get unanimous support in the House," Pelosi said in an interview Wednesday afternoon on NPR.
Republicans, meanwhile, didn't seem amenable to meeting Democrats' demands.
"I just don't think there's going to be support" among Republicans for what Democrats have asked for, Senate Majority Whip John Thune, R-S.D., said Wednesday in an interview with The Washington Post. On hospital and state and local government funding, there are "big concerns about doubling down on either of those areas without having any idea about what we've done so far," Thune said, whereas the small-business program has been deployed and it's clear the government needs to quickly replenish that fund.
After passing the $2 trillion coronavirus emergency spending law last month, the White House and congressional leaders are still trying to contain economic fallout caused by the pandemic.
The 400,000 small business loans approved in the past week would represent a small portion of the 30 million small businesses in the United States, and Mnuchin suggested that more than one-quarter of the program's funding had already been committed.
Rushing legislation through Congress is extremely difficult, but congressional leaders appeared to hold out hope that a resolution was possible. On a conference call with House Democrats on Wednesday, Pelosi and Majority Leader Steny Hoyer, D-Md., suggested a deal could be reached by Friday.
Meanwhile, though, Senate Majority Leader Mitch McConnell, R-Ky., is moving forward to bring the $250 billion small-business increase to the floor today without Democrats' priorities included. An objection from any senator would block passage of the legislation.
"I hope none of my colleagues object to my request for these urgently-needed funds," McConnell said on Twitter late Wednesday. "There is no reason why this bipartisan job-saving program should be held hostage for other priorities."
Schumer and Pelosi said Wednesday that they would agree to the $250 billion for small businesses if half of it goes through community-based financial institutions serving farmers and small businesses and nonprofits owned by family, women, minority-group members and veterans. They also sought "improvements to ensure all eligible small businesses can access this critical funding and are not turned away by banks."
"We cannot solidify the inequality to access to capital that exists in our economy at a time when we are addressing the coronavirus crisis," Pelosi said.
Their list of demands also includes $100 billion for hospitals, community health centers and other health systems, to increase testing and needed protective gear and equipment; $150 billion more for state and local governments; and a 15% increase in food-stamp benefits. The federal government spent $55.6 billion on these nutrition assistance benefits last year. The sums Democrats are seeking for hospitals and cities and states are similar to how much they got in the $2 trillion rescue meassure, which would therefore double the overall funding commitment in those areas.
Mnuchin also spoke by phone Wednesday to Schumer, who told the secretary about Democrats' "very reasonable and needed" proposal, said Schumer's spokesman, Justin Goodman.
Republicans swiftly countered that Democrats were blocking fast action on the small-business aid.
Many of the Democratic requests revisited behind-the-scenes battles from the round of talks that produced the resuce measure two weeks ago.
"Senate Democrats should drop their shameful threat to block this funding immediately," said Sen. John Cornyn, R-Texas, a member of GOP leadership.
In an interview Wednesday morning on CNBC, Mnuchin did not address the Democrats' new demands but renewed his call for Congress to approve the small business spending increase this week.
"I want to assure all small businesses out there we will not run out of money," Mnuchin said. "The president has asked us to go back to Congress, we hope they pass this tomorrow and Friday, and we want to assure everybody if you don't get a loan this week you'll get a loan next week or the following week. The money will be there."
Mnuchin said 3,500 lending institutions were set up to issue loans. A number of small businesses have complained that the application process is confusing and difficult to navigate.
The Treasury Department has continued to try to update it, releasing new guidance on Wednesday.
Under the program, companies with fewer than 500 employees are eligible for loans of up to $10 million. Business owners will not have to pay the loans back if they meet certain requirements, including using 75% of the money to retain or rehire employees. Businesses can receive a $10,000 loan advance that does not have to be repaid, the Small Business Administration has said.
Pelosi and Schumer said the package of increased spending for small businesses, hospitals, cities and states and food stamp recipients should be followed by another major rescue bill building on the $2 trillion law.
That law also included major increases for unemployment insurance, as well as money to send cash payments of $1,200 to many Americans, and a $500 billion fund for companies, states, and cities.
Information for this article was contributed by Erica Werner, Mike DeBonis, Seung Min Kim, Renae Merle and Aaron Gregg of The Washington Post; and by Lisa Mascaro of The Associated Press.
A Section on 04/09/2020