%1

Nancy Pelosi set a Tuesday deadline for more progress with the White House on a fiscal stimulus deal before the Nov. 3 election, while President Donald Trump renewed his offer to go beyond the dollar amounts now on the table, Bloomberg News reported. While Pelosi said that a pre-election deal remains possible, her team sent conflicting signals after setting a 48-hour deadline for progress on Saturday night. Her spokesman, Drew Hammill, later said the timing of the deadline means by the end of Tuesday, not Monday. At issue is wording “on the design on some of these things” that remain unresolved in the bill, Pelosi said on ABC’s “This Week.” “Are we going with it, or not? And what is the language?” she said. “The 48 only relates to if we want to get it done before the election, which we do.” Trump weighed in after drawing a rebuff by Senate Majority Leader Mitch McConnell last week for saying he’s prepared to go higher then the $1.8 trillion his team had been trying to offer Pelosi. She favors a $2.2 trillion plan. The president told reporters in Reno, Nevada, on Sunday, “I want at a bigger number” than Pelosi. “That doesn’t mean all the Republicans agree with me but I think they will in the end.” On Saturday, calling in to a Wisconsin TV station, Trump said he could exceed the amounts floated so far and voiced confidence that he “could quickly convince” Republicans wary of another large spending package to back a “good” deal. 

The Treasury Department privately encouraged lenders to prioritize existing customers when issuing loans for the federal government’s small-business coronavirus aid program, according to a report released on Friday by a Democratic-led congressional oversight subcommittee, the Wall Street Journal reported. The Treasury Department’s actions were one of several ways the Trump administration and several large banks put underserved businesses, including those owned by women and minorities, at a disadvantage when applying for the $670 billion Paycheck Protection Program, said the report from the House Select Subcommittee on the Coronavirus Crisis. Banks and other lenders issued PPP loans, and the Small Business Administration guaranteed them. The Treasury Department, which helped run the program along with the Small Business Administration, denied to the subcommittee that it had told banks to prioritize existing customers, the report said. The report said that documents obtained by the subcommittee show the Treasury Department instructed PPP lenders to “go to their existing customer base” when issuing the loans. “We encouraged all banks to offer loans to their existing small business customers, but no Treasury official ever suggested that banks should do so to the exclusion of new customers,” a Treasury Department spokesperson said. “The subcommittee’s conclusion to the contrary is false and unsupported by its own record.” On March 28, a day after the law establishing the PPP was enacted, Rob Nichols, president of the American Bankers Association, emailed the trade group’s board about a call with Treasury officials the previous day. “Treasury would like for banks to go to their existing customer base,” said the email, according to the report. “This will allow loans to move quickly,” Nichols added. A spokesman for the American Bankers Association said Friday the email “shows the lengths to which ABA was trying to assist the government in getting the PPP program off the ground in the middle of a pandemic.” He noted that while banks initially processed loans faster for customers they already knew, “over time it became easier to gather information to process new customers in this new and unprecedented program.”

As Congress continues to remain deadlocked over a new round of stimulus, studies show that the picture for many small businesses remains bleak, the Washington Business Journal reported. A National Federation of Independent Business survey showed 22 percent of PPP borrowers anticipate layoffs in the next six months, nearly half anticipate needing additional financial support in that time, and 44 percent of owners would apply for a PPP loan for the first or second time if Congress extended the program. New data from Yelp shows that 163,735 businesses on its platform have closed since the pandemic began, of which at least 60 percent are permanent. Bankruptcy reorganizations in September were higher than any September since 2011, according to the American Bankruptcy Institute. The already desperate situation for small businesses is magnified for owners of color, said Sarah Crozier, senior communications manager at small-business group Main Street Alliance. She said that 46 percent of Black, Latinx and Asian American business owners say they can only stay open for fewer than six months, per data from a study commissioned by the national small-business network. Overall, the study found, 75 percent of small-business respondents are finding it difficult to negotiate favorable deals with their landlords, while 70 percent say the same thing about their banks.

Senate Majority Leader Mitch McConnell (R-Ky.) yesterday rejected a coronavirus relief deal that costs more than $1.8 trillion, hours after President Trump indicated he was "absolutely" willing to raise his spending offer, FoxBusinessNews.com reported. Asked whether there can be a compromise between the White House-backed $1.8 trillion proposal and a $2.2 trillion offer put forward by House Democrats earlier this month, McConnell pushed back. “I don’t think so," he said. "That’s where the administration's willing to go. My members think what we laid out, a half a trillion dollars, highly targeted, is the best way to go." "What I’m going to put in the floor is what Senate Republicans, 52 out 53 of us, feel like it’s an appropriate response," he said. "You are correct there were discussions going on between the secretary of the Treasury and the speaker about the higher amount. That’s not what I’m gonna put on the floor.” McConnell's comments came shortly after Trump told FOX Business he was considering upping his offer for a coronavirus relief package above the White House's current $1.8 trillion proposal.

