Schumer and Mnuchin inch closer to a deal on small business lending, increased aid for hospitals and states

Senate Democratic Leader Charles Schumer (N.Y.) and Treasury Secretary Steven Mnuchin appear to be inching closer to a deal to provide $250 billion in additional funding to a popular small-business lending program, which could run out of money as soon as Thursday, and tens of billions of dollars in more federal aid to hospitals and state budgets.

A spokesman for Schumer announced Wednesday morning that the Democratic leader and Mnuchin had another conversation earlier in the day and that “Democratic staff from both chambers will be meeting with Treasury” Department officials later in the day.

Some Senate Republican aides are expecting a deal between Schumer and Mnuchin by the time the Senate meets in a scheduled pro forma session on Thursday.

National Economic Council Director Larry Kudlow warned on Tuesday that the Small Business Administration’s (SBA) Paycheck Protection Program, a popular lending program designed to keep workers on payroll, could run out of money as soon as Thursday.

Senate Democrats are also expecting a deal soon.

Sen. Doug Jones (D-Ala.) told reporters on a conference call Tuesday: “I understand that a fair amount of progress has been made,” referring to discussions between Schumer and Mnuchin.

“We may be seeing some packages pretty soon,” he said.

Senate Republicans caution, however, that Mnuchin does not speak for the entire Senate GOP conference and that all 53 Republican senators would have to sign off on any deal for it to pass by unanimous consent during Thursday’s pro forma session.

Schumer and Speaker Nancy Pelosi (D-Calif.) are betting that Republicans will fall into line if President Trump endorses a deal between Democratic leaders and Mnuchin.

Trump last month blasted conservative Rep. Thomas Massie (R-Ky.) as a “third rate Grandstander” when he attempted to force a House roll call vote on the $2.2 trillion CARES Act, which passed 96-0 in the Senate.

Democrats want to pair the $250 billion in additional funding for the SBA program with at least $250 billion for hospitals and state and local budgets.

Schumer and Pelosi have called for an additional $100 billion for hospitals, $150 billion for state and local governments and a 15 percent funding increase for the Supplemental Nutrition Assistance Program for low-income families.

Democrats also want to set aside $60 billion of the small business funding program for women-, minority- and veteran-owned businesses in underserved urban, rural and tribal communities.

Many businesses in underserved and lower-income communities have had difficulty obtaining forgivable loans backed by the federal government because of the lack of existing relationships with community banks and credit unions.

Updated at 11:33 a.m.