WASHINGTON (AP) — The House gave sweeping bipartisan approval Thursday to legislation to modify a new “paycheck protection” program for businesses that have suffered COVID-related losses, giving them more flexibility to use federal subsidies for other costs and extending the lifespan of the program as the economy continues to struggle.
The compromise measure passed by a 417-1 vote and now heads to the Senate, where passage is likely next week. President Donald Trump is expected to sign it into law, though talks remain stalled on a much bigger measure to inject more than $3 trillion into the tumbling economy.
The changes to the program come as many smaller businesses such as restaurants struggle to survive coronavirus -related ruptures to the economy as states permit shuttered businesses to reopen.
As enacted in late March, the Paycheck Protection Program required businesses to spend their loan money within an eight-week window to get the loans forgiven. It also required that three-fourths of the money be spent on payroll as a means of keeping workers linked to their jobs. But small businesses say there are several fixes needed to the program.
For instance, the eight-week window created a dilemma for businesses, in particular restaurants that under the law were required to rehire all their laid-off workers even though they were either closed or limited to takeout and delivery. Many business owners feared that they would use up their loan money before being allowed to reopen, and then have to lay off employees again because their business wouldn’t bring in enough revenue to keep paying everyone.
The new measure gives business owners 24 weeks to spend the federal aid — instead of eight as originally designed — and extends the program through the end of the year while also lengthening the the maturity date and deferral period of the loans.
The legislation has the backing of GOP-friendly business groups like the National Federation of Independent Business, which was critical of delays by Democrats of legislation earlier this month to replenish the program’s funding. Congress has provided about $660 billion to the program — roughly the size of the annual defense budget — helping 4.4 million businesses so far.
Thursday’s vote followed negotiations over the past week and should pave the way for the Senate to pass the measure next week and deliver it to Trump. Kentucky Republican Thomas Massie was the sole “nay” vote.
“We also wanted to pass something that wouldn’t just pass this chamber but also the Senate and find, perhaps, a signature in the White House,” said freshman Rep. Dean Phillips, D-Minn., who played a role in talks on the measure.
House lawmakers aren’t expected to return to Washington next week. The Senate is returning to process additional Trump administration nominations and perhaps turn to a bipartisan lands bill.