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Ongoing revelations about how big businesses and chains were able to secure hundreds of millions of dollars in funding from the Paycheck Protection Program are shaping discussions in Congress about which employers should be eligible if another $300 billion is approved under another proposed stimulus package, the Washington Post reported. National chains received tens of millions of dollars more from the emergency small-business program than previously known. For example, more than 1,000 Sonic Drive-In restaurants received PPP funds, accumulating more than $100 million in all, according to a Washington Post analysis of recently released Small Business Administration data. This despite the fact that Sonic is backed by a private equity giant and performed well during the pandemic. Meanwhile, there is mounting evidence that other PPP recipients have had to lay off scores of workers due to the longer-than-expected pandemic and because recipients were not allowed to receive funds more than once. Employers that received PPP cut an estimated 900,000 jobs nationwide as a result of their loans expiring, according to a new analysis of data from Gusto, a payroll and benefits company. Read more. 

In related news, the dedicated congressional coronavirus oversight panel grilled Treasury Secretary Steven Mnuchin yesterday over a rescue loan issued to a shipping company through a program meant for businesses that are crucial to national security, The Hill reported. Members of the Congressional Oversight Commission (COC), created to oversee the implementation of the CARES Act, pressed Mnuchin during a hearing on why the Treasury and Defense departments deemed it necessary to lend $700 million to YRC Worldwide. The commission has been fiercely critical of Mnuchin and the Defense Department’s decision to issue the rescue loan, as well as with lending terms they fear are too generous to a company with longstanding financial issues. Members also questioned whether YRC is truly essential to national security and why the Pentagon has contracted YRC for a significant proportion of its shipping needs. Read more. 

Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Nancy Pelosi (D-Calif.) have given no sign yet that they’re ready to directly engage in negotiations to sort through competing pandemic relief proposals — a step that many lawmakers say will be necessary to complete a deal this month, Bloomberg News reported. The Senate GOP leader is now on board with a $916 billion proposal released on Tuesday by Treasury Secretary Steven Mnuchin, while the House speaker sees a rival $908 billion plan still being drafted by a bipartisan group of lawmakers as the best path to a deal to aid the struggling U.S. economy. Their positioning shows consensus emerging on an overall price tag. But the proposals differ on key features. Although their proxies are engaged in negotiations, the top congressional leaders haven’t yet planned a meeting to resolve the outstanding issues. The biggest holdups for months have been a McConnell quest for a liability shield for employers facing coronavirus-related lawsuits that congressional Democrats don’t want, and a push by Pelosi for a substantial amount of state and local government aid that’s anathema to many Republicans in both chambers. Pelosi continues to say that the best chances for a deal are bipartisan Senate talks where a handful of rank and file Republican are open to just a pause in liability lawsuits instead of the changes McConnell wants. The Senate leader wants to defer to the separate White House’s offer, believing only President Donald Trump will likely sway most Republicans to back a trillion dollar aid package. Pelosi and McConnell, along with Senate Minority Leader Chuck Schumer and House Minority Leader Kevin McCarthy, must finally resolve this lingering dispute, according to legislators on both sides of the aisle.

Treasury Secretary Steven Mnuchin presented a new $916 billion COVID-19 relief proposal to House Speaker Nancy Pelosi, in the first move by the Trump administration since Election Day to break a months-long standoff, Bloomberg News reported. Pelosi and Senate Democratic leader Chuck Schumer called it progress, but said that it shouldn’t be used to obstruct the bipartisan negotiations already underway on a proposal from a group of Democratic and Republican lawmakers. The Mnuchin offer, which was made to Pelosi yesterday, was essentially a joint proposal from the White House, Senate Majority Leader Mitch McConnell (R-Ky.) and House Republican leader Kevin McCarthy (R-Calif.). Mnuchin said that he conferred with President Donald Trump, whose support will be needed to gather GOP votes. “This proposal includes money for state and local governments and robust liability protections for businesses, schools and universities,” Mnuchin said. Those issues have been the two key roadblocks in bipartisan talks on a $908 billion proposal put forth last week. “It’s a much better product” than the $908 billion option, McCarthy said. Pelosi and Schumer said in a joint statement that getting McConnell to go along with a $916 billion proposal was progress, but that the focal point should be the talks still going on in Congress on the bipartisan plan. They faulted the White House plan for leaving out enhanced unemployment benefits. Along with a widely supported renewal of aid for small businesses, the Mnuchin plan includes stimulus checks, something that members of both sides of the aisle have favored — including President-elect Joe Biden and Trump. There’s $600 per qualifying adult, with another $600 per child, according to McCarthy. Those checks would be in place of the $300 per week temporary supplementary unemployment benefits included in the bipartisan proposal. The proposal does extend two other expiring unemployment insurance programs — one for gig workers and the other for workers who have exhausted their 13 weeks of standard benefits.