The chances of Congress passing a pre-election stimulus are all but gone, as Treasury Secretary Steven Mnuchin yesterday blamed politics for undermining the months-long negotiations, Bloomberg News reported. “At this point getting something done before the election and executing on that would be difficult, just given where we are in the level of details,” Mnuchin said. With a deal out of reach, the two sides in the talks faulted each other for the breakdown. The Treasury chief, who is scheduled to be in the Middle East next week, made his remarks after another in a long series of calls with Pelosi that have failed to seal a deal. While Mnuchin said he hoped for bipartisan support for Senate Majority Leader Mitch McConnell’s latest idea -- a vote on a narrow bill next week to help small businesses -- Democratic leaders have no appetite for piecemeal measures now. The inability to bring months of negotiations to conclusion has sparked increasing tensions, with each camp seeing internal strains rise as it becomes clear there won’t be a spending bill to take to the public.

Senate Majority Leader Mitch McConnell (R-Ky.) announced yesterday that the Senate will take up a narrow economic relief bill when it comes back in session next week, the Washington Post reported. President Trump immediately undermined the move, writing on Twitter: “STIMULUS! Go big or go home!!!” Senate Republicans have balked at a $1.8 trillion relief package Treasury Secretary Steven Mnuchin has offered to House Speaker Nancy Pelosi (D-Calif.). Trump, though, has suggested Republicans should agree to an even bigger deal than what Democrats have offered. Pelosi has already rejected Mnuchin’s offer as completely inadequate, criticism she repeated Tuesday in a letter to House Democrats where she wrote, “Tragically, the Trump proposal falls significantly short of what this pandemic and deep recession demand.” Meanwhile McConnell will try again to pass a much more limited proposal, something he already attempted last month. Democrats blocked it at the time and may do so again with the new bill, which seems like it will be similar to the last one. The new bill will cost roughly $500 billion and will include provisions to extend enhanced unemployment insurance and the small business Paycheck Protection Program, as well as money for hospitals and schools, among other things.

The White House again pivoted its approach to stimulus negotiations on Sunday, with the president’s aides pushing for immediate action on a narrow measure after the administration’s $1.8 trillion proposal was rebuffed by members of both parties, the Washington Post reported. In a letter to Congress sent Sunday, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin asked lawmakers to first pass legislation allowing the Trump administration to redirect about $130 billion in unused funding from the Paycheck Protection Program intended for small businesses while negotiations continue on a broader relief effort. The administration’s latest request is unlikely to advance in the House, where Speaker Nancy Pelosi (D-Calif.) has rejected stand-alone legislation in favor of a comprehensive package to address the economic and health consequences of the coronavirus pandemic. The administration’s $1.8 trillion stimulus proposal on Friday came under heavy criticism from lawmakers in both parties over the weekend, making its chances of passing appear remote. White House officials will request that Congress approve legislation allowing firms demonstrating a decline in revenue to apply for a second round of PPP funding, which they are not allowed to do under existing law, according to one person familiar with the plans who spoke on the condition of anonymity to discuss the administration’s internal planning.

When the federal government began the Paycheck Protection Program in April, one rule was clear to small-business owners bedeviled by its chaotic and messy start: If most of the loan money was used to pay employees, the debt would be forgiven. But as the program enters its loan-forgiveness phase, those owners — and their lenders — are finding out that although the principle may have been simple, its execution is anything but, the New York Times reported. Many lenders have yet to start accepting applications from borrowers to have the loans forgiven. They are waiting to see whether Congress will pass a proposal to automatically forgive debt of less than $150,000, the bulk of the loans made under the program. Read more. 

In related news, the Small Business Administration (SBA) and Treasury Department announced that they are simplifying the loan-forgiveness application for Paycheck Protection Program (PPP) loans under $50,000, The Hill reported. “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds," Treasury Secretary Steven Mnuchin said on Thursday, calling for additional simplification through legislation. The simpler, two-page form businesses can fill out to have their PPP loans forgiven is meant to ease burdens on struggling small businesses. Read more.