Senate votes overwhelmingly to extend small business bailout
Democrats and Republicans have come to an agreement relatively quickly in recent days to keep the popular agenda open, after banks warned loan applications risked being stuck in a backlog created by the new controls of SBA fraud. The extension, supported by a wide range of business groups, would also allow more employers to take advantage of Biden’s new administration rules designed to expand access for small businesses and others struggling to get. loans before.
“There is no reason to let this program expire when there are dozens of small businesses still online and billions of dollars left in the program to provide desperately needed help,” the chief said Tuesday. the majority in the Senate, Chuck Schumer.
The passage of the bill is just the latest example of Congressional intervention to continue the emergency rescue, which lawmakers created last March to keep workers and businesses in business for the short term during the pandemic. . The temporary program has soared to nearly $ 1 trillion in funding and has seen its rules repeatedly revised by lawmakers. The PPP has distributed more than 8 million forgivable business loans worth $ 718 billion since its launch last April.
Thursday’s vote will likely not be the last time Congress revisits the program.
The extension bill does not include additional funding. While the SBA says $ 79 billion is still available to lend, a senior official told senators in a hearing Wednesday that the money could only meet demand from mid-April to the end of April – well ahead of the May 31 application deadline in the new extension. It is not known whether this will make lawmakers consider appropriating more money.
Outside of funding, the heads of the House and Senate small business committees say they plan to consider other changes to the program after the extension. A top priority is enabling more independent Americans and sole proprietors to take advantage of the more generous lending terms the Biden administration began offering to businesses in this category earlier this month. Legislators want these new rules to apply retroactively so that companies that received PPP funds before the change can go back and increase the amount of their previous loans.
“I don’t think it’s going to be a big amount of money,” Small Business Senate Speaker Ben Cardin (D-Md.) Said. “But it’s just not normal for someone who filed their claim early not to be able to take advantage of it.”
Senators Marco Rubio (R-Fla.) And John Kennedy (R-La.) On Thursday unsuccessfully proposed two amendments to the PPP extension bill. Democrats opposed the measures in part because they said their inclusion would have derailed the bill’s enactment. Any change would have required the House to re-pass the bill, and that chamber is out until mid-April. The House first passed the extension last week in a 415-3 vote.
Rubio’s amendment would have restricted the SBA’s ability to prioritize certain borrowers over others. Kennedy’s Amendment would have banned business owners from using the program if they had been convicted of a crime related to a riot or civil unrest dating back two years.
The SBA says it is working to resolve the PPP processing issues that have delayed applications since the agency introduced new fraud checks earlier this year. SBA associate administrator Patrick Kelley told senators on Wednesday the agency was preparing to roll out a “machine learning tool” to help reduce the backlog of applications. He said the SBA is also working with lenders on steps to be taken to certify that claims flagged for review can go ahead.
Separately on Thursday, the House special subcommittee on the coronavirus crisis released findings showing that $ 626 million was seized or confiscated as a result of federal investigations involving the PPP and the disaster loan program economy of the SBA, which was expanded during Covid-19. The subcommittee, also taking into account investigations by the SBA inspector general, said there had been nearly $ 84 billion in questionable transactions in total in the two programs.
SBA Inspector General Hannibal “Mike” Ware told the subcommittee in a hearing Thursday that identity theft is possibly the most common underlying cause of fraud in the EIDL program and is occurring. was also demonstrating in the PPP. He said more than a million requests had been reported for identity theft in programs and that his office planned to release a report on the matter next month.