With the coronavirus surging and colder weather limiting outdoor activities, the economy needs another round of fiscal policy support. Aid to small businesses should be part of any federal package, but it should be structured somewhat differently than the original Paycheck Protection Program, according to a commentary in today's Wall Street Journal. The economy added 245,000 jobs in November, and the unemployment rate fell to 6.7 percent. But the pace of job gains is notably slower than the 2.7 million net new jobs added in May and the 4.8 million added in June. Consumer spending is slowing, and consumer confidence is weakening. The household savings rate has plummeted since April, as consumers burn through savings. After a remarkable recovery this spring, a double-dip recession is in the cards. That recovery was aided by PPP, created as part of the Cares Act to provide forgivable loans — essentially grants to finance operating costs — to businesses with fewer than 500 employees, according to the commentary. Our research shows that PPP supported employment and increased financial health in the small-business sector. In addition, PPP supported labor demand and is reducing the length of the recovery by helping small businesses — the potential employers of any unemployed workers — to survive over the spring, summer and fall. Read more. (Subscription required.) 

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

In related news, the Senate Committee on Small Business and Entrepreneurship will hold a hearing tomorrow at 10 a.m. EDT titled "Small Business in Crisis: The 2020 Paycheck Protection Program and its Future." For a link to the live webcast and prepared witness testimony, please click here. 

Almost a week after Democratic congressional leaders climbed down from their demand for a multi-trillion dollar stimulus package, Senate Majority Leader Mitch McConnell (R-Ky.) continued to tout his own plan, endangering prospects for a compromise, Bloomberg News reported. McConnell’s top priority — federal limits on COVID-19 related lawsuits against businesses — has emerged as the key potential deal-breaker. Republicans have balked at the six-month moratorium proposed in a bipartisan stimulus package, saying it’s too limited, and talks have stalled. McConnell’s continued use of rhetoric that pre-dates the shift by House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on the overall dollar amount of aid underscored the risk of no further COVID-19 help by year-end. Senators from both sides of the aisle concluded that the prospects for a $908 billion compromise that Republican and Democratic negotiators are hashing out will come down to McConnell’s decision. Several GOP members have endorsed or been open to the plan, and top White House economic adviser Larry Kudlow said President Donald Trump would likely sign it. The Republican and Democratic negotiators continued to butt heads over aid for states and localities as well as the coronavirus liability protection for businesses. “Those are coupled together,” said GOP Senator John Cornyn of Texas, who couldn’t predict whether the relief package will be enacted. “There’s either going to be none for both of those, or both of those that are going to be provided for. My hope is we’ll do both.” Republicans have blasted state assistance as a bailout for mainly Democratic areas, while Democrats have refused to give employers a shield from lawsuits over poor protection against the spread of COVID-19. Time is running ever shorter on getting a deal, which Senator John Thune, the No. 2 Republican in that chamber, said yesterday would be attached to either a stopgap federal spending bill or omnibus appropriations legislation that funds the government into 2021. Read more. 

In related news, Congress will vote this week on a one-week stopgap funding bill to provide time for lawmakers to reach a deal in talks aimed at delivering COVID-19 relief and an overarching spending bill to avoid a government shutdown, Reuters reported. Lawmakers in the Republican-led Senate and Democratic-run House of Representatives need to enact a funding measure by Friday, when current funding for federal agencies is set to expire. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell hope to attach long-awaited COVID-19 relief to a broad $1.4 trillion spending bill. But with those negotiations yet to produce agreement, McConnell and House Majority Leader Steny Hoyer said separately yesterday that both chambers would vote this week on a measure to allow an additional week of talks. “I am disappointed that we have not yet reached agreement on government funding. The House will vote on Wednesday on a one-week CR to keep government open while negotiations continue,” House Majority Leader Steny Hoyer, the chamber’s No. 2 Democrat, said in a tweet. McConnell did not specify when the Senate would take up the measure. Read more. 

