USA

Senate fails to pass House-passed Paycheck Protection Program reform bill

Senate Democratic leader Chuck Schumer of New York asked for unanimous consent to pass the legislation making changes to the program, but GOP Sen. Ron Johnson of Wisconsin objected, blocking approval.

"I'm not disagreeing with the fact that we have to do something. I want to do something as well. I just want to make sure that if we do put more money into this thing it's not going to be flowing to businesses that don't need it," Johnson said.

He added, "We've been working in good faith with the sponsors of the House bill, with Republican leadership. I reached out to Democrat leaders saying we're very close. I think we'll probably be able to pass the House bill with assurances, by unanimous consent, just not at this moment."

The bill, which passed the House last week, gives business owners more flexibility and time to use loan money and still get it forgiven as part of the Paycheck Protection Program, set up to help struggling small businesses with emergency loans during the pandemic.

"We can't wait any longer. Businesses are really suffering for lack of these changes," Schumer said on the Senate floor, adding, "These changes are universally agreed to as good ones and we shouldn't let someone who wants a small change say let's stop it."

"We must get this done. Businesses are going under every day," the Senate minority leader warned.

The vote in the House approving the legislation was nearly unanimous at 417-1. Republican Rep. Thomas Massie of Kentucky was the sole member to vote against the bill.

The legislation -- titled the Paycheck Protection Program Flexibility Act -- was introduced by Republican Rep. Chip Roy of Texas and Democratic Rep. Dean Phillips of Minnesota. It is intended to make loans more accessible under the program by making its terms of use more flexible.

The legislation would give small businesses more time to use emergency loans under the program by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks.

The bill would also give small businesses more flexibility by changing the so-called 75/25 rule, which requires recipients of funds under the program to use three-quarters of the money for payroll costs and to limit other costs to no more than 25% in order to be eligible for loan forgiveness. The new ratio would be at least 60% on payroll and no more than 40% on other costs.

The Paycheck Protection Program was set up as part of an earlier relief plan known as the CARES Act.

The program's rollout has been hampered by technical issues and glitches, but small business owners have clamored for the aid and the program's funding has already been replenished once by lawmakers after it ran dry.

The push for bipartisan fixes to the program comes as business owners have complained that the terms of use are overly restrictive and do not offer enough flexibility amid the crisis.

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