WASHINGTON - A new federal programme to help small businesses weather the coronavirus pandemic is running out of money and falling short in the industries and states most battered by the crisis, risking waves of bankruptcies and millions of additional unemployed workers.
The desperate situation reflects the fitful nature of the government's efforts to put into effect the hulking stimulus plan, a measure that was hastily negotiated by Congress and the administration as both faced intense pressure to respond to an extraordinary public health and economic catastrophe. They also want to add more money for hospitals, food-stamp recipients and state and local governments whose tax receipts have plunged.
Senator Chuck Schumer of New York, the minority leader, spoke on Wednesday with Mr Steven Mnuchin, the Treasury Secretary, in an effort to restart talks, and their aides were to confer later in the day. "We Democrats believe that we need more money for small business, but we need it to go to the people who are underbanked and underserved."
"It's an ironic situation, because everyone's in favour of it," he said of the programme."I just want to see action." Data released on Tuesday by the Small Business Administration, which is administering the loan programme, shows that construction companies have garnered nearly US$34 billion, which is about 14 per cent of the US$250 billion that had been allocated through Monday. Manufacturers secured more than 12 per cent of the loans, about US$30 billion.
In Minnesota, cooks, wait staff and other food service workers have filed nearly a quarter of the state's unemployment claims in that time. Mr Robert Sawyer, owner of the Barn Bistro, a restaurant on Martha's Vineyard in Massachusetts, said he was expecting to have to operate with a reduced level of service for months even after an initial relaxation of the restrictions local officials put in place to stop the spread of the virus.
Some of the banks trying to participate in the programme still cannot link up properly with the agency to submit applications.
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