House approves $484bn in new Covid-19 relief funds

Congress has passed a $484bn economic relief package for small businesses, hospitals and coronavirus testing, sending the US government’s fourth stimulus bill since the outbreak to Donald Trump for his signature. 

The House of Representatives voted 388-5 for the measure, with overwhelming support from both parties. On Tuesday the bill passed the Senate by a voice vote, a move that allowed only a small number of senators to be present during voting.

The bill allocates an additional $320bn for the Paycheck Protection Program, a rescue fund for small businesses, after the scheme’s initial $350bn in funding ran out in record time. The programme was initially approved as part of an earlier $2.2tn economic relief package

The legislation will also allocate $75bn for hospitals and $25bn for additional coronavirus testing.

The new funding for PPP comes after huge demand for the programme from small businesses with fewer than 500 employees, which, through the scheme, are able to get loans to keep their staff on payroll for eight weeks, even as businesses remain shut or under pressure. The loans carry interest rates of just 1 per cent and can be forgiven if companies do not fire workers. 

While the bill ultimately passed with overwhelming bipartisan support, it faced serious headwinds in Congress, as Republicans and Democrats tussled over what measures the bill should include, and how much additional funding should be appropriated for the programme in its second instalment.

Though Democratic lawmakers were unsuccessful in their attempt to include funding for states and local governments, they did succeed in expanding the bill to include additional money for hospitals — an objective Republicans said they also shared.

Mr Trump has already voiced his support for the legislation and said he expected to sign it on Thursday night, suggesting the Small Business Administration will resume approving more PPP loans within a matter of days.

“I’ll be signing it probably tonight,” Mr Trump said at his daily news conference on Thursday, adding he was in talks with congressional leaders over whether to include aid to states and local governments in the next round of stimulus legislation. 

Funding for state governments has become an increasingly partisan issue on Capitol Hill. Mitch McConnell, the Republican leader in the Senate, has accused Democratic governors of financial mismanagement and suggested that Congress should forego additional “blue-state bailouts” in favour of allowing states to declare bankruptcy. His comments have been met with fierce bipartisan pushback from state governors. 

“It is interesting that the states that are in trouble do happen to be blue,” Mr Trump said on Thursday. “If you look around, the states that happen to have the problem are Democrat.”

US Treasury secretary Steven Mnuchin praised Congress’s passage of the bill. 

“The PPP, implemented by our partners at the Small Business Administration, has provided assistance to more than 1m small businesses with fewer than 10 workers,” he said in a statement. “The programme is already helping more than 30m Americans, and with this additional funding, we expect tens of millions more will be able to receive critical relief.”

Editor’s note

The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here.

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