The US Senate has unanimously approved more funding for the Paycheck Protection Program (PPP) created under the original CARES Act that was tapped dry several days ago. The approval by the Senate now queues up a vote in the US House of Representatives later this week.
According to Politico, the current language totals $484 billion. The legislation includes an additional $321 billion for the PPP part of which, $60 billion, was said to be set aside for underbanked businesses. Originally, Congress had allocated $349 billion to the PPP but the popular program that provides 2.5x times monthly payroll of funding for SMEs quickly ran out of money. The program effectively turns the funding into a grant if a business maintains payroll during the time period. The thesis is based on the fact that covering payroll for businesses now is far less expensive than a massive boost to the unemployment level.
There is an additional $60 billion in loans and grants for disaster assistance as well as $75 billion for hospitals plus $25 billion for Coronavirus testing.
Of course, any funding is a temporary bandaid as the economy has screeched to halt due to social distancing and widespread lockdowns. If the economy does not open up soon, it is questionable if any amount of funding will cure the economic collapse.
And then there remains the question as to who will inevitably pay for the emergency funding. While consensus exists that these policy moves are desperately needed the federal deficit is poised to balloon to epic proportions.
The House is expected to vote this coming Thursday with the bill soon beings signed into law by the President.
