The Wall Street Journal - USA (2020-12-02)

THE WALL STREET JOURNAL. ***** Wednesday, December 2, 2020 |A

Under the GOP plan, busi-

nesses could receive a second

loan through the Paycheck

Protection Program, and

schools and colleges would re-

ceive more than $100 billion in

aid, while $31 billion would go

toward vaccine development

and distribution.

Lawmakers are also work-

ing to finalize a full-year

spending bill before the gov-

ernment’s current funding ex-

pires at 12:01 a.m. on Dec. 12.

Last week, Senate Republicans

and House Democrats agreed

on how to divvy up the $1.

trillion pot of money across

WASHINGTON—Lawmak-
ers released a blitz of compet-
ing coronavirus-relief propos-
als Tuesday, reigniting stalled
talks as the pandemic surges
across the country, but with-
out clear signs that Demo-
cratic and Republican leaders
would reach a consensus.
A bipartisan group from the
House and Senate unveiled a
roughly $900 billion compro-
mise proposal, offering one
route between House Demo-
crats’ last $2.4 trillion bill and
Senate Republicans’ recent
$650 billion proposal. Mean-
while, GOP and Democratic
leaders traded new offers as
the looming expiration of some
relief measures intensified the
pace of year-end legislating.
In another sign of the new
urgency, House Speaker Nancy
Pelosi (D., Calif.) and Treasury
Secretary Steven Mnuchin
held their first phone conver-
sation since the election on re-
lief measures and spending
legislation.

In an indication that GOP

leaders weren’t yet ready to

make major concessions, Sen-

ate Majority Leader Mitch

McConnell (R., Ky.) circulated

a new plan to his caucus that

he said reflected what Presi-

dent Trump would be willing

to sign, after speaking with

White House officials.

The new Republican offer,

similar to the recent Senate

GOP bill, includes more fund-

ing for small businesses, legal

protections for entities operat-

ing during the pandemic and a

one-month extension of ex-

panded unemployment insur-

ance programs that expire at

the end of December. It doesn’t

include additional funding for

state and local governments, a

priority of Democrats.

On Monday night, Mrs.

Pelosi and Senate Minority

Leader Chuck Schumer (D.,

N.Y.)sentalettertoMr.

McConnell outlining Demo-

cratic leaders’ latest offer.

Mr. Schumer declined to

give details of the proposal.

Democratic President-elect

Joe Biden again urged Con-

gress to reach a virus-relief

agreement before the end of

the year. He said that “any

package passed in the lame-

duck session is likely to be—at

best—just a start.”

The Republican proposal

would also repurpose money

from Federal Reserve lending

facilities, which Mr. Mnuchin

is letting expire at the end of

the year. Unemployment pro-

grams that expand eligibility

for receiving jobless benefits

and extend the timeline for re-

ceiving them would be contin-

ued for another month, into

January. People who already

participate in the programs

could draw benefits for two

additional months.

BYKRISTINAPETERSON
ANDANDREWDUEHREN

U.S. NEWS

the 12 spending bills that fund

the government.

Earlier Tuesday, a group of

lawmakers from both the

House and Senate unveiled a

$908 billion aid proposal,

highlighting the growing pres-

sure from rank-and-file law-

makers to pass additional cor-

onavirus aid.

The proposal, which would

run through March 2021, in-

cludes some measures sought

by both parties. Lawmakers

included $160 billion in state

and local funding, long one of

the biggest sticking points.

The bipartisan proposal

also gives a nod to one of Re-

publicans’ top priorities: legal

protections for businesses and

other entities. Lawmakers said

they would provide a short-

term suspension of liability

lawsuits related to Covid-19 at

the state or federal level, giv-

ing states time to put in place

their own protections.

The proposal also includes

$288 billion for small-business

relief, including PPP, $16 billion

for the distribution of a coro-

navirus vaccine, $82 billion for

schools, $25 billion for rental

assistance and $180 billion for

additional unemployment in-

surance, including $300 a week

through March, aides said.

