U.S. Sens. Chris Van Hollen (D-Md.) and Benjamin L. Cardin (D-Md.) are calling for bipartisan cooperation as lawmakers begin to craft the next COVID-19 relief package, citing dwindling funds available for small businesses accounted for in the CARES Act.
During a news conference held over the phone Friday, both senators said many small businesses have been unable to access allocated relief funding in the package Congress passed in late March.
“It is clear the CARES Act, which was very comprehensive and very strong as far as its resources, was not the last word and that we’re going to need to do more,” Cardin said, noting that the unanimous vote to pass the bill was one of Congress’ “proudest moments.”
“That’s what we need to do again,” he said.
The Small Business Administration has the ability to give out $7.3 billion in loans through the Disaster Relief Loans fund.
But Cardin, the top Democrat on the Senate Small Business Committee, said that by Wednesday evening 3.8 billion businesses had applied for over $370 billion in those loans — and that the average loan request was around $200,000.
Cardin said the Small Business Administration would have to reduce each loan to just $15,000 “because that’s what we have there today.”
He added that an additional $50 billion could meet the demands.
Regarding the Disaster Relief Grants afforded by the package, Cardin said by Wednesday afternoon the Small Business Administration had seen 3.5 million applications requesting $11 billion in total.
The bill only allotted $10 billion for these grants.
“When you’re looking at a package of immediate aid for small businesses, you’ve got to fund the emergency grant and loan programs and they didn’t do that,” he asserted.
The senators also suggested that Maryland banks are creating hurdles not accounted for in the CARES Act’s language to access the funds through the Paycheck Protection Program, a loan initiative that businesses can apply for to keep paying their employees through the balance of the public health crisis.
Both lawmakers described banks requiring loan seekers to have their company’s credit card or previous loan approval.
Cardin called that practice “redlining.” Van Hollen singled out Bank of America and Wells Fargo, blaming “bad guidelines” on behalf of the Department of Treasury and the financial institutions’ self-issued regulations as the problem.
“The whole idea behind this program was to eliminate the risk to the banks because they were the conduits and we want to get the money out as quickly as possible where it was needed,” he said. “Unfortunately, when Senator [Mitch] McConnell blocked our proposal, he blocked our … reforms that would make sure that the money goes where it’s really needed at the community level.”
The Senate convened Thursday to negotiate measures in the next relief package. Senate Majority Leader Mitch McConnell (R-Ky.) sought to increase the Paycheck Protection Program by $250 billion to keep the program running.
Cardin said that as of Wednesday afternoon, $100 billion has been committed to the Paycheck Protection Program, $2 billion of which is slated to go to Maryland.
Van Hollen said that when McConnell proposed to increase the funds for the Paycheck Protection Program by $250 billion to prevent its exhaustion, Cardin brought up that funds in the Disaster Relief Loan program are nearer to circling the drain.
Van Hollen said Senate Democrats presented an alternative to McConnell that still accounted for his $250 million increase to the Paycheck Protection Program, but also increased funding for the Disaster Relief Loan program and provided reforms that would ease the access of small businesses to these benefits.
Cardin said that Van Hollen requested part of the monies from the Paycheck Protection Program be allocated for community banks and mission lenders so that under-served individuals can access some of the funding.
After seeking a unanimous consent vote, Van Hollen said that McConnell “shot down” their efforts. Cardin called McConnell’s actions “disappointing” and “intentional.”
“The United States Congress, … even when there have been deep political divisions in the country, have been able to come together on three occasions to address the Coronavirus emergency and the COVID-19 emergency,” Van Hollen said. “And that’s the way we should continue to do business — on a bipartisan basis.”