Lawmakers signal that deal could be near to deliver more coronavirus aid to small businesses

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U.S. lawmakers on Friday were giving signs that they might reach a deal soon on providing more money for small businesses hit by the coronavirus crisis, in a development that would end a stalemate that has persisted for more than a week.

The top House Republican — Minority Leader Kevin McCarthy — said he would be willing to package an additional $250 billion for a Paycheck Protection Program with assistance for hospitals. The PPP ran out of money on Thursday.

“Hospitals need the help. Hospitals are the modern-day soldiers,” McCarthy told The Wall Street Journal. “I’d like to see money in there — money in the PPP and money in hospital — that would be a very smart move right now.” The California congressman also said he discussed combining hospital and small-business funding with President Donald Trump late Thursday and believed Trump was open to it.

Read more:SBA touts loan approvals, but there’s little evidence small businesses are seeing cash

And see:How Congress is spending trillions in response to the coronavirus crisis — in one chart

Previously, Republicans had pushed just for replenishing the loan program for small businesses, and they had resisted Democratic calls for tacking on other provisions, such as $100 billion for health-care institutions, $150 billion for state and local governments, and extra help for food-stamp recipients. Democrats also have wanted more of the PPP loans channeled through community-based financial institutions that serve a diverse range of enterprises.

Related:Small-business owners express confusion, fear over federal bailout fund

And see:Coronavirus small-business aid program could ultimately need $1.8 trillion in funding

The top Senate Democrat — Minority Leader Chuck Schumer — also sounded optimistic about achieving an agreement.

“We’ve had constructive talks,” the senator from New York told MSNBC. “They are going to continue through the weekend, and I don’t see any reason why we can’t come to an agreement soon.”

The loan program for small businesses initially received $350 billion in last month’s $2.2 trillion coronavirus package, known as the CARES Act, or Washington’s “Phase 3” response to the pandemic. If a deal is reached in the coming days on replenishing the PPP, the Republican-run Senate could approve the funding in its pro-forma session scheduled for Monday, leaving the Democratic-led House to follow suit later in the week.

In addition to boosting the PPP, which some analysts are describing as a “Phase 3.5” response, Democratic and Republican lawmakers and the Trump administration are working on “Phase 4” legislation targeting the coronavirus crisis. Analysts have predicted that next big spending package, also called CARES 2, could cost about $1 trillion and not become a reality for several weeks.

Check out:Democratic congresswoman as red states beat out blue ones for small-business aid: ‘I smell a rat’

U.S. stocks DJIA, +2.99% SPX, +2.67% have been plunging for weeks on coronavirus-related worries but have pared some of their losses thanks in part to hopes surrounding Washington’s aid programs.

Originally Published on MarketWatch

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