Democrats try to force McConnell’s hand on coronavirus aid

Congressional Democratic leaders are trying to box out Senate Majority Leader Mitch McConnell (R-Ky.) by negotiating a deal with Treasury Secretary Steven Mnuchin and President Trump to provide $251 billion in new funding for small businesses.

Senate Minority Leader Charles Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) calculate that Trump will be eager for a deal when funding for the Paycheck Protection Program (PPP), a popular small-business lending program, is projected to expire Thursday, when another wave of unemployment claims become public.

They have largely worked with Mnuchin instead of McConnell, betting that if Trump signs on to a $500 billion deal to extend small-business lending, send funds to hospitals and rescue cash-strapped states, McConnell and other GOP lawmakers will fall in line.

While congressional Republican staff have reached out to Democrats, Schumer and Pelosi have preferred to work with Mnuchin, viewing him as a more sympathetic negotiator.

Sen. Ben Cardin (Md.), the top-ranking Democrat on the Small Business Committee, said Schumer and Mnuchin have “a pretty good relationship.”

Senate Republican aides expect a deal to emerge this week even though McConnell hasn’t signed off on anything and passing legislation during a pro forma session scheduled for Thursday would require consent from every senator. That is a very tall order.

“There’s already the uncertainty about this program and it’s discouraging people from applying. The closer we let it go to banks not accepting applications the worse it gets. There’s a sense of urgency. It’s just a matter of what’s going to be demanded to get it across the finish line,” said a GOP aide.

If Trump endorses the deal, however, it would be tough for any Republican to stand in the way, especially since the add-ons requested by Democrats are $100 billion more for hospitals, $150 billion more for state and local governments and a 15 percent increase in the Supplemental Nutrition Assistance Program.

Ford O’Connell, a Republican strategist, said Democrats “think they have leverage on the president because they’re going to say he’s in charge of the economy.”

“At the same time, if you’re Trump and you bow to all of their demands, their demands are only going to get bigger,” he added. “The White House would like to get it resolved as soon as possible.”

“The White House doesn’t want to wait until May. They want to get a good deal done,” he said. “The Democrats feel that they have so much leverage that they have the Republicans over a barrel and they’re waiting for the Republicans to blink.”

Some GOP staffers warn that Schumer and Pelosi may be forgetting that Mnuchin doesn’t speak for Republican senators and can’t guarantee that they will be on board with any deal he and the president agree to.

McConnell said last week that he would favor providing more money for hospitals and health care providers “down the line.” But talk of adding hospital funding to the $251 billion for the Small Business Administration will set off a battle among senators who want to tweak the formula and get special benefits for their home states.

That’s the reason McConnell wants to keep the funding boost for the small-business lending program “clean.”

Two stalwart fiscal conservatives who have a history of bucking the GOP leadership, Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah), were not present when the Senate voted 96-0 last month to pass the $2.2 trillion CARES Act, which included $349 billion for the small-business lending program.

Both lawmakers were in quarantine, Paul because he was diagnosed with coronavirus and Lee out of precaution.

Senate GOP aides said they didn’t know for sure how Paul or Lee would react if asked to give consent to allow an interim coronavirus relief package to pass during Thursday’s pro forma session. 

Pressure on Trump and Congress to act will mount Thursday morning when the Department of Labor is expected to announce millions of new unemployment claims. More than 16 million Americans have filed first-time unemployment claims in the past three weeks.

A survey published by Main Street America on Tuesday projected that 3½ million businesses may close permanently over the next two months and 7½ million businesses may close over the next five months.

“Every week [the impasse goes on] is a week businesses don’t have cash flow and more uncertainty gets injected,” the GOP aide said. “There’s nothing like a deadline to make things move fast.”

National Economic Council Director Larry Kudlow is warning that the PPP is due to run out of money as soon as Thursday.

“At the present run-rate, we’re going to be out of money,” Kudlow told Fox Business Network.

The Small Business Administration’s Economic Injury Disaster Loan program, a direct lending apparatus distinct from the PPP, is also out of money.

The pressure to refund the disaster loan program is made more acute by the severe storms that tore through Southern states over Easter weekend, leaving 30 people dead and 1.3 million without power. The area must be officially declared a disaster zone before the program can kick in, however.

Trump on Tuesday sought to apply some political heat on Schumer and Pelosi, tweeting: “The Democrats don’t want to approve more money for our great workers under the incredibly successful ‘Paycheck’ plan. Replenish Account Now!”

If Senate Republicans object to passing an interim package in the ballpark of $500 billion, then small businesses may have to wait until the second week of May to see a resumption of loan activity through the PPP.

McConnell announced Tuesday the full Senate is not expected to reconvene in Washington before May 4.

“All members will receive at least 24 hours’ notice if this changes. This bipartisan decision reflects consultation with Leader Schumer and my colleagues in Senate leadership,” he said.

If a deal passes the Senate on Thursday, then its next stop is the House, where it would be a tough task to get all 429 members to sign off.

House leaders have also said they do not plan to reconvene the chamber before May 4, which means legislation would have to pass by voice vote as the CARES Act did on March 27. 

Rep. Thomas Massie (R-Ky.), a conservative libertarian who is facing a primary challenge, says he again will try to force the House to hold a formal roll-call vote on the next coronavirus relief package.

Last month, Trump stated Massie should be thrown out of the Republican Party as he vowed to delay the CARES Act. Massie’s threats caused some unhappy House members to travel back to the nation’s capital.

The presiding Democrat in the chair, Rep. Anthony Brown (D-Md.), overruled Massie’s objection by ruling that a quorum was present and letting the package pass by voice vote.