The Senate failed millions of small businesses Thursday by ending its week without passing an extension to the number of weeks that PPP loan recipients have to use their funds.
Why it matters: People may lose their jobs while politicians dither.
The state of play: At issue is the so-called "covered period," during which time PPP loan recipients must spend the funds in order to have them forgiven. It currently stands at eight weeks, but a bipartisan proposal would double it to 16 weeks.
- The basic idea is to make the money last longer, particularly for small businesses that are opening slower.
- This added flexibility could help some loan recipients keep people on payroll for longer.
- The proposal also would have extended the PPP loan application period from the end of June to the end of December and allowed recipients to use funds to buy both personal protective equipment for employees and make safety-related changes to their properties.
There was hope yesterday that the Senate would get this done via a unanimous consent vote. But that didn't happen. Senators say the language is still being negotiated.
- Again, the bill is bipartisan. And its most vocal Senate proponent is Sen. Marco Rubio (R-Fla.). But Axios' Alayna Treene reports that there is some GOP worry that extending the covered period could incentivize businesses to delay their reopenings.
What's next: It is possible, albeit unlikely, that the Senate could hold a pro forma session today and get the extension passed.
- Lawmakers from both parties say a more likely scenario is attempted passage during a pro forma session next week.
- Either way, there will need to be bicameral negotiations, as the House version extends to 24 weeks (which is the number that restauranteurs asked for during a recent White House roundtable).
The bottom line: For some the earliest loan recipients, the eight-week period begins expiring in June. Later loan recipients are in planning mode, and are being hamstrung by uncertainty. In both cases, paycheck protection hangs in the balance.