Congressional stalemate deepens as Pelosi, Schumer say they won’t budge on coronavirus funding demands

WASHINGTON - House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said Monday that they won't agree to the Trump administration's insistence on more money for small business loans unless their demands are met for additional funding for hospitals, state and local governments and food stamp recipients.

But Treasury Secretary Steven Mnuchin said the Democrats' demands should wait for another day, while the small business program needs more money now.

"We've committed to small businesses. We should top up that program now," Mnuchin said at a briefing of the White House coronavirus task force. "I know the Democrats want to talk about more money for hospitals and states. Right now, we're just sending the money out to the hospitals and states. They haven't come close to using that money."

Pelosi, D-Calif., and Schumer, D-N.Y., also rejected suggestions from President Donald Trump that the country could reopen quickly, saying "there is still not enough testing available to realistically allow that to happen."

The back-and-forth between Mnuchin and the Democratic leaders on Monday followed a Saturday statement from congressional GOP leaders in which they rejected the Democrats' demands and showed no interest in negotiating.

The developments appeared to harden a stalemate on Capitol Hill over how or when the federal government will take further action to address the worsening economic impacts of the coronavirus, with millions newly unemployed and much commerce in the nation at a virtual standstill as the U.S. confronts recession conditions.

Congress acted quickly late last month to pass a massive $2 trillion rescue package for small and large businesses, individual Americans and the unemployed, as well as health-care systems and local governments. There is a recognition that more will need to be done - but not an agreement on how to structure new funding.

Complicating matters, both the House and Senate are out of session because of concerns about the pandemic, so the only way to pass legislation is through voice vote or "unanimous consent." This would require agreement from all lawmakers, something that may be impossible to achieve in the House. Both chambers had been officially scheduled to come back into session next week, but that timeline won't be met. On Monday, House Majority Leader Steny Hoyer, D-Md., officially postponed the date when the House would reconvene until May 4 at earliest. Mnuchin last week requested urgent congressional action to approve an additional $250 billion to supplement a $350 billion forgivable loan program for small businesses that is quickly being obligated. That program, run by the Small Business Administration, is called the "Paycheck Protection Program." But Democrats refused to approve the measure when Senate Majority Leader Mitch McConnell, R-Ky., sought to advance it on Thursday, insisting on changes to the small business program as well as at least $250 billion more for other priorities.

The Small Business Administration says that there have now been more than 800,000 loans approved, totaling more than $200 billion. But it's not clear how many small businesses have actually gotten any money. Banks and other lenders are the ones that to extend the taxpayer-backed loans, and they have complained of a cumbersome process. And even if all the companies received loans, 800,000 firms is just a small fraction of the 30 million small businesses in the United States.

An SBA spokesman, Christopher Hatch, said Monday that since lenders control the disbursal of funds, it is not possible to say precisely how much money has been distributed to small businesses. He said those figures might not start to be available until around June.

Some Democrats have questioned the figures SBA is putting out. On a conference call of House Democrats on Monday, Rep. Nydia Velazquez, D-N.Y., who chairs the House Small Business Committee, said she has had trouble getting actual data from Treasury, as opposed to anecdotal reports, according to two people on the call who spoke on condition of anonymity to describe it.

Nonetheless, Senate Republicans argue that the program needs to be re-upped immediately because once the initial $350 billion has been committed lenders will be locked out of applying for more loans.

McConnell's office provided a list of eight small businesses from around the country that say they have been approved for loans through the Paycheck Protection Program. At least five of them - including an espresso kiosk in Montana, an auto shop in Oklahoma, and an equipment manufacturer in Nebraska - have already received the loan money, according to interviews Monday.

The Paycheck Protection Program, principally authored by Sen. Marco Rubio, R-Fla., is supposed to provide loans up to $10 million that are forgivable if the businesses keep their workers on payroll and meet certain other conditions.

Prospects for resolving the congressional standoff are unclear as there appear to be few if any negotiations occurring between the two sides.

"Small businesses, hospitals, front-line workers and state and local governments across the country are struggling to keep up with this national crisis. They need more help from the federal government and they need it fast - our nurses, doctors and health-care workers need it as much as anyone else," Schumer and Pelosi said in their statement.

"Further changes must also be made to the SBA's assistance initiative, as many eligible small businesses continue to be excluded from the Paycheck Protection Program by big banks with significant lending capacity," they said. "Funding for Covid-19 SBA disaster loans and grants must be significantly increased to satisfy the hundreds of billions in oversubscribed demand."

Pelosi and Schumer had demanded an additional $150 billion for cities and states, $100 billion for hospitals and health-care systems and an additional 15 percent increase in benefits for food stamp recipients.

On the House Democratic conference call Monday, according to one of the people on the call, Pelosi told fellow lawmakers that, "We've said to them: let's negotiate. We all care about small businesses and want them to succeed. … Hopefully, we can come to some terms if they will negotiate."

A bipartisan group of governors including Maryland Gov. Larry Hogan, R, who chairs the National Governors Association, on Saturday asked Congress to approve $500 billion in aid for cash-strapped states that are struggling to deal with mounting costs and a loss in revenue triggered by the pandemic. On Monday, Hogan released a statement saying he'd spoken with Vice President Mike Pence to impress upon him the urgency of the funding, and "asked the administration to weigh in so that we can break this logjam in the Senate and get this done for the American people."

Trump said Monday that "We're certainly willing to look at" the requests for additional funding for states and hospitals, but that those and other priorities should wait for the next large coronavirus spending bill, after action on the Paycheck Protection Program specifically.

The Senate gaveled in and out of session Monday morning for a brief pro forma session, but there was no attempt on either side to advance legislation. The Senate's next pro forma is on Thursday - one day before White House adviser Larry Kudlow has said the Paycheck Protection Program will run out of money.

The announcement by House leadership delaying the date when they will reconvene came after multiple members expressed reluctance about returning to Washington.

“I’ll tell you, I have no interest in going back now. How do you get there? Train? Plane? Last time I got there, I drove for about five hours. People across the country are not going to take a chance,” House Appropriations Chairwoman Nita Lowey, D-N.Y., said Monday on C-SPAN’s “Washington Journal.” “Unless it’s safe, I think we are better off doing our work, as we have been doing, passing bills by unanimous consent. And, hopefully, there is a bipartisan will to really focus on what we need and leave partisan politics aside.”