Financial news

Democrats set out demands for new coronavirus stimulus

By  | 

Via Financial Times

Top Democrats on Capitol Hill have set out a series of demands for small businesses, hospitals and state and local governments, as lawmakers get ready for a fresh round of negotiations on how to provide billions of dollars of stimulus to Americans struggling to cope with the coronavirus crisis.

On Wednesday Nancy Pelosi, the Democratic speaker of the House of Representatives, and Chuck Schumer, the Senate’s most senior Democrat, called for Congress to push through an additional $500bn in stimulus money — double the $250bn that the Trump administration requested to replenish a loan programme for small business.

Ms Pelosi and Mr Schumer agreed the interim funding request should include $250bn in additional funds for small businesses, although they called for half that to be channelled through smaller, community-based lenders.

They also asked for an extra $100bn for hospitals to buy personal protective equipment and expand testing capacity; $150bn more for state and local governments to fight the outbreak while dealing with a decline in revenue; and a 15 per cent increase in food stamp benefits for low-income Americans.

However, Ms Pelosi acknowledged they faced resistance from the administration on some of the measures — a signal that both sides could face another protracted round of negotiations.

In an interview with National Public Radio on Wednesday afternoon, Ms Pelosi indicated that the additional $150bn for state and local governments was a sticking point between the two sides.

“They don’t want to do that now — I don’t know why . . . But we do,” Ms Pelosi said.

On Wednesday Donald Trump said he wanted the additional funding to be passed as quickly as possible. “We do not have time for the partisan games, and we don’t want the obstruction or totally unrelated agendas,” the US president said at his daily press briefing.

READ ALSO  Global stocks and oil extend gains on economic recovery hopes

Democrats’ list of demands came a day after Steven Mnuchin, the US Treasury secretary, said he had spoken to Republican and Democratic congressional leaders about securing $250bn to fund loans for small businesses, on top of the $350bn already allocated in the $2.2tn economic relief package signed into law by Mr Trump last month.

The scheme allows small businesses to receive loans backed by the Small Business Administration and keep the money if they retain the bulk of their workforce. Since the programme launched on Friday last week, however, banks and the SBA have struggled to keep up with demand.

Bank of America and JPMorgan Chase have had requests for more than $40bn in loans, from a combined 620,000 small business customers. Wells Fargo has shut to new applicants after getting requests for more than $10bn as of Sunday evening. Banks are expecting another surge of demand later this week, when independent contractors and sole traders will also be eligible to apply for funding. 

Mitch McConnell, the Republican Senate majority leader, did not immediately respond to the Democrats’ demands on Wednesday.

However, Republicans on Capitol Hill and in the White House pushed back against Democratic requests, noting that the initial stimulus bill had already provided $100bn for hospitals and providers, and $150bn for states and localities, and arguing that the sole focus of the additional funding should be small business.

“Senate Democrats should drop their shameful threat to block this funding immediately. Our small businesses desperately need help — now,” said John Cornyn, the Republican senator from Texas.

READ ALSO  Scientists probe link between high altitude and low coronavirus cases

Mr McConnell had previously said on Tuesday that he wanted further funding to be approved by unanimous consent or voice vote — eliminating the need for senators to be in Washington — on Thursday.

Coronavirus business update

How is coronavirus taking its toll on markets, business, and our everyday lives and workplaces? Stay briefed with our coronavirus newsletter.

Sign up here

In an interview with CNBC television, Mr Mnuchin said he hoped the House and Senate would pass a bill for the supplemental small business funding by the end of the week. He added: “And we want to assure everybody — if you don’t get a loan this week, you’ll get a loan next week or the following week. The money will be there.” 

The $2.2tn stimulus package, also known as the Cares Act, was the third piece of legislation providing emergency funding to address the impact of the coronavirus crisis. Lawmakers are already talking about a fourth bill that would provide even more money to American businesses and families, beyond the interim funding that is being debated this week.

Ms Pelosi and Mr Schumer said on Wednesday that “phase 4” would “extend and expand the bipartisan Cares Act to meet the needs of the American people”.

“Cares 2 must provide transformational relief as the American people weather this assault on their lives and livelihoods,” they said. “The American people need to know that their government is there for them in their time of great need.”

Print Friendly, PDF & Email

Latest from finanz.dk