The Senate blocked an extension of the Paycheck Protection Program as negotiations for a larger relief package continues between Democrats and the White House. The legislation was shot down 40 to 58 on October 20 as several lawmakers broke ranks and voted with the opposite party.

The measure, backed by Senate Majority Leader Mitch McConnell, R-Ky., would add $258 billion to the small business loan program and allow qualifying companies a second round of loans. The procedural vote on the amendment to S. 178 — a bill used as a vehicle for the process — was introduced by the architects of the small business loan program, Sens. Marco Rubio, R-Fla., and Susan M. Collins, R-Maine.

Sens. Doug Jones, D-Ala., and Gary C. Peters, D-Mich., both facing reelection in November, voted to extend the program. The National Federation of Independent Business (NFIB), a small business advocacy organization, asked lawmakers to back the measure. “We urge Members of Congress to set aside their disagreements on unrelated policies and pass this legislation to help small businesses immediately,” NFIB Vice President for Government Relations Kevin Kuhlman said in a statement.

Democrats have been holding out for a larger relief package aimed at helping businesses, states, and taxpayers. Senate Minority Leader Charles E. Schumer, D-N.Y., called the vote nothing more than a stunt after Republicans failed to act on the House-passed Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) for more than four months.

The PPP provided loans to businesses that can be forgiven on a tax-free basis if a specific portion of the proceeds is spent on payroll. The program has been popular in both parties and has had the support of key lawmakers in the House and Senate. Both sides have mostly agreed that the program requires more funding and that small businesses should be able to take out another loan if they qualify.

There have been some disagreements about whether a business should have a 25 percent drop in quarterly year-to-year revenue or a 35 percent drop to qualify for the PPP. But the language was drawn up by Rubio and Collins largely mirrors changes that have been adopted by House Democrats in an updated HEROES Act (H.R. 925) passed October 1.

Pelosi-Mnuchin Talks

Senate Republicans are expected to offer another relief measure on October 21 to inject $500 billion into the economy and provide liability protections for businesses. The measure is likely to mirror one that received a vote in September, but it won’t get the support of Democrats as they wait for the larger package being negotiated by House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin.

Pelosi and Mnuchin have clashed on a range of issues, including expanding the earned income tax credit and the child tax credit. Pelosi has on several occasions said it is important that relief reaches those who are most disadvantaged.

There is little optimism on Capitol Hill that the two sides can strike a deal before the presidential election, but even if they can reach a figure that has the backing of the White House and Democrats, Senate Republicans have distanced themselves from a large relief package.McConnell said he would put a bipartisan bill on the floor for a vote, but it would require at least 13 Republicans to vote with Democrats for the relief measure to pass.

Senate Republican Whip and Finance Committee member John Thune of South Dakota said that it would be hard to find 13 Republicans who would back a large bill. President Trump, however, urged Republicans to “go big” and said he would have to speak with Thune about his comments.

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