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Epidemics

Senate Passes $484 Billion Deal to Replenish Small-Business Loan Program and Fund Coronavirus Testing and Hospitals

Strategic Insights

— 2 min read

The Senate passed a $484 billion deal to replenish a small-business loan program, fund hospitals and coronavirus testing, and devote more money to a new program to support the livestock industry. The legislation, which increases funding for the Paycheck Protection Program by $310 billion, is expected to be approved by the House and signed into law by President Donald Trump. The move marks a significant step in the government's efforts to mitigate the economic impact of the pandemic, which has led to more than 22 million Americans filing for unemployment benefits and many businesses closing.

Key Takeaways:

  • The Senate passed a $484 billion deal to replenish the Paycheck Protection Program by $310 billion, boosting funding to $659 billion.
  • The legislation also increases funding for a separate small-business emergency grant and loan program by $60 billion, and directs $75 billion to hospitals and $25 billion to a new coronavirus testing program.
  • The White House said the small-business initiative ran out of money last week amid overwhelming demand, and Treasury Secretary Steven Mnuchin said larger businesses would be blocked from using the program.
  • Senate Minority Leader Chuck Schumer said the new legislation is an "interim measure" and that Congress must quickly begin work on another bill that will match the size and scope of the $2 trillion Cares Act.
  • Senate Majority Leader Mitch McConnell disagreed, saying that the focus of the next package should be on getting the economy to start functioning again.
  • The Paycheck Protection Program allows companies with fewer than 500 employees to obtain loans from banks to mostly cover payroll costs, and if they retain employees and meet other requirements, the loans will be forgiven, paid off by taxpayers.
  • The deal includes provisions to require participation by lending institutions serving minority or under-served areas, and an additional $11 billion is included for administrative costs.
  • The legislation includes another $60 billion in emergency loans and grants for a separate Small Business Administration program that is out of money, and allows agricultural companies to qualify for these funds.
  • Lawmakers have discussed what could be in the next package, including money for cities and states, infrastructure investments, and payroll tax cuts.

Statistics:

  • The Senate passed a $484 billion deal to replenish a small-business loan program and fund hospitals and coronavirus testing.
  • The Paycheck Protection Program will receive an additional $310 billion in funding, bringing its total to $659 billion.
  • The bill directs $75 billion to hospitals and $25 billion to a new coronavirus testing program.
  • The White House said the small-business initiative ran out of money last week amid overwhelming demand, and more than 1.6 million companies secured funding in the first round.
  • The number of Americans filing for unemployment benefits has exceeded 22 million.
  • The $25 billion for testing and contact tracing includes $11 billion for states, $1 billion for the Centers for Disease Control and Prevention, $1.8 billion for the National Institutes of Health, and $1 billion for the Biomedical Advanced Research and Development Authority.

Sources:

  • The Washington Post
  • Senate Minority Leader Chuck Schumer (D-N.Y.)
  • Senate Majority Leader Mitch McConnell (R-Ky.)
  • Treasury Secretary Steven Mnuchin
  • President Donald Trump

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