A Showdown Over Coronavirus Aid

Plus: Trump vs. the Post Office

A Coronavirus Standoff in the Senate

With small businesses having applied for more than $200 billion worth of loans and grants from the federal government as of Monday morning, some worry that the immensely popular $350 billion Paycheck Protection Program will run dry by the end of the week, leaving smaller firms out in the cold.

Responding to a request from Treasury Secretary Steven Mnuchin, Republicans are seeking to add $250 billion to the program, which was established by the $2.2 trillion coronavirus relief package that passed in late March. The program provides loans and grants to small businesses to keep firms open and workers on payrolls. But Democrats last week blocked passage of the additional $250 billion for small businesses, saying they want changes in the program’s rules as well as additional relief funds for hospitals and state and local governments. Democrats insist on negotiating a new bill, resulting in a stalemate.

Following a brief pro forma session Monday, the Senate is not expected to meet again until Thursday.

Huge demand for help: The Paycheck Protection Program has approved 860,000 applications for $210 billion of loans through 4,500 lenders as of Monday, CNBC reported. Getting the money into the hands of small business and sole proprietors has been more difficult than the approval process, however, and many applicants are still waiting to receive their loans and grants.

One problem is confusion over the terms of the loans, with some bankers saying they are still waiting for clear guidelines from the government about loan guarantees and the conversion of some loans to grants. “We have mostly undisbursed loans at this time,” Tony Wilkinson of the National Association of Guaranteed Government Lenders told CNBC. “We still don’t have a program guide.”

Voting is tricky: Few lawmakers are in Washington, making it hard to pass legislation except by unanimous consent, a parliamentary maneuver that allows legislation to proceed without recording individual votes. Staunch libertarian Rep. Thomas Massie (R-KY) said Monday that he would not allow the House to vote on any funding legislation via unanimous consent and would call for a recorded vote, forcing lawmakers to return to Washington, just as he did with the first aid package three weeks ago.

"By calling them out on the Constitution and making them come to Washington, D.C. in order to pass a bill, they're finding it harder to pass this next bill, because they know they're all going to have to come to work," Massie said. “They know I will get in my car and drive there and make them vote on it. And my colleagues, a lot of them, frankly, are cowards.”

Finger pointing commences: Republicans blamed Democrats for slowing the additional aid and said they would not negotiate. "Republicans reject Democrats’ reckless threat to continue blocking job-saving funding unless we renegotiate unrelated programs which are not in similar peril. ... We will continue to seek a clean PPP funding increase. We hope our Democratic colleagues familiarize themselves with the facts and the data before the program runs dry," GOP lawmakers said in a joint statement.

In response, Democrats said a stand-alone bill has no chance of passing the House and demanded that Republicans start negotiations. “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," House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement.

How does it end? The two sides are currently locked in a high-stakes game of chicken, with no clear outcome in sight.

Govs. Cuomo and Hogan Say States Need $500 Billion More in Aid

New York Gov. Andrew Cuomo slammed the federal coronavirus response Sunday, again accusing Congress of failing to address looming budget shortfalls resulting from the pandemic and misallocating aid in a way that shortchanges his state, hit hardest by the pandemic.

Cuomo, a Democrat, and Maryland Gov. Larry Hogan, the Republican chair of the National Governors Association, on Saturday called on Congress to approve an additional $500 billion in direct aid to help states stabilize their budgets and avoid damaging cuts.

“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery, and — in turn — our collective effort to get people back to work,” they said in a joint statement.

At a press briefing on Sunday, Cuomo blasted the federal government’s approach to distributing the initial $30 billion in emergency grants provided under the Creates Act coronavirus relief legislation, saying the funding “became a game of political pork.”

The Department of Health and Human Services confirmed last week it would send money to doctors and hospitals based on their historical share of revenue from Medicare, not the number of coronavirus cases they have.

"You did an injustice to the places that actually had the need," Cuomo said. "Which, from an American taxpayer point of view, that's what you were trying to correct. You were trying to correct the devastation of the virus. Well then correct the devastation of the virus. Not everything has to be an opportunity for pork barrel."

