Parties race to break deadlock over funds for desperate businesses
Weekend talks are underway to restock the Paycheck Protection Program, but money for state and local governments remains a sticking point.
Democratic leaders and the Trump administration are racing to cut a deal on the next tranche of coronavirus aid this weekend after a key small business relief fund expired.
Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer have been negotiating with Treasury Secretary Steven Mnuchin for several days to end a partisan standoff. Though a deal isn't done, multiple sources in both parties said Saturday that notable progress has been made over the past day and a final agreement could be announced this weekend.
Still, negotiations remain tenuous and could fall apart if either side digs in.
The terms of a tentative deal center on $250 billion or more for the Paycheck Protection Program, which exhausted its $349 billion coffers on Thursday, as well as roughly $75 billion for hospitals. Democrats want some of the new money for small businesses set aside for communities with few banking institutions.
A key sticking point remains, however: Money for state and local governments struggling to deal with the economic fallout from the virus’ lockdowns. On Friday night, Democrats proposed to Mnuchin providing the $250 billion on the table for the Paycheck Protection Program as well as more money for hospitals, plus $150 billion for state and localities.
But according to two Republicans following the talks, money for state and local governments is a red line for the GOP and would likely trigger opposition that would derail any agreement. Because Congress is on recess until May 4, any member can object to a deal. And conservative senators are likely to tank any agreement that delivers a large increase in funds for state and local governments, Republicans said.
Led by Senate Majority Leader Mitch McConnell (R-Ky.), Republicans tried to pass $250 billion in small business aid last week. But Democrats rejected that and demanded spending for hospitals and states as well as changes to the small business program. Schumer and Pelosi then sought to negotiate with Mnuchin, who has become a key conduit to the GOP for Democrats during the coronavirus pandemic.
Amid the stalemate, the program that helps keeps businesses afloat by funding payroll and expenses expired, leading to a new round of dealmaking. The Senate will hold a pro forma session on Monday that would offer the first opportunity for Congress to approve any deal clinched over the weekend. The House holds a pro forma on Tuesday.