A $349 billion federal stimulus package is exhausted and the Democratic Party is opposing further funding for the highly popular program, the president has said.
President Donald Trump is accusing Democrats of failing to support an extension of the U.S. Small Business Administration’s Paycheck Protection Program, which was quickly overwhelmed with applications from small businesses that want to keep paying employees during the Chinese Communist Party (CCP) Virus shutdown.
“Democrats are blocking additional funding for the popular Paycheck Protection Program (PPP),” he said on Twitter.
The president believes the Democratic Party’s partisan opposition to continue funding the program will prevent struggling employers from applying for the PPP and using the money to rehire millions of Americans.
“They are killing American small businesses,” he said. “Stop playing politics Dems, support refilling PPP now—it is out of funds.”
PPP loans are advertised to offer businesses that employ 500 or less workers a low, 1 percent comparison rate with no repayment required for the first six months of interest. The principal and interest will be forgiven on the condition employers do not stand down or fire employees in the next two months, and the money is applied to payroll, mortgage interest, rent, and utility expenses.
“Payroll costs are capped at $100,000 on an annualized basis for each employee,” a U.S. Department of Treasury fact sheet said. “Due to likely high subscription, it is anticipated that not more than 25 percent of the forgiven amount may be for non-payroll costs. Loan payments will be deferred for six months.”
More than 1.6 million businesses have applied to borrow a combined $339 billion from a total of over 4,900 financial institutions, according to the CBS Evening News.
Former Special United States Treasury Department Inspector General Neil Barofsky suggested some Democrats could be divided over the PPP’s provision for banks to prioritize existing customers, which have larger credit lines, over new clients.
“I do not think it is wrong that the big companies are getting the money and saving the jobs, what is wrong is that it is not on the same level playing field,” he told CBS.
Barofsky, who managed the Troubled Assets Relief Program back in the 2008 global financial crisis, is concerned existing bank clients might receive PPP funds before any new customers are even considered.
“Frankly, until all of the established bank customers get their loans they[small businesses] might not even be in the line,” he said.