President Donald Trump signed into law a $484 billion COVID-19 rescue bill Friday (April 24) that includes $310 billion in new money for the popular Small Business Association's (SBA) Paycheck Protection Program (PPP), which exhausted its funding for forgivable loans to small businesses that keep workers on the payroll. Hi signature means the PPP program could open for business again within days, although the new money might not last long.
“I want to thank Congress for answering my call to pass this critical funding,” Trump said in the Oval Office. “Great for small businesses, great for the workers. Throughout this crisis, my administration has taken unprecedented actions to rush economic relief to our citizens.”
Separately, House Speaker Nancy Pelosi (D-Calif.) said the measure "took a giant step in loosening the hard grip of disparity of access to credit in our country."
The bill, which also includes $60 billion in loans and grants for the SBA’s disaster relief-fund resources, was overwhelmingly approved by the House on Thursday (April 23) as House members donned masks. The measure had passed the Senate earlier.
It’s the latest measure to boost the CARES Act that passed last month, but the new money can't come fast enough for small- and medium-sized businesses. PYMNTS recently surveyed more than 500 SMBs and many reported a "COVID-19 cash chasm" -- cash for just a matter of days or weeks even though they expect the crisis to last longer than that.
Beyond help for businesses, the new package includes $75 billion for hospitals and $25 billion for coronavirus testing. While the legislation totals nearly a half-trillion dollar, Democrats and Republicans called it an "interim" bill to replenish the $2 trillion CARES Act.
However, Republican Senate Majority Leader Mitch McConnell (R-Kentucky) has raised questions about the amount of bailout debt being added to the federal deficit. “Let's weigh this very carefully, because the future of our country in terms of the amount of debt we're adding up is a matter of genuine concern,” McConnell told reporters after the Senate passed the interim bill.
He also warned state and local governments not to expect more assistance. On Wednesday (April 22), the Kentucky Republican said on The Hugh Hewitt Show that he is "not ready to just send a blank check down to states and local governments to spend any way they choose to."
USA Today reported that McConnell would rather let state governments file for bankruptcy rather than "borrow money from future generations to send it down" amid the coronavirus pandemic. "I would certainly be in favor of allowing states to use the bankruptcy route," McConnell said. "It saves some cities. And there’s no good reason for it not to be available."