Cuomo cited an analysis by Kaiser Health News that found that states such as Minnesota, Nebraska and Montana are getting more than $300,000 per reported Covid-19 case while New York would only get $12,000 per case.

Trump Threatened to Block Coronavirus Relief Bill if It Included Bailout for US Postal Service: Report

President Trump threatened to block the $2.2 trillion coronavirus relief package if Congress included emergency aid to the United States Postal Service, The Washington Post reported this weekend.

“We told them very clearly that the president was not going to sign the bill if [money for the Postal Service] was in it,” an unnamed Trump administration official told the Post. “I don’t know if we used the v-bomb [a veto threat], but the president was not going to sign it, and we told them that.”

Lawmakers reportedly had originally agreed to provide $13 billion to the Postal Service in the form of a direct grant that would not have to be repaid. But Treasury Secretary Steven Mnuchin blocked that idea, reportedly telling congressional negotiators, “You can have a loan, or you can have nothing at all.”

In the end, the legislation included a $10 billion loan from the Treasury Department to the postal service.

‘A critical juncture’: Plummeting volumes of first-class and marketing mail as a result of the pandemic have worsened the already shaky finances of the Postal Service, which employs more than 600,000 people. “We are at a critical juncture in the life of the Postal Service,” Postmaster General Megan Brennan said in a statement Friday. “At a time when America needs the Postal Service more than ever, the reason we are so needed is having a devastating effect on our business.”

In a video briefing to members of the House Oversight and Reform Committee last week, Brennan said that the Postal Service would run out of money this fiscal year without federal aid. Brennan said that the Postal Service expects to lose $13 billion in revenue this year as a result of the pandemic, and an additional $54 billion in losses over the next decade.

“The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist," Oversight and Reform Committee Chairwoman Carolyn Maloney (D-NY) said in a statement.

Brennan asked for $25 billion in emergency funding to offset lost revenue due to the virus and $25 billion for modernization projects, plus a $25 billion Treasury loan. But the Trump administration has reportedly made it clear that a bailout for the Postal Service would scuttle efforts to reach a broader stimulus deal.

The Post’s Jacob Bogage reported:

“While the Trump Administration and Mnuchin pushed through private-sector bailouts in the Cares Act — $350 billion to the Small Business Administration loan program, $29 billion to passenger airlines and air cargo carriers, and economic incentives for the construction, energy and life sciences industries, among others — Mnuchin has signaled any postal relief funds in a ‘Phase IV’ stimulus package under negotiation would amount to a poison pill.”

Read more at The Washigton Post.

For the First Time Since World War II, National Debt Will Exceed GDP

The Congressional Budget Office projected early last month that the federal debt held by the public would approach the size of the economy in a decade, rising from just over 80% of gross domestic product this year to 98% in 2030. Then the coronavirus pandemic led to much of the economy being shuttered and Congress passed its $2.2 trillion relief package. The Committee for a Responsible Federal Budget now projects that, as a result of those developments, debt held by the public will now exceed GDP by the end of this fiscal year. By 2023, the debt will top the record 106% of GDP set after World War II.

CRFB says the budget deficit will rise from about $1 trillion last year to $3.8 trillion (nearly 19% of GDP) this year and $2.1 trillion (about 10% of GDP) in 2021 — and the group adds that those projections “almost certainly underestimate” the deficit totals since they assume Congress doesn’t enact additional coronavirus aid or change current tax and spending laws. If the economy doesn’t recover strongly next year or bounce back fully within a few years, the budget watchdogs project that debt would climb to 117% of GDP by 2025.

Those numbers shouldn’t cast the federal response into question, though. “Like the record levels of borrowing undertaken during World War II, a large share of today's massive deficits are both inevitable and necessary in light of the current pandemic crisis,” the group says. But it warns that eventually, “such high and rising deficits and debt levels will prove unsustainable, and corrective action will be needed.”

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There won't be new emoji in 2021 because of coronavirus. ¯\_(ツ)_/¯



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