WASHINGTON – 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 leaders face a choice between sending the House measure directly to President Donald Trump or trying to pass a companion measure that could be more difficult to advance.
Trump is expected to sign the paycheck protection bill into law, though talks remain stalled on a much bigger measure to inject more than $3 trillion into the tumbling economy.
A spokesman for Minority Leader Chuck Schumer, D-N.Y., said he supports the House measure and will seek a Senate vote next week, but top GOP sponsor Sen. Marco Rubio said the House measure contains technical errors that could make it more difficult for businesses to get their operating loans forgiven.
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.