In addition, the plan would

give $17 billion to airlines.

Lawmakers Offer Competing Aid Plans

GOP pushes funds for

small businesses, legal

shields; bipartisan bid

hints at compromise

Sen. Mitt Romney (R., Utah) on Tuesday spoke about the new bipartisan proposal, which would run through March.

SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES

tens of thousands of companies

that received PPP loans for

which they appear to have been

ineligible, such as corporations

created after the pandemic be-

gan.

The Paycheck Protection Pro-

gram was a centerpiece of the

$2.2 trillion coronavirus relief

bill known as the Cares Act,

which was approved by Con-

gress in March. Launched the

following month, PPP offered

forgivable loans to small busi-

nesses and nonprofits, indepen-

dent contractors and self-em-

ployed workers and had

distributed $525 billion when it

closed in August.

Several congressional propos-

als have called for reopening the

program to offer further assis-

tance to ailing businesses amid

signs that the economic recov-

ery is cooling as winter ap-

proaches. Treasury Secretary

Steven Mnuchin, in Senate testi-

mony Tuesday, also called for

additional aid for small busi-

nesses.

“SBA’s historically successful

Covid relief loan programs have

helped millions of small busi-

nesses and tens of millions of

American workers when they

needed it most,” an SBA spokes-

person said about the new dis-

closures.

The agency had fought the

release of additional information

on PPP loans, citing concerns

over borrowers’ privacy. Those

concerns were echoed by some

small-business advocacy groups.

The loans, which were issued

by financial institutions and

backed by the SBA, were a life-

line for firms hit by shutdowns

and social-distancing measures

during the coronavirus pan-

demic. The loans are forgivable

provided borrowers meet certain

criteria, and the SBA has begun

processing forgiveness requests.

Judge Boasberg in November

ordered the agency to release

more information about borrow-

ers from PPP, as well as those

from a separate SBA coronavirus

relief effort known as the Eco-

nomic Injury Disaster Loan Pro-

gram.

Judge Boasberg originally

gave the SBA until Nov. 19 to

provide the information, but the

SBA requested a stay, which the

judge granted temporarily as he

considered whether to grant it.

Judge Boasberg last week re-

jected the request and ordered

the agency to release the infor-

mation by Dec. 1.

The public “maintains an ur-

gent and immediate interest in

assessing the results of SBA’s

initial effort at administering a

massive small-business relief

package and extracting lessons

where possible—both to inform

a critical, ongoing federal debate

and to remedy failures in the

loan-disbursement process mov-

ing forward,” Judge Boasberg

wrote in the order.

The SBA had previously pro-

vided the names and addresses

of borrowers whose PPP loans

exceeded $150,000 along with

their loan range across five cate-

gories, from $150,000 to the

maximum of $10 million.

WASHINGTON—The Small
Business Administration on
Tuesday released detailed loan
information for millions of bor-
rowers under the Paycheck Pro-
tection Program, amid signs of
fraud in the government’s signa-
ture coronavirus relief effort for
small businesses.
The disclosure provides the
names, addresses and precise
loan amounts for each PPP bor-
rower. The SBA had previously
issued some detailed informa-
tion for PPP loans above
$150,000, though the bulk of the
program’s loans were smaller
than that.
U.S. District Judge James
Boasberg ordered the release of
more information on PPP bor-
rowers in response to a lawsuit
filed by news organizations un-
der the Freedom of Information
Act. Plaintiffs included Dow
Jones & Co., publisher of The
Wall Street Journal.
The SBA’s inspector general
said in October that there were
“strong indicators of widespread
potential abuse and fraud in the
PPP.” The watchdog counted

