Two Republican holdouts are threatening to prevent speedy passage of a bill that would modify a popular coronavirus loan program for small businesses over the temporary initiative’s end date.
Senate Small Business and Entrepreneurship Chairman Marco Rubio, R-Fla., said GOP Sens. Mike Lee of Utah and Ron Johnson of Wisconsin are holding up the bill because they want the Paycheck Protection Program to expire in August rather than December.
By preventing quick passage via unanimous consent, Lee and Johnson would force Majority Leader Mitch McConnell to spend valuable floor time on the measure, something he traditionally is loath to do.
Conn Carroll, Lee’s spokesman, confirmed his position: “Sen. Lee does believe that PPP was intended to be a short-term solution and that loan applications should be limited to Aug. 15.”
Johnson didn’t respond to a request for comment. But in an op-ed in The Wall Street Journal over the weekend, he said he wanted to make additional changes to the program, like requiring companies to demonstrate they need the funds. He also said the program wasn’t meant to last forever. “The program was designed to help small businesses bridge short-term shutdowns,” he wrote.
McConnell on Monday said he wants to take up the bill that passed the House last week “soon” and placed it on the Senate calendar.
The measure would modify a handful of the program’s provisions, which offer companies forgivable loans that act like grants as long as the money is used mostly to pay employees.
The House-passed legislation would extend from eight weeks to 24 weeks the time in which the borrowing companies must spend the loans in order to have them forgiven. It would also push the program’s current June 30 end date to the end of the year, in recognition of the lengthier-than-expected shutdown of nonessential commercial activities.
The Senate impasse comes as the first large chunk of small businesses to receive the loans are running up to the eight-week period. According to a survey released Tuesday by the National Federation of Independent Businesses, 23 percent of PPP borrowers will hit their eight-week deadline next week, and another 19 percent will do so the week after that. Seven percent of the borrowers have already passed the eight-week window.
An NFIB survey in May found that 54 percent of PPP borrowers expected to have all their loans forgiven and another 27 percent expected at least 75 percent to be.
Rubio said ending the program in August was “not an unreasonable request” but making that change would require sending the bill back to the House, which would delay enactment.
The House is scheduled to remain away from Washington through most of June, although Majority Leader Steny H. Hoyer, D-Md., has said the chamber would reconvene with three days’ notice to consider legislation related to the pandemic or the police brutality protests now roiling the nation.
FiscalNote, parent company of CQ Roll Call, has received a loan under the Paycheck Protection Program.
Rubio said he was more concerned about another provision in the bill intended to change a Small Business Administration rule requiring businesses to spend 75 percent of their funds on payroll to 60 percent.
That section, which says in part that “To receive loan forgiveness under this section, an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs,” could be interpreted as creating a hard threshold for debt forgiveness on the entire loan, Rubio said, rather than permitting qualifying debts to be forgiven and leaving the rest to be repaid.
The Senate tried to rush its own set of modifications to the program through unanimous consent just before its weeklong Memorial Day recess, but unknown senators blocked the effort.
The latest NFIB survey found broad support for the program, with 67 percent of borrowers saying it was “very helpful” in supporting their business and another 25 percent saying the loans were moderately or somewhat helpful.
Two percent of borrowers, however, said the program didn’t help at all. Perhaps coincidentally, a team of economists in May estimated that around 2 percent of small businesses, or 100,000, had closed up shop permanently because of the coronavirus.
Bridget Bowman contributed to this report.