Coronavirus: US may need more help from Congress to fight pandemic, says Trump adviser Kudlow

'This has been an extremely popular and effective program, no question about it,' Trump economic aide says of small business lending programme

Griffin Connolly
Sunday 03 May 2020 17:06
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Donald Trump's top economic adviser has signalled that Congress and the White House may need to strike another deal soon to help small businesses keep people on their payrolls.

“There may well be additional legislation. There's kind of a pause period right now,” director of the National Economic Council Larry Kudlow said in an interview with CNN on Sunday.

Mr Kudlow echoed congressional Republicans' wait-and-see approach to more legislation, saying negotiators should revisit the idea of another bill in "a couple of weeks".

The federal government has passed five bills totalling more than $2.7trn in response to the coronavirus pandemic since early March. That's roughly 13 per cent of the country's GDP.

In the two most recent bills, the government has spent $660bn to help small businesses retain employees through the Treasury Department's so-called Paycheck Protection Programme (PPP), which lends money to businesses through banks and other financial institutions that don't need to pay back the loans if the owners use a certain amount of it on payroll.

Congress replenished PPP with $310bn last month after it ran out of its first tranche of $350bn within days.

The Small Business Administration indicated in a report over the weekend that the program is once again running out of money quickly and has just $135bn left.

"This has been an extremely popular and effective program, no question about it," Mr Kudlow said. "Keeping folks on the payroll is so important," he said, signalling the White House could be interested in passing another interim relief bill that focuses on PPP funding.

"You know we waited a little bit too long I thought when the last tranche ran out. Let's not make the same mistake again," Mr Kudlow said.

The possibility of Congress passing a narrow bill is remote, with Democrats harbouring broader ambitions for the next coronavirus response legislation.

Speaker Nancy Pelosi has dismissed the idea of narrow legislation that only provides money for the small business aid, insisting instead that Congress address a host of medical and economic issues such as more money for states and local governments, more direct cash relief to Americans, and a robust investment in US infrastructure that would provide universal broadband internet access.

"No. The next bill will be CARES 2," Ms Pelosi said, referring to Democrats' proposal of a follow-up deal to the $2.2trn economic stimulus package passed in March known as the CARES Act.

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