WASHINGTON—A small-business loan program designed to back workers’ paychecks has exhausted most of its funding, ramping up pressure on congressional Democrats and Republicans aligned with the White House to reach a deal on the next round of economic aid amid the coronavirus crisis.
Negotiations between Congress and the White House over replenishing the small-business program resumed Wednesday.
The Paycheck Protection Program was on track to exhaust most of its initial allocation of $350 billion in the early morning hours Thursday, with the Small Business Administration saying it had approved more than 1.4 million loans valued at $315 billion as of late Wednesday and loans continuing to be processed.
The fund needs about $10 billion to cover processing and fees, Senate Small Business Committee Chairman Marco Rubio (R., Fla.) said on Twitter.
“The fund being exhausted clearly puts pressure on Congress to act and come to a reasonable conclusion,” said Rep. Patrick McHenry of North Carolina, the top Republican on the House Financial Services Committee. “Every day that passes that we don’t fund this program, more pain is felt by small-business folks and their employees.”
Both Democrats and Republicans want to add $250 billion to the small-business aid program, but have been sparring for days over whether to add restrictions to the funds. Democrats want to expand access to the loans as well as include more money for hospitals, food assistance and state and local governments. Republicans, meanwhile, said they want to keep the bill focused on increasing small-business aid and defer other funding debates until the next, broader legislation is crafted.
Senate Minority Leader Chuck Schumer (D., N.Y.) told reporters he had spoken with Treasury Secretary Steven Mnuchin on Wednesday morning. Aides to Mr. Schumer and House Speaker Nancy Pelosi (D., Calif.) spoke by conference call with Mr. Mnuchin and Treasury Department staff later Wednesday and agreed to continue their discussions Thursday, according to senior Democratic aides.
“We see no reason why we can’t come to an agreement,” Mr. Schumer said. “We Democrats believe we need more money for small businesses, but we need it to go to the people who are underbanked and underserved.”
Both parties have accused one another of blocking an infusion of aid into the PPP fund. In comments late Wednesday, President Trump reiterated that he wants Congress to focus on passing the $250 billion in funding before moving on to other spending.
The discussions were the first signs of progress this week, but it remains uncertain whether congressional leaders and President Trump will be able to reach an agreement by week’s end. Both chambers are scheduled to hold brief sessions later this week.
“I am convinced we could sign off as early as tomorrow on an agreement if we just sit down and work,” said Sen. Ben Cardin (D., Md.).
Mr. Cardin last week introduced a measure that would provide an additional $65 billion for separate disaster loans and grants, dubbed the Economic Injury Disaster Loan program, in addition to increased funding for PPP. The EIDL program was intended to quickly deliver to applicants grants of up to $10,000, but overwhelming demand has caused delays.
Senate Majority Leader Mitch McConnell (R., Ky.) has said Democrats should wait to fund other programs as part of the next relief package, while boosting the PPP small-business aid he said is needed more urgently.
“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,” Mr. McConnell said in a joint statement with House Minority Leader Kevin McCarthy (R., Calif.) on Wednesday night. “Funding a bipartisan program should not be a partisan issue.”
Some banks, anticipating that PPP funding will be exhausted, have already stopped taking applications from small businesses.
Arvest Bank, a regional lender based in Arkansas that has gotten more than $1 billion approved by the SBA for more than 7,000 borrowers, said it halted new applications on Tuesday.
“We’re at a point now where we have so many [applications], we’re concerned that the money’s going to run out,” Arvest Chief Executive Kevin Sabin said. “We’re really hopeful that…they can get another $250 billion allocated before this runs out, and then we’ll open it wide open again.”
San Antonio-based Frost Bank, which has gotten $2.8 billion in loans approved through PPP, is still accepting new applications under the program but is watching to see whether Congress approves more funding. As of Monday, Texas led the nation in PPP funding approved, according to SBA data.
As talks to replenish the program continued, several House lawmakers are readying a resolution calling on party leaders to come up with a plan soon for remote voting and hearings, so that Congress can continue operating during the coronavirus pandemic. Congress isn’t scheduled to return formally to Washington until May 4. With no way of conducting business remotely, all bills must pass by unanimous consent, limiting congressional action.
“There’s going to be increasing pressure for remote debate and voting because, A, we’re not all going to agree and, B, we’re feeling we have a responsibility here,” said Rep. Josh Gottheimer (D., N.J.), one of the seven lawmakers leading the resolution that asks Mrs. Pelosi and Mr. McCarthy to come up with a plan for remote proceedings.
Congressional leaders have resisted pressure from lawmakers to enact remote procedures for voting or hearings. Mr. Hoyer said on Wednesday that it was something leadership was looking into as the pandemic continues.
“Neither the speaker, nor I, nor Senator McConnell or Congressman McCarthy believes that we ought to have any kind of regular practice of voting remotely,” he told reporters. “But in an emergency situation where it’s impossible to do it that way, we ought to have an alternative.”
In the Senate, Sen. Rob Portman (R., Ohio) is pushing for his chamber to also explore remote proceedings. His bipartisan bill would allow the Senate to vote remotely for 30-day increments.
“It’s needed as a tool when we find ourselves in an emergency,” he said in an interview. “It should be something that congress turns to only in extreme situations, but it ought to be available.”
—Natalie Andrews and Paul Kiernan contributed to this article.
Corrections & Amplifications
Frost Bank is based in San Antonio. An earlier version of this story incorrectly said it was based in Houston. (April 15, 2020)
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