Congress passed a $484 billion bill on Friday to provide additional funding for the Paycheck Protection Program, among other things. Overall, the bill includes $380 billion for small businesses, $75 billion for hospitals and $25 billion for disease testing.
The Paycheck Protection Program and Health Care Enhancement Act is the fourth piece of federal legislation Congress has passed to provide relief for Americans. The bill will add another $321 billion to the Paycheck Protection Program, which ran out of money late last week. Specifically, it also provides $1 billion for the CDC, $1.8 billion for NIH, $22 million for the FDA, $825 million for community health centers and rural health clinics, and up to $1 billion to cover testing costs for the uninsured. Under the $25 billion for COVID-19 testing is $11 billion for states, localities, territories and tribes to develop, purchase, administer, process and analyze COVID-19 tests, scale up laboratory capacity, trace contacts and support employer testing. The bill designates an additional $50 billion for Economic Injury Disaster Loans and an additional $10 billion for the Economic Injury Disaster Loans advance grants.
Negotiations were tense leading up to the passage of the near-half-trillion-dollar package. Senate Republicans initially wanted to rush an additional $250 billion to the PPP before Democrats blocked the measure, saying that any additional funding should consider other sectors that need it. Earlier this week, the parties’ leadership announced that they reached a bipartisan agreement, though it does not include the majority of what Democrats demanded. Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer pushed for additional funding for states and cities as well as further funding for SNAP, among other provisions. “For anyone who thinks this is the last train out of the station, that is not close to the case,” Schumer told the media, making it clear that this is not the last coronavirus-relief package.
The PPP, which makes 100% guaranteed federal loans available to small businesses in an effort to help keep American workers employed and assists employers in paying health insurance premiums, hit its $349 billion initial allotment this week as the SBA announced over 1.6 million applications were approved. There has been some controversy around the federal government’s rollout of PPP loans. Many small businesses reported difficulties going through big banks like JPMorgan and Bank of America, while several large restaurant chains that may not have needed these loans took out millions in loans. Additionally, 41 members of Congress signed a letter
to Fed Chairman Jerome Powell and Treasury Secretary Steve Mnuchin complaining that the PPP’s rules are unfair to startups. The calculation utilized to determine who qualifies for the loans uses profitability, disqualifying many early startup businesses because they invested in growth prior to the pandemic.