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The U.S. Senate delayed the start of debate on President Joe Biden’s $1.9 trillion COVID-19 relief bill until at least Thursday after reaching a deal to phase out $1,400 payments to higher-income Americans in a compromise with moderate Democratic senators, Reuters reported. The Democratic-controlled Senate is hoping for a final vote later in the week on passage of Biden’s top legislative priority. Before the bill hits the chamber floor, Democrats are negotiating limits to a measure Republicans have attacked as wasteful. The Senate will reconvene at noon on Thursday, said Senator Dick Durbin, the chamber’s No. 2 Democrat. The House of Representatives canceled its Thursday session after the Capitol Police warned of a possible attack on the building by a militia group. Senate officials did not respond to questions about whether their security plans would change. Senate Democrats said the coronavirus stimulus proposal, which would block Americans earning $80,000 per year or more and couples earning $160,000 or more from receiving the $1,400 payments, was a good solution.

Small-business requests for money from the federal government’s signature COVID-19 relief initiative are running well below last year’s heady pace, prompting changes in the program’s final month to reach the hardest-hit businesses, the Wall Street Journal reported. The Small Business Administration yesterday released new guidance on the changes to the Paycheck Protection Program. It revamped the formula for calculating loans to sole proprietors and some other businesses, making the program more attractive to the smallest firms. Justin Burgess of Deco-Dence Gallery & Studio, a dealer of art deco furniture and a custom-furniture maker in Dallas, had initially decided not to apply for a second PPP loan this year after receiving $3,000 in 2020. “It was just a pittance,” said Mr. Burgess, whose sales have fallen by roughly 50% during the pandemic. “It was a lot of work for very little return.” The new approach should “make it much more advantageous,” said Mr. Burgess, who now plans to apply for a second loan. SBA data as of Feb. 28 show the agency had approved 2.2 million PPP loans totaling about $156 billion — just over half the funds available — during the newest round. After closing last August, the PPP reopened in January with $284 billion in funding to provide forgivable loans to first- and second-time borrowers. The deadline for applications is March 31.

President Joe Biden’s imperative of swiftly passing his $1.9 trillion pandemic-relief program faces one of its final hurdles: settling disputes among Senate Democrats over how to ensure aid gets to those who truly need it, Bloomberg News reported. With Republicans accusing Democrats of advancing a mammoth spending bill just as the economy is poised to accelerate, a handful of moderate senators is pushing for changes that reduce the risk of assistance flowing to households relatively unscathed by the crisis or to individuals who’d otherwise head back to work. The Biden administration has consistently argued that the risk of going too small is greater than the danger of excess spending. The president has urged Democrats, above all, to get the bill passed quickly. The Senate is planning to formally open debate on the pandemic-relief bill as soon as Wednesday afternoon. Senior Democratic lawmakers gave every indication that their caucus will be able to sort through the debate over potential tweaks to the proposed $400-a-week supplemental unemployment benefit and $1,400 stimulus checks included in the House version of the aid bill. Senate Majority Leader Chuck Schumer said that the package is on track to get to Biden by March 14, when the current benefit of $300 a week in help to the jobless runs out. The House version of the aid plan bumps that benefit up to $400 a week through August, and that’s been a point of contention. Joe Manchin of West Virgina and Jeanne Shaheen of New Hampshire want to keep the level at $300. Senate Budget Committee Chair Bernie Sanders is among those pushing for the higher total.

The House approved President Joe Biden’s $1.9 trillion pandemic rescue plan in a 219 to 212 vote early Saturday morning, sending the measure to the Senate as Democrats race to pass it into law before boosted unemployment payments expire next month, <em>Politico</em> reported. All but two Democrats supported the sprawling coronavirus relief package, with zero Republicans backing it — a major step toward enacting the White House’s first major legislative priority amid dueling public health and economic crises. Days after the U.S. marked 500,000 deaths to the virus, the Democrats’ COVID aid bill would send $1,400 stimulus checks to millions of Americans, boost unemployment payments and increase the child tax credit. It would also provide billions of dollars in aid to small businesses, states and efforts to test for and vaccinate against the coronavirus. But House GOP leaders, who kept their members in line against the bill, have argued the price tag is too high, with programs that are unrelated to fighting the virus. If passed, the package will be one of the largest ever approved by Congress, and the fifth major piece of legislation approved since the pandemic began. The Senate will take up the measure this week, where top Democrats will be forced to grapple with a major setback to Biden’s plan — their push to include a long-sought minimum wage increase has officially run afoul of the Senate’s arcane budget rules. For now though, the House package still includes that federal minimum wage hike to $15 an hour, assuring minimal drama in the lower chamber, and forcing Senate Republicans to formally nix it.

