The Small Business Administration's rescue loan program has exhausted all of its initial $349 billion pool of funds. Congress will now be tasked with replenishing the Paycheck Protection Program to provide much-needed capital to small businesses struggling during the coronavirus pandemic.
The historic $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, otherwise known as the CARES Act, included a loan program called the Paycheck Protection Program. The $349 billion fund would provide small businesses with forgivable loans so that they could retain employees during the COVID-19 shutdown that has stifled the economy.
The PPP, which was announced on March 31 and implemented that week, was intended for small businesses to access through June 30, 2020. However, the entire $349 billion fund ran out on Thursday, and the Small Business Administration is currently not accepting any applications.
"By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations," the U.S. Small Business Administration said.
The SBA also revealed that the $10 billion made available for Economic Injury Disaster Loans had been entirely drained.
The SBA said that it had "processed more than 14 years' worth of loans in less than 14 days."
"We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks," Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza said in a joint statement on Wednesday night.
"The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible," the statement read. "We want every eligible small business to participate and get the resources they need."
Republicans and Democrats will need to come together to refill the economic relief program, but both parties have been engaged in a battle of wills.
Senate Majority Leader Mitch McConnell (R-Ky.) tried to pass $250 billion in more funding last week, but it was blocked by Democrats, who want a package that also includes an additional $100 billion for hospitals, $150 billion for state and local governments, and increased food assistance programs. McConnell blocked the Democratic package.
"It has been stunning to watch our Democratic colleagues treat emergency funding for Americans' paychecks like a Republican priority which they need to be goaded into supporting," McConnell and House Minority Leader Kevin McCarthy (R-CA) wrote in a statement released Wednesday evening.
"Funding a bipartisan program should not be a partisan issue," the statement read. "The notion that crucial help for working people is not appealing enough to Democrats without other additions sends a strange message about their priorities."
"Millions more Americans are losing their jobs every week. Absolutely crushing," McConnell wrote on Twitter. "Republicans have spent a week trying to fund the bipartisan Paycheck Protection Program so more Americans can keep their jobs. Democrats are blocking the money and making the program run dry."
Millions more Americans are losing their jobs every week. Absolutely crushing. Republicans have spent a week tryiâ�¦ https://t.co/KEIgBcvbLf— Leader McConnell (@Leader McConnell)1587045334.0
Republicans tried to pass more money for Americansâ�� paychecks last week. Democrats blocked it. Speaker Pelosi saidâ�¦ https://t.co/I2seNGlOBj— Leader McConnell (@Leader McConnell)1587049568.0
"We have real problems facing this country, and it's time for the Republicans to quit the political posturing by proposing bills they know will not pass either chamber and get serious and work with us towards a solution," Schumer and Pelosi said in a joint statement.
"State and local governments are desperate for resources. Hospitals, desperate for resources. That's what we're saying we need," Pelosi said on CNN Wednesday afternoon. "Small businesses, state and local governments and hospitals, that is what the Senate [Democrats] put on the floor last week. We're very proud of them for doing that. And that is something that needs to be done."
Congress extended its recess until May 4 due to the dangers of coronavirus. The Senate is scheduled for a 3 p.m. pro forma session on Thursday. The House is expected to be in on Friday.
There is some optimism that Mnuchin and Schumer could reach a deal soon.
Sen. Doug Jones (D-Ala.) told reporters on a conference call Tuesday, "I understand that a fair amount of progress has been made," referencing negotiations between Mnuchin and Schumer, which happened Wednesday and will continue into Thursday.