Investment

Congressional negotiations over emergency relief funds stall as lawmakers hear from voters

The Capitol Hill standoff over additional emergency relief funds shows no sign of easing, with both sides digging into their positions further.

But that doesn’t mean lawmakers on both sides, in both chambers, aren’t busy. The implementation of the $ 2.2 trillion emergency economic bailout law – what’s right, what’s wrong, what needs to be fixed – has become the dominant issue in the lives of lawmakers scattered around the world. across the country.

“From 7 a.m. to 10 p.m. every day, every day, all I do is try to hear concerns, resolve issues, sign letters, call agencies, call back my small business owners or local groups, ”said a House Republican. CNN. “It’s work right now.”

At the end of the line : Lawmakers are pushing for these programs to probably work more than anyone else in the system right now. They wrote them, they voted for them, they own them. But more importantly, their days are inundated with calls from voters asking for answers or raising concerns, according to more than a dozen people polled by CNN in recent weeks.

Planning Note

House Majority Leader Steny Hoyer, a Democrat from Maryland, informed members that the House would not return until May 4, barring an emergency. Expect the Senate to make a similar announcement as early as Tuesday, collaborators told CNN. The caveat here is that there is an emergency going on, obviously. Leaders hope to resolve any immediate funding issues by unanimous consent, but as is currently being demonstrated, it is not always easy.

What matters is this: Lreaders don’t want their members to return to Washington in April. If they’re outspoken, they don’t want their members to come back until the country starts to open up. Members don’t want to come back either. It remains to be seen whether the economic situation allows it.

Impasse du Capitole

Chances of a breakthrough on the stalled congressional effort to approve more emergency funding for the coronavirus response have, for the time being, dissipated.

Democrats have firmly maintained that any additional funds for small businesses must be accompanied by additional funds for hospitals and states, as well as conditions on how that funding for small businesses can be used. Most of the time, however, they want negotiations on this interim package – and they thought they could get them through Treasury Secretary Steven Mnuchin.

Mnuchin has become the go-to for President Nancy Pelosi and Democratic leader Chuck Schumer, making deals with both. The two have said in recent days that Mnuchin appeared to lend itself to bipartisan talks – something that Senate Majority Leader Mitch McConnell and Republican House Leader Kevin McCarthy rejected out of hand.

Mnuchin made it clear at the White House press conference on Monday that he is firmly on the side of McConnell and McCarthy (this may seem obvious, but several GOP aides were rightfully uncertain of where Mnuchin was on this matter). The president joined him in this position.

So where does that leave things? Not clear. Republicans aren’t moving anytime soon. Democrats neither. Something must give.

The Small Business Administration Calendar

The Small Business Administration has told lawmakers the emergency small business loan program will run out of cash by the end of the week, sources told CNN.

The next date that matters: The Senate meets for its next pro forma session on Thursday, April 16 at 3 p.m. ET. There probably has to be a breakthrough before this point given the current speed with which the Small Business Administration loan program at the heart of the dispute is burning cash at this time.

Just noting: Mnuchin is everywhere, doing everything at this point. He talks to leaders on both sides about new emergency aid funds, he appears at White House press conferences, he negotiates the stress-filled airline bailout, he announces the first installment of direct payments, he works with the Federal Reserve to finalize the troubled large business loan facility, he is working with lenders and SBA officials to clean up the paycheck protection program, he is on the phone regularly, sources told CNN, with industry groups across the spectrum trying to listen to concerns or provide more details on the programs are in negotiations.

Assistant Treasury Secretary Justin Muzinich has become Mnuchin’s point of contact to work with the Federal Reserve on rolling out its loan programs and negotiations with airlines, sources say, and obviously became Mnuchin’s point of contact on the overall implementation of the $ 2.2 trillion emergency. Law on Economic Relief. But Mnuchin is really everywhere, apparently doing everything right now. And that’s a lot.

Unemployment insurance

Unemployment insurance funds have become one of the places hardest hit by the coronavirus. The rise in claims, coupled with the delay of more federal dollars in landing in the states, has created a bottleneck that has forced lawmakers to scramble to try and help people get back to their districts.

In Virginia, first-year Democratic Rep. Abigail Spanberger told CNN the state has increased its workforce by 20%, but phone lines are still blocked, wait times to speak to a real person are long, and even if someone completes the application process, they don’t receive the confirmation email that they would usually learn that their application is being processed.

“I regularly make calls with the delegation,” Spanberger said, noting that the state is “doing everything” it can, but the volume is overwhelming right now.

The Small Business Emergency Loan Program

Lawmakers currently have an eye on three issues with the Small Business Administration‘s paycheck protection program. They all recognize that these are unintended consequences of launching a $ 350 billion program in one week. As we have noted several times, none of these lawmakers believed the solution was to get the program back to working order before launching it.

“The CARES law was not perfect,” Democratic Representative Jason Crow of Colorado told CNN on Monday. “We adopted it quickly because we had to.”

Lawmakers continue to fear that banks will give preferential treatment to existing customers.

In a letter Monday night, American Banker’s Association President and CEO Rob Nichols acknowledged this from the early days of the program and told Senators in a letter that to ensure banks serve everyone, they need relaxed “know your customer” regulations. bank secrecy law requirements and regulations. Nichols’ point of view is that they are committed to making loans to everyone, but “while the CARES Act calls for speed, other existing banking laws require banks to take the time to verify the loans. important borrower information “.

A group of lawmakers are trying to get the Treasury to issue new guidelines that small businesses don’t have to use 75% of the loan for payroll: In order to get the loan canceled, homeowners companies must keep their staff on the payroll and pay them the wages they earned before the coronavirus spread in the United States, but additional Treasury guidelines have pointed out that 75% of the loan must go to the payroll, which is what lawmakers say was not their intention. Some lawmakers, including a group of moderate Democrats in the House, are pushing to change these directions.

On fraud: There is no widespread evidence of fraud occurring at this point, but some lawmakers have acknowledged that they want to see more guarantees on who is actually eligible for a PPP loan. Under current law, a business owner must self-certify that the loan is necessary due to the coronavirus, but some, including Republican Senator Ron Johnson of Wisconsin, have already started pushing to ensure that there are stricter limits on who can get the loans. The fear is that a business that does not need the loan will go online ahead of those that desperately need it.

PPP numbers

Last night, the Small Business Administration approved more than a million claims for more than $ 240 billion. This doesn’t mean the money went out the small business door – it’s entirely up to the lender to close the loan and disburse it. But speaking to small business owners in recent days, money has started to flow into bank accounts at a significant volume, especially after the big banks clarified the questions on how to close loans.

Given the deployment issues, some of which are still very problematic, this underscores how urgent the need for this money was and the sheer volume of requests entering banks across the country. This volume of requests, at this point, was the biggest problem most participants faced in the process.

The-CNN-Wire

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