The Federal Reserve and other bank regulators are flashing a new warning sign for the U.S. economy: Businesses ravaged by Covid-19 are sitting on $1 trillion of debt and a high percentage of it is at risk of going bust, Bloomberg News reported. Watchdogs flagged 29.2% of complex corporate lending as troubled in 2020, up from 13.5% in 2019, according to a report released yesterday by the Fed and other agencies. Real estate, entertainment, transportation, oil and gas, and retail were cited as particular problem areas. A “disproportionate share” of the riskiest loans were held by nonbanks, such as investment funds that engage in leveraged lending, insurers and pension funds, the regulators added. “While risk has increased, many agent banks have strengthened their risk management systems since the prior downturn and are better equipped to measure and mitigate risks associated with loans in the current environment,” the Fed, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency said in a statement that accompanied the release of their Shared National Credit Review. Still, banks’ share of the weakest loans has also been rising, with some of their holdings -- particularly those associated with oil and gas -- facing credit downgrades during the pandemic, the report found. Banks’ percentage of borrowings deemed below the standards preferred by regulators increased to 45% from 35% a year earlier. For their report, the Fed and other agencies evaluated $5.1 trillion in complex lending involving multiple firms, with half of it representing leveraged loans. Real estate, entertainment, transportation, oil and gas, and retail represented 21.6% of the lending that the regulators examined. The 29.2% of “non-pass loans” highlighted in the report represent those the agencies categorize as meriting “special mention,” being substandard or at risk of triggering losses for lenders. During the pandemic, the debt load involving leveraged lending -- borrowings by the riskiest companies -- has been on the upswing. In so-called syndicated loans backing U.S. acquisitions, leverage surged to at least a five-year high in the fourth quarter, according to Covenant Review.

Senate Democratic Whip Dick Durbin (D-Ill.), Chair of the Senate Judiciary Committee, and U.S. Senator Chuck Grassley (R-Iowa), Ranking Member of the Senate Judiciary Committee, yesterday introduced the COVID-19 Bankruptcy Relief Extension Act, bipartisan legislation to temporarily extend COVID-19 bankruptcy relief provisions enacted as part of the March 2020 CARES Act and December 2020 omnibus appropriations bill. The bill would extend for an additional year CARES Act bankruptcy provisions that are set to expire on March 27, 2021. Click here to read the full press release on the legislations provisions.

Get the insight, analysis and statistics you need on the Small Business Reorganization Act and subchapter V elections by visiting ABI’s SBRA Resources website.

Senior executives from more than 150 companies are voicing support for President Joe Biden’s $1.9 trillion stimulus package in a letter to congressional leaders urging them to pass coronavirus relief, Bloomberg News reported. The letter is signed by leaders across industries, including David Solomon, chairman and chief executive officer at Goldman Sachs; Stephen Schwartzman, the chairman and CEO of Blackstone; Sundar Pichai, the CEO of Google; and John Stankey the CEO of AT&T. “We write to urge immediate and large-scale federal legislation to address the health and economic crises brought on by the COVID-19 pandemic,” the executives wrote in the letter. “Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration’s proposed American Rescue Plan.” The letter’s signatories included several past supporters of former President Donald Trump, including Schwartzman, one of the biggest contributors to Trump’s re-election bid from the world of high finance, and New York real estate magnate Richard LeFrak. Biden’s bill includes a range of spending measures, including for distributing vaccines, reopening schools, support for state and local governments and the direct payments that the president promised during the campaign season. Democrats are moving forward with the bill despite not having much support from Republicans, who have called the measure too expensive and unnecessarily broad.

The House Budget Committee yesterday advanced President Biden's $1.9 trillion COVID-19 relief bill on a 19-16 party-line vote, The Hill reported. The bill must be marked up by the House Rules Committee before consideration on the House floor, likely on Friday or Saturday. The legislation will then have to be taken up in the Senate, where it is expected to face considerable procedural and political challenges. "We are in a race against time. Aggressive, bold action is needed before our nation is more deeply and permanently scarred by the human and economic costs of inaction," Committee Chairman John Yarmuth (D-Ky.) said at the hearing. The bill includes $1,400 stimulus checks, extensions to emergency unemployment benefits, funding for vaccinations and testing, $129 billion for schools, increases to child tax credits and earned income tax credits, and a plan to increase the minimum wage to $15 an hour by 2025. Rep. Brendan Boyle (D-Pa.) noted that the legislation is widely popular, with some 70 percent public support, including half of Republicans.

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday, Bloomberg News reported. “Business leverage now stands near historical highs,” the central bank said in its semi-annual Monetary Policy Report to Congress. “Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.” In part encouraged by government and Fed programs, businesses have taken on more debt over the past year as they’ve struggled to deal with the economic and financial fall-out from COVID-19, including in some cases forced shutdowns. The Fed report, which provides lawmakers with an update on economic and financial developments and monetary policy, was published on the central bank’s website ahead of Chair Jerome Powell’s testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel a day later. In the report, the Fed voiced hopes of an end to the pandemic later this year though it cautioned that pitfalls remained. In particular, it said that commercial real estate prices “appear susceptible to sharp declines” from historically high levels. That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said. Commercial real estate might be hit by a double-whammy after the pandemic, some economists say. An increase in people working from home could result in less demand for office space, while stepped-up online purchases could force more shutdowns of brick-and-mortar retailers and additional vacancies at shopping centers.