Little progress was made over the weekend in what's shaping up to be Phase 3.5 of stimulus legislation to respond to the coronavirus emergency. (Phase 3.5 is a stopgap small bill that would provide a bridge until the next really big bill gets done.) The White House and Sen. Mitch McConnell have been trying to force Democrats to swallow another $250 billion on top of the $350 billion lending program for small businesses that was passed in CARES, the Phase 3 $2 trillion bill. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer are resisting— they’re negotiating for other essential aid to be included, for the public health response, to get more food assistance to the millions who are now food insecure, for more money for rapid testing for novel coronavirus, and for protective gear for front-line workers.
"Small businesses, hospitals, frontline workers and state and local governments across the country are struggling to keep up with this national crisis," Pelosi and Schumer said in a statement Monday morning. "They need more help from the federal government and they need it fast—our nurses, doctors and health care workers need it as much as anyone else." They pointed out that while "the Trump Administration struggles to figure out how to distribute the funds provided for in the CARES Act, it’s clear that those appropriated amounts will not be enough to cover the tremendous need."
A key issue with the small business lending program at this moment is less that it doesn't have enough funds than it is about the administration's bungling of the rollout of the program. "Further changes must also be made to the SBA's assistance initiative, as many eligible small businesses continue to be excluded from the Paycheck Protection Program by big banks with significant lending capacity," the Democratic leaders added. They want to make sure that community banks that will lend within their communities are included. "Funding for Covid-19 SBA disaster loans and grants must be significantly increased to satisfy the hundreds of billions in oversubscribed demand."
For this interim bill, they are demanding another $150 billion for cities and states, $100 billion for hospitals, and an additional 15% increase in benefits for food stamp recipients. "We have real problems facing this country, and it’s time for the Republicans to quit the political posturing by proposing bills they know will not pass either chamber and get serious and work with us towards a solution," they wrote.
To reinforce their demand, the National Governors Association released a statement Saturday saying that "Congress must appropriate an additional $500 billion specifically for all states and territories to meet the states’ budgetary shortfalls that have resulted from this unprecedented public health crisis." Maryland Gov. Larry Hogan, a Republican, and New York's Democratic Gov. Andrew Cuomo released the statement together, writing: "In the absence of unrestricted fiscal support of at least $500 billion from the Federal government, the states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery, and—in turn—our collective effort to get people back to work."
Both Schumer and Pelosi have been in discussions with Treasury Secretary Steven Mnuchin on getting this interim bill across the line. Since Thursday—when he tried to force the bill through the Senate—McConnell hasn't provided an immediate response. It's unclear how this Congress will proceed right now since both chambers are officially in recess for another week and it would need to be advanced by unanimous consent, in which all members agreed that they don't want to come back to Washington for a recorded vote.
