White House, Democrats close on new small business aid package

Photo (c) narvikk - Getty Images

Democrats pushed to add funding for hospitals and state governments

Treasury Secretary Steven Mnuchin says his talks with Congressional Democrats over the weekend were productive and that the two sides are close to a deal on another small business aid package.

The aid package reportedly under discussion would spend another $370 billion, with much of it going to the popular Paycheck Protection Program (PPP). The government made $350 billion in those loans in less than two weeks.

Democrats initially opposed a Senate measure that refunded that program, holding out for aid to other entities. The Treasury secretary said the new legislation would likely include $75 billion for hospitals and $25 billion to expand state testing for the virus -- two main negotiating points for Democrats.

“I’m hopeful we can reach an agreement the Senate can pass tomorrow and the House can pass Tuesday,” Munuchin said in a Sunday interview on CNN. “We’re making a lot of progress.” 

Top Congressional Democrats confirmed Mnuchin’s interpretation of the talks, though they were slightly less optimistic on the timeline for passing something. On CNN, Senate Democratic Leader Chuck Schumer (D-N.Y.) said the two sides have “made very good progress.”

Popular loan program

Under the terms of the PPP, businesses with fewer than 501 employees are eligible for special Small Business Administration (SBA) loans. If they keep their payrolls intact during the term of the loan and make no layoffs, the portion of the loan used to meet payroll could be forgiven. 

The program has two objectives -- keeping America’s small businesses solvent and keeping as many people as possible employed. An estimated 20 million Americans have filed for unemployment benefits as the coronavirus (COVID-19) shut down the economy.

While small businesses are struggling to survive amid the shutdown, so are large businesses -- in particular national retail chains like JCPenney, Macy’s and Neiman Marcus. Reuters reports Neiman Marcus is considering bankruptcy after temporarily closing all of its stores and furloughing most of its employees.

Neiman Marcus missed making debt payments last week that totaled millions of dollars, including one that only gave the company a few days to avoid a default.

Could your debt be reduced or forgiven? Take our financial relief quiz.