Millions of Americans who lost their jobs during the pandemic have fallen thousands of dollars behind on rent and utility bills, a warning sign that people are running out of money for basic needs, the Washington Post reported. Nearly 12 million renters will owe an average of $5,850 in back rent and utilities by January, Moody’s Analytics warns. Last month, 9 million renters said they were behind on rent, according to a Census Bureau survey. Economists say that the data underscores the deepening financial disaster for many families as the pandemic continues to shut off work opportunities, lending new urgency to negotiations over a second round of stimulus that could reinstate federal unemployment insurance and rental assistance, among other forms of aid. The stakes are high for some 20 million Americans receiving some kind of unemployment aid, who have seen weekly checks dwindle since August, making it harder to pay bills. About 12 million unemployed are slated to have their benefits cut off entirely at the end of the year unless lawmakers act before then.

A bipartisan group of U.S. senators will unveil legislation as early as today for additional fiscal stimulus worth about $908 billion, in an effort to speed up aid to an economy at risk of a further dip due to a record spike in coronavirus cases, the Financial Times reported. But Mark Warner, one of the Democratic senators leading the ten-strong bipartisan group pushing for the relief money, acknowledged that the effort was taking fire from both sides of the aisle over their proposal for a four-month emergency package. “We may have to go through a few more days of drama,” Sen Warner told CNN on Sunday. He added that it remained unclear whether Republican Senate majority leader Mitch McConnell would permit the legislation to go forward for a vote, despite expressing positive sentiments about the effort. The proposal includes $288 billion in small business aid, $180 billion in unemployment benefits that would boost weekly payouts by $300 and $160 billion for cash-strapped state and local governments. It would also offer aid to troubled sectors, including $17 billion for the airline industry. One sticking point remains whether to accord liability protection for businesses that reopened during the pandemic. Read more. 

House Speaker Nancy Pelosi (D-Calif.) said on Friday that she wants to attach a coronavirus relief bill to a $1.4 trillion omnibus spending package that would avert a government shutdown later this month, raising the prospects of long-stalled stimulus relief finally being signed into law, Politico reported. Pelosi said that Senate Majority Leader Mitch McConnell agreed with her about combining the annual spending measures with coronavirus relief during their conversation on Thursday, the first time in weeks the two leaders have discussed moving a relief bill. President-elect Joe Biden on Friday said that he’s “encouraged” by the $908 billion proposal, framing it as the type of bipartisan work that he hopes to foster as president. He cautioned that “any package passed in the lame duck session is not going to be enough overall.” But hurdles remain. Government funding runs out in just one week, and there are still a sizable number of issues impeding an agreement on a massive spending package that would increase agency budgets for the rest of the fiscal year. Read more.

Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Nancy Pelosi (D-Calif.) spoke yesterday amid growing momentum for a targeted coronavirus relief deal, the Washington Post reported. They also discussed reaching a deal on a spending bill to avert a government shutdown on Dec. 11. Their talks — the first since the Nov. 3 election — came shortly after a growing number of lawmakers have rallied behind a $908 billion bipartisan spending bill that would aim to buttress parts of the economy over the next several months. While some of these lawmakers stopped short of endorsing every part of the proposal, many said the offer was solid enough that it should be used as the basis for negotiations, a sentiment that Pelosi and Senate Minority Leader Charles E. Schumer (D-N.Y.) expressed Wednesday. Sens. Joni Ernst (R-Iowa), Charles E. Grassley (R-Iowa), Lindsey O. Graham (R-S.C.), John Cornyn (R-Tex.) and Kevin Cramer (R-N.D.) signaled their openness to the package, which had been unveiled by a group of moderate Republican and Democratic senators on Tuesday. The measure is more than what Senate Republicans had originally offered and less than what House Democrats had wanted, but it is designed to try to provide immediate relief to some parts of the economy as the pandemic enters a dangerous and increasingly deadly phase. Graham said he’s “never been more hopeful that we’ll get a bill … the $908 billion bill, that’s the one I support.” He said he had talked to President Trump about the measure “extensively.”

The U.S. passenger and cargo airline industry saw total employment fall by nearly 29,000 workers through the month ending in mid-October as government restrictions on laying off staff expired, Reuters reported. The U.S. Transportation Department said U.S. airlines employed 673,278 workers in mid-October, which was 81,749 fewer than in March when U.S. travel demand started falling dramatically due to the coronavirus pandemic. The department said that since March, United Airlines had reduced its workforce by 32 percent, or 29,243 employees, while Delta Air Lines eliminated 32 percent of its jobs, affecting 28,751 employees. In October, American Airlines and United Airlines said they were furloughing more than 32,000 workers after the prior $25 billion payroll assistance program expired on Sept. 30. The U.S. airline industry is still losing billions of dollars a month as travel demand remains down more than 60 percent and recent coronavirus travel advisories have discouraged holiday travel.