Pelosi moving to revamp small business rescue program

But complaints about the government loan program have become too big of a political problem to be ignored, according to lawmakers and aides, with members of both parties in the House and Senate pushing for changes in recent days.

“In this case we were hearing the exact same thing from all of the small businesses in our districts,” Rep. Dean Phillips (D-Minn.) said about working with conservative GOP Rep. Chip Roy of Texas to draft the bill. “We were perfectly aligned and we both recognized that to move legislation under these circumstances there has to be bipartisan genesis.”

The legislation that the House is planning to take up next week would give businesses more flexibility in how they use the $670 billion Paycheck Protection Program and still have their loans forgiven. The request has become an urgent demand from restaurants and other industries as shutdown orders nationwide have persisted longer than lawmakers first expected when they created the program in March. Business owners fear they will be stuck with the debt if changes aren’t made, and it’s made some employers skittish about using the money.

But the promise of a vote came during an urgent whip operation as Pelosi worked to corral support for her latest coronavirus aid package last week. Pelosi and her leadership team were working against tight margins — most Republicans had promised to oppose the aid package and both progressive and moderate Democrats had balked at the legislation for different reasons.

Pelosi buttonholed Phillips last Friday, talking to him for 25 minutes as she worked to whip support for the stimulus bill. Pelosi promised the Minnesota Democrat a vote on his legislation with Roy. The House will also vote on another Phillips bill requiring the Small Business Administration to disclose recipients of grants and loans funded under coronavirus relief legislation.

Phillips, previously undecided on the aid package, which Pelosi dubbed “the Heroes Act,” switched his vote to “yes.”

“I expressed to her there are elements, some of which are included in the Heroes Act, that I thought didn’t have the luxury of time and negotiation, particularly the fixes to the PPP program, which small businesses have been describing to me for many, many weeks,” Phillips said.

“I was impassioned and she listened and not only did she not object, she thought it was a very reasonable request and one that it appears will receive a vote on the House floor next week,” he added.

Some Democrats have privately questioned whether this move opens up the door to Pelosi shifting strategies completely and putting bills that address narrower coronavirus-related issues on the floor — as opposed to the massive aid packages seen so far — an idea Rep. Peter Welch (D-Vt.) suggested in a private caucus call Monday.

But senior Democratic aides dismissed the idea that pushing through the bipartisan small business bill could drain their leverage and discourage Republicans from negotiating a much larger coronavirus relief package.

While the bill makes necessary tweaks to the small business program, the aides argued, there are still major issues that must be resolved in the coming weeks, including how to prop up struggling local and state governments and whether to extend popular unemployment benefits beyond July.

Still, the move by the House is the latest evidence that the outlook for the economy has worsened since Congress passed a $2 trillion rescue package two months ago and that lawmakers are facing a new sense of urgency in how to keep Americans afloat.

It also reflects a sense of restlessness among rank-and-file lawmakers who have been largely left out of earlier negotiations over more sweeping legislation to respond to the crisis.

“These provisions are not political,” said Roy, who drafted the small business loan changes with Phillips. “These provisions are generally well-accepted, generally bipartisan, generally desired by small businesses across the entire country.”

The bill from Phillips and Roy would address many of the complaints from businesses about the implementation of the Paycheck Protection Program.

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