After weeks of tense negotiations, hand-wringing, and haggling, Congress finally agreed on a new Covid-19 relief bill. Then, on Tuesday evening--with many expecting President Trump to sign the $900 billion package into law--he tweeted out a video expressing his dismay with a number of elements in the bill, threatening to throttle the deal entirely.
His key issue is with the amount of money going to individuals. "I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000 or $4,000 for a couple," he said. He was referring to the economic impact payments, which would put $600 in the hands of each American earning less than $75,000 in 2019 (or under $150,000 if married and filing jointly) and their kids. He went on to suggest that the bill contained many "wasteful and unnecessary" items and implored Congress to revise and resubmit the legislation.
His criticism, of course, puts the bill's chances in doubt--and that could pose devastating consequences for small businesses struggling amid soaring infection rates and government-imposed restrictions.
The bill that was passed contains a number of inducements for small businesses. Utilizing the $138 billion left over from the Paycheck Protection Program under the Cares Act, small businesses would have some $325 billion in new aid. It would re-open the PPP and expand eligible expenses for forgiveness. There are provisions to allow a second draw for those businesses that have already received a loan, restore deductibility of PPP-forgiven expenses, target loans for the smallest of businesses, and provide a simplified forgiveness process for loans of less than $150,000.
If Trump vetoes the bill, Congress could be forced to resubmit the legislation with his requested changes--a prospect that could push passage out days or even weeks. Congress could also look to override the president's veto. Lawmakers would need two-thirds of both chambers to do so--which they have, but overriding a veto could enrage Trump's base, which would be dicey for Republicans. Still, if they do, they could just add additional impact payments in subsequent legislation, which Biden favors.Whatever they do, they'll all need to act before a continuing resolution passed by Congress to keep the government funded expires on Monday, December 28. If they don't, the government will shut down.
Trump's theatrics will not likely go down well with the struggling business community. "With so many American businesses hanging on by a thread, it's outrageous that there is yet another maneuver in Washington, D.C., that threatens to delay relief," says Ami Kassar, the founder and CEO of MultiFunding, a small-business loan adviser based in Ambler, Pennsylvania. "I encourage President Trump and any other politician to look into the eyes of a business owner whose life long dream has self destructed in front of their eyes."
Indeed, the timing on this couldn't be worse. More than 70 percent of small businesses recently surveyed by the U.S. Chamber of Commerce said they need more government aid to succeed in 2021. Half of those polled said that under current conditions they could continue operations for a year or less before shutting down.
It's also possible that the increasingly mercurial Trump could also just change his mind, as he has in the past.