US Congress Nears Agreement on $460 Billion Additional Stimulus Package to Support Small Businesses and More

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The U.S. Congress is preparing additional support measures exceeding $400 billion (approximately 486.8 trillion KRW) to assist small and medium-sized enterprises (SMEs) struggling due to the COVID-19 pandemic. The U.S. government created a $350 billion emergency loan program for SMEs at the end of last month, but the funds ran out in less than two weeks, prompting additional funding. The Trump administration and the Democratic Party reached an agreement earlier this week and plan to pass the budget within days.

According to the Washington Post (WP) and others on the 19th (local time), the Trump administration and the Democrats are discussing an additional stimulus package of up to $460 billion. Of this, $300 billion is expected to be allocated to the Paycheck Protection Program (PPP), an emergency loan program for SMEs, with a separate $60 billion 'Economic Injury Disaster Loan (EIDL)' item included. Budgets of $75 billion and $25 billion are also expected to be allocated for hospital funding and COVID-19 testing support, respectively, as requested by the Democrats.

President Trump said at the COVID-19 task force (TF) briefing that day, "An agreement is almost reached," and "It looks like the agreement will be announced on the 20th." Senate Democratic Leader Chuck Schumer and House Speaker Nancy Pelosi also expressed hope that negotiations would conclude as early as that night, and House Democratic Leader Steny Hoyer informed party members to prepare to process the bill in the House on the morning of the 22nd. Treasury Secretary Steven Mnuchin hoped for Senate approval on the 20th and House approval on the 21st.

The Trump administration and the Democrats are accelerating negotiations because the immediate cash demand of SMEs is increasing. On the 27th of last month, the U.S. Congress passed a $2.2 trillion COVID-19 stimulus package, allocating $350 billion to the PPP for SME support. The PPP is a program that provides unsecured loans of up to $10 million over two years to small businesses with fewer than 500 employees to pay their employees' wages. The funds were exhausted by the 16th, less than two weeks after applications began. The White House announced that 1.6 million SMEs received loans through this program.

The Trump administration and the Democrats have been negotiating additional support measures for more than ten days. President Trump and the Republicans requested an additional $250 billion from Congress on the 8th, while the Democrats expanded the support scale to $500 billion, including support for state and local governments, hospital funding, and food assistance for the poor, in addition to SME support.

However, foreign media reported that since the agreement between the two sides is not yet finalized, the timing and content of the agreement may change. WP mentioned that "the local government support measures additionally requested by the Democrats seem to have been excluded from the agreement, but talks are still ongoing, and Leader Schumer said some issues are still under discussion," indicating that the agreement is not yet complete. Secretary Mnuchin and Senate Republican Leader Mitch McConnell clearly stated that support for state and local governments and food assistance for the poor will not be included. Some suggest that local government support measures may be prepared as a separate bill.

As the stimulus funds are being depleted rapidly, protests demanding the reopening of economic activities are spreading in the U.S. Protests against social distancing and the closure of businesses and stores are being held mainly by Republicans and far-right groups. President Trump was embroiled in controversy for encouraging protests with tweets on the 17th targeting Minnesota, Michigan, and Virginia, states governed by Democrats, urging to "liberate" them.

Vice President Mike Pence appeared on Fox News that day and said, "What we are seeing is that governors hope to find responsible and safe ways to reopen the economy," and evaluated it as showing the desire of Americans to return to work. He defended President Trump, saying, "Americans know that no one wants to normalize the country more than President Trump."

This content was produced with the assistance of AI translation services.