WASHINGTON—A small-business loan program designed to back workers’ paychecks has exhausted most of its funding, ramping up pressure on congressional Democrats and Republicans aligned with the White House to reach a deal on the next round of economic aid amid the coronavirus crisis.
Negotiations between Congress and the White House over replenishing the small-business program resumed Wednesday.
The Paycheck Protection Program was on track to exhaust most of its initial allocation of $350 billion in the early morning hours Thursday, with the Small Business Administration saying it had approved more than 1.5 million loans valued at more than $324 billion as of late Wednesday and loans were continuing to be processed.
The fund needs about $10 billion to cover processing and fees, Senate Small Business Committee Chairman Marco Rubio (R., Fla.) said on Twitter.
“The fund being exhausted clearly puts pressure on Congress to act and come to a reasonable conclusion,” said Rep. Patrick McHenry of North Carolina, the top Republican on the House Financial Services Committee. “Every day that passes that we don’t fund this program, more pain is felt by small-business folks and their employees.”
Both Democrats and Republicans want to add $250 billion to the small-business aid program, but have been sparring for days over whether to add restrictions to the funds. Democrats want to expand access to the loans as well as include more money for hospitals, food assistance and state and local governments. Republicans, meanwhile, said they want to keep the bill focused on increasing small-business aid and defer other funding debates until the next, broader legislation is crafted.
Senate Minority Leader Chuck Schumer (D., N.Y.) told reporters he had spoken with Treasury Secretary Steven Mnuchin on Wednesday morning. Aides to Mr. Schumer and House Speaker Nancy Pelosi (D., Calif.) spoke by conference call with Mr. Mnuchin and Treasury Department staff later Wednesday and agreed to continue their discussions Thursday, according to senior Democratic aides.
“We see no reason why we can’t come to an agreement,” Mr. Schumer said. “We Democrats believe we need more money for small businesses, but we need it to go to the people who are underbanked and underserved.”
Both parties have accused one another of blocking an infusion of aid into the PPP fund. In comments late Wednesday, President Trump reiterated that he wants Congress to focus on passing the $250 billion in funding before moving on to other spending.
The discussions were the first signs of progress this week, but it remains uncertain whether congressional leaders and President Trump will be able to reach an agreement by week’s end. Both chambers are scheduled to hold brief sessions later this week.
“I am convinced we could sign off as early as tomorrow on an agreement if we just sit down and work,” said Sen. Ben Cardin (D., Md.).
Mr. Cardin last week introduced a measure that would provide an additional $65 billion for separate disaster loans and grants, dubbed the Economic Injury Disaster Loan program, in addition to increased funding for PPP. The EIDL program was intended to quickly deliver to applicants grants of up to $10,000, but overwhelming demand has caused delays.