Senate Democrats are holding up funding for the Paycheck Protection Program, which has become so popular in keeping workers on small business payrolls that it is quickly running out of money. The program was established as part of the CARES Act, which was passed unanimously and included billions for hospitals and health care workers on the front lines.
Not only is it misleading for Democrats to claim that “smaller” banks are being denied access, they hardly expressed a concern about this when claiming credit for the program.
Senate Minority Leader Chuck Schumer bragged in a press release celebrating the passage of the Phase 3 bill that “he negotiated” the small business rescue plan:
Schumer, a longtime champion of small businesses across New York negotiated a small business rescue plan that allocates more than $375 billion to forgivable loans and grants to small businesses and non-profits so they can maintain their existing workforce and help pay other expenses during this crisis, like rent, a mortgage or utilities.
Speaker Pelosi similarly praised the bill in a floor speech, and made no mention of any shortcomings in terms of which banks got access to funding:
And for the first time, we have grants from the SBA and, thanks to Secretary Mnuchin – he is facilitating this by not just all of the loans going through the SBA, but going through banks with the SBA, which makes this all go much faster.
In an NPR interview, Speaker Pelosi said: “We are very proud of the program: the Paycheck Protection Program that is there.” Now, Speaker Pelosi said we need to “see the data” before replenishing funds.
Democrats’ new demands fail to account for the care taken by the Trump Administration to implement the program. Early reports about the program showed that Treasury was responsive to concerns that not enough major and community lenders would participate. As a result, Treasury rewrote guidance to help. Now, small business owners have said that the program “made bringing our employees back to work so that they could earn their paycheck again possible.”
Community banks who have been helping small businesses access these loans have made clear that demand is high. Wisconsin Bank & Trust has reported processing hundreds of applications.
Yellowstone Bank in Billings, Montana said they had 75 applications ready to submit the first day the program opened up. Mountain Mudd coffee company, who applied for a loan through Yellowstone, said the paperwork “was fewer than six pages.”
“This thing went from nothing to, in 10 days, trying to get out $350 billion dollars,” said Moody Bank CEO Vic Pierson in Galveston, Texas. “It’s pretty amazing, if you think about it.”
Community banks and small business owners are hoping that Congress will “allocate more funds for the program.” Unfortunately, Democrats are deciding to delay help they once were “proud” of.
Sen. Ben Cardin (D-MD) called Republicans’ request for more funds to keep Main Street workers paid a “political stunt.” But he previously cited his work with Senate Republicans “to make sure we had a robust provision to preserve the growth engine and innovation engine of our economy, and that is small businesses.” He had even cited with great urgency the need to get “funds into the hands of American small business owners as quickly as possible so they can keep employees on payroll and avoid financial ruin while we work to combat COVID-19.”
Sen. Chris Van Hollen (D-MD) said during negotiations over phase 3 that “workers, families, and small and mid-size businesses are desperate for immediate economic relief, and we must act now.” He praised passage as providing “desperately needed help to small and mid-sized businesses struggling to stay afloat.” But now, he argues that asking for more money for this program was “designed to fail.”
Main Street businesses have been clear: this program is keeping workers paid, and it needs more money.
“The is not the time to play partisan games,” said Ways and Means Republican Leader Kevin Brady (R-TX). “Lives and livelihoods of Americans are at stake.”
“We need more funding now,” said. Rep. Brady. “Politics can wait, small businesses can’t.”