House approves changes to small business PPP loans

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US House Speaker Nancy Pelosi (D-CA) speaks at a weekly press conference on Capitol Hill in Washington, May 28, 2020.

Tom Brenner | Reuters

The House passed a bill Thursday to give small business owners more flexibility in how they spend money on a key coronavirus aid program.

The house approved the bill in an almost unanimous 417-1 vote. The Senate has presented a plan similar to the House bill, but has not yet passed it. Senators will not meet until next week.

One of the cornerstones of the $ 2 trillion pandemic bailout program adopted in March is the paycheck protection program, which includes standards on how businesses use their loans to make them. forgive. The measure adopted on Thursday would soften these rules.

The plan:

  • Reduce the share of aid money that small businesses must spend on the wage bill from 75% to 60% (PPP architects have sought to encourage businesses to keep workers busy)
  • Extend the window that companies must use funds from two to six months
  • Extend June 30 deadline to re-hire workers
  • Extend the time beneficiaries have to repay the loan
  • Allow companies that get their loan cancellation to defer payroll taxes

Democrats and Republicans have approved changes to the small business loan program as they struggle to find consensus on the next phase of relief from the economic devastation caused by the pandemic. Democrats want a large package to relieve state and local governments, send more direct payments to individuals, and extend an improved federal unemployment insurance benefit.

As the GOP questions the need to spend more taxpayer money on recovery efforts, it has pushed for liability protections for businesses and doctors as most of the country restarts trade. Democrats have criticized the possibility of a broad shield against prosecution.

Congress injected $ 350 billion into the small business loan program for the first time in March. After that money quickly dried up, legislators invested an additional $ 310 billion in the PPP – of which $ 60 billion is spent on small lenders.

After a chaotic deployment of the massive program, critics said it was not doing enough to help businesses that did not have an existing banking relationship.

For the second day in a row, the House used a remote proxy voting system temporarily implemented during the coronavirus crisis to keep legislators safe. Dozens of representatives voted on the proxy bill on Thursday.

The Republicans challenged the method in court, calling it unconstitutional.

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