WASHINGTON — Rushing to shore up a $2 trillion economic stimulus effort that is already under strain, Congress could move as early as this week to approve another $250 billion in aid for small businesses, after the Trump administration asked for additional funds to support an overwhelming demand for help.
The request for a quick infusion of more money, which Republican and Democratic leaders acknowledged was necessary, signaled a recognition among lawmakers and the administration that the historic economic stabilization package enacted only two weeks ago to help businesses survive the economic damage of the coronavirus pandemic did not go nearly far enough.
It came as Congress was already debating the contours of yet another sweeping relief measure to respond to the economic toll of the crisis. But before lawmakers can debate or act on that, they are now weighing urgent action this week to help businesses eager for immediate government help — and the employees who depend on them.
Steven Mnuchin, the Treasury secretary, reached out to top Democrats and Republicans on Tuesday to request the additional funds, which would go to a new program to help small businesses secure loans from banks. The program has had an exceedingly rocky start, but the rush to replenish it reflected the desperation among businesses to take advantage of it.
plagued with problems, with lenders and potential borrowers alike encountering difficulties navigating it. It has stretched the limits of the Small Business Administration, which typically backs $30 billion of small-business loans in a boom year — about the same amount banks are now seeking for their customers in a day. Small-business owners, bankers and other participants have said that very little of the billions disbursed have actually reached companies in need of the money, which are desperate for it.
Under the terms of the program, businesses that maintain their staffing levels and use the bulk of the money to cover payroll costs will not need to repay their loans.
Many economists warned lawmakers — before, during and after the debate on the $2 trillion law — that small businesses would need significantly more help from the government in the face of an outbreak that has brought entire sectors of the economy, including dining and hospitality, to a halt.
Any delay in availability of funds for business owners, or even the perception that there might not be enough money to go around, could cripple companies and potentially throw workers into unemployment. The typical small business cannot survive less than a month without incoming revenue, according to research by the JPMorgan Chase Institute.
“It is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry,” Mr. McConnell said. “That cannot happen. Nearly 10 million Americans filed for unemployment in just the last two weeks. This is already a record-shattering tragedy, and every day counts.”
With lawmakers scheduled to remain in their districts and home states until at least April 20, approval of such funding would require unanimous agreement between both parties in both chambers.
we have days, NOT weeks to address this.”
“It is less money than we would end up spending if we go into a deep recession or depression and less money than our social services would end up spending,” said Senator Susan Collins, Republican of Maine and one of the architects of the program, adding that she had been hearing a “deep sense of relief” from business owners and workers.
Economists who pushed for the creation of the program in the stimulus package that passed two weeks ago have consistently warned that small businesses would need three times as much money as Congress initially authorized — or more — to avoid a wave of bankruptcies.
“Demand for the program could easily exceed $1 trillion,” said Michael R. Strain, an economist at the American Enterprise Institute who was an early supporter of direct aid to small firms. “The more money small businesses request for payroll in the form of grants, the less the government has to spend at all levels on unemployment insurance.”