Funding for the Paycheck Protection Program (PPP), a popular small-business lending program, will run out on Thursday and Democrats are trying to use maximum leverage on Senate Majority Leader Mitch McConnell to get what they want in the bill.
In addition to trying to pressure McConnell into using the deadline for funding to run out, Democrats are negotiating directly with Treasury Secretary Steven Mnuchin and the president, cutting McConnell out of the loop. Democrats are banking on Trump’s eagerness to keep the money pipeline open for small businesses on the edge of the abyss because of the coronavirus lockdown.
Democrats want to load up the $250 billion loan package with aid for state governments and more money for hospitals. McConnell wants a “clean bill” and has told Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi that those issues can be taken up in a separate bill.
But Democrats fear that once the lockdown ends, the pressure on Congress will ease and their wish list will fall by the wayside.
While congressional Republican staff have reached out to Democrats, Schumer and Pelosi have preferred to work with Mnuchin, viewing him as a more sympathetic negotiator.
Sen. Ben Cardin (Md.), the top-ranking Democrat on the Small Business Committee, said Schumer and Mnuchin have “a pretty good relationship.”
Mnuchin also has a good relationship with the president and it’s doubtful Trump wants to kneecap McConnell just to satisfy Democratic demands.
Senate Republican aides expect a deal to emerge this week even though McConnell hasn’t signed off on anything and passing legislation during a pro forma session scheduled for Thursday would require consent from every senator. That is a very tall order.
“There’s already the uncertainty about this program and it’s discouraging people from applying. The closer we let it go to banks not accepting applications the worse it gets. There’s a sense of urgency. It’s just a matter of what’s going to be demanded to get it across the finish line,” said a GOP aide.
McConnell’s desire for a “clean” bill is more than just window dressing. He knows that there are several Republican and Democratic senators running for re-election who would love to use the bill to bring more of the bacon back to the home folks.
McConnell said last week that he would favor providing more money for hospitals and health care providers “down the line.” But talk of adding hospital funding to the $251 billion for the Small Business Administration will set off a battle among senators who want to tweak the formula and get special benefits for their home states.
Democrats are likely to go to the limit to get what they want, believing that Trump will cave in the end. That sounds like dubious reasoning, knowing Trump, but McConnell will be feeling the pressure too. In the end, something will get done and Democrats will get something for all their maneuvering.
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