The next COVID-19 relief package appears likely to increase funding for the Paycheck Protection Program (PPP), as Senate Republicans continue to haggle over what to include.
“We’ll need more money; $130 [billion] won’t be enough,” Sen. Marco Rubio, R-Fla., told Tax Notes July 22.
Rubio was referring to the money left over from the first round of small business loans, provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). Rubio didn't say how much might be added to the renewed program, but said that the leftover funds would make a good starting point.
Lawmakers in both parties are in general agreement that the PPP should be extended beyond its August 8 expiration date. Rubio said lawmakers would be narrowly tailoring the program to help smaller businesses deal with the economic effects of the pandemic. He said some of his colleagues are pushing hard to include the Small Business Expense Protection Act (S. 3612) in the relief package, which would allow companies to write off PPP-related costs.
“We are at a stage now where, frankly, people are being hurt so deeply and so broadly that we should be looking to provide as much assistance anywhere we can,” Rubio said.
The IRS issued Notice 2020-32, 2020-21 IRB 837, in late April, preventing PPP loan recipients from deducting some expenses. Trade groups have been lobbying Congress for months to pass a fix and overturn the IRS notice.
Rubio said it was the lawmakers’ intent for companies to be able to deduct PPP-related business expenses, but not everyone agrees with his interpretation. Some Republican lawmakers have blocked efforts by the bill’s sponsor, Senate Finance Committee member John Cornyn, R-Texas, to move the measure by unanimous consent, agreeing that it would allow double dipping by taxpayers.
That isn’t the only issue that has led to a divide among Senate Republicans, who are expected to introduce a draft of the relief package legislation within days. Finance Committee member Ron Johnson, R-Wis., was angered about rumors that the bill would cost $1 trillion, telling reporters that no one knows how much money is left from the CARES package. “We don’t even know that number,” Johnson said, adding that he wants to take a closer look at which programs worked and which didn’t.
There also isn’t agreement on whether to include a payroll tax cut in the proposal, despite the White House’s insistence on such a measure. House Ways and Means ranking member Kevin Brady, R-Texas, told reporters that a payroll tax cut would boost take-home pay for employees but added that it wouldn’t help everyone.