BYAMARAOMEOKWE

SBA Releases Details on More Borrowers

The Treasury Department’s
decision last month not to re-
new a suite of emergency Fed-
eral Reserve lending programs
touched off a partisan fight
over whether and how the Bi-
den administration should be
allowed to use the programs.
Lawmakers pressed Trea-
sury Secretary Steven Mnuchin
over his decision at a hearing
Tuesday with Fed Chairman
Jerome Powell before the Sen-
ate Banking Committee. It was
their first joint appearance
since last month’s decision,
which drew a rare objection
from the Fed.
The Fed and Treasury had
mostly collaborated smoothly
over providing emergency sup-
port to financial markets until
Mr. Mnuchin said Nov. 19 that
he wouldn’t extend the facili-
ties because he believed he
lacked the authority to do so, a
legal opinion that isn’t shared
by the Fed. He also said that
the programs were no longer
needed and that around $
billion in unused funds would
be better spent on other assis-
tance.
“My motivation was not po-
litical. It was purely legal,” Mr.
Mnuchin said. “If you want to
extend this, bring back legisla-
tion that would authorize me
to do it.”
The Fed said it would prefer
the lending programs remain
in place until the risks posed
to the economy by the corona-
virus pandemic, which has led
to a new surge of infections in
the U.S. and globally in recent
weeks, has subsided.
“Any central banker would
tell you it’s premature to be
pulling back support for the
economy,” Mr. Powell said.

Democrats see the programs

as a potential tool for the Bi-

den administration to deliver

more aid to hard-hit busi-

nesses, cities and states if Con-

gress doesn’t act to approve

more spending. Sen. Sherrod

Brown (D., Ohio) said to Mr.

Mnuchin at Tuesday’s hearing,

“You appear to be trying to

sabotage the economy on the

way out the door.”

Republicans have said they

are worried about relying on

the central bank to deliver re-

lief as a substitute for spend-

ing decisions that should rest

with Congress. “We want to

avoid morphing these pro-

grams into a mission that was

never the intended purpose,”

said Sen. Pat Toomey (R., Pa.)

in an interview on Monday.

The Treasury and Fed

launched five programs in

March and April supported by

$195 billion that the Treasury

provided to cover losses. Con-

gress had approved $454 bil-

lion in such funding for Mr.

Mnuchin to allocate to Fed

lending programs in the Cares

Act pandemic relief bill in

March.

Stock markets rebounded in

the days after the Fed and

Treasury announced the pro-

grams and staged a rapid re-

covery in the following months.

Lawmakers in both parties

accused the other of playing

politics with the programs on

Tuesday. Before last month’s

decision by the Treasury De-

partment, Democratic lawmak-

ers had been wary of the dis-

cretion the Cares Act gave to

Mr. Mnuchin; several of them

had referred to the $454 bil-

lion as a “slush fund.”

But on Tuesday, Sen. Tom

Cotton (R., Ark.) said it ap-

peared that Democrats, in de-

crying Mr. Mnuchin’s decision,

“would like to have a $454 bil-

lion slush fund” for the Biden

administration.

Sen. Robert Menendez (D.,

N.J.) said it wasn’t until after

President Trump lost his re-

election bid that Republican

lawmakers and the Treasury

Department indicated that Mr.

Mnuchin lacked the authority

to extend the lending pro-

grams

“Ending these facilities is

not mandated by law,” Mr. Me-

nendez said.

While the economy has re-

bounded more strongly than

the Fed and many private fore-

casters anticipated, Mr. Powell

said the number of Americans

who had been displaced from

their jobs during the pandemic

still exceeded the worst levels

of joblessness from the 2008

financial crisis.

“We can both acknowledge

the progress and point out just

how far we have left to go,” he

said. He later likened the gov-

ernment’s economic-policy re-

sponse to a bridge builder con-

structing a road across a chasm

created by the pandemic. “We

can see the end,” Mr. Powell

said. “We just need to make

sure we get there.”

BYNICKTIMIRAOS
ANDKATEDAVIDSON

Fed, Treasury Divide Over Lending

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