Infrastructure bill pulls $31 billion from Covid disaster loan program
03 Aug 2021
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A Senate infrastructure measure unveiled this week would pull $31 billion from a Covid disaster-loan program for businesses.
The Economic Injury Disaster Loan program was one of the mechanisms Congress used to help ailing businesses stay afloat during the pandemic.
The Infrastructure Investment and Jobs Act — a $1 trillion bipartisan bill unveiled Sunday — would permanently rescind $13.5 billion from the disaster-loan program.
Unlike the Paycheck Protection Program, largely aimed at supporting employee wages, the EIDL program’s low-interest loans are for operating costs such as health-care benefits, rent, utilities and fixed debt payments.
The Small Business Administration has paid $236 billion in disaster loans to 3.8 million businesses, according to federal data through July 29.
The Senate’s infrastructure legislation would also claw back $17.6 billion from an affiliated program issuing grants up to $15,000 to hard-hit businesses in low-income communities.
The program, Targeted EIDL Advance, had paid out $2.6 billion to 314,000 business owners, according to the SBA.
An earlier version, created by the CARES Act, was available to a broader swath of entrepreneurs but depleted its $20 billion of funding by July 2020.
The rescission of funds wouldn’t affect balances already obligated by the SBA, which administers the programs, if the infrastructure measure succeeds.
The infrastructure bill allocates money to the nation’s roads, bridges, public transport, broadband, rail, water and airports. Sen. Majority Leader Chuck Schumer, D-N.Y., hopes to pass it before a planned monthlong recess starting Aug. 9.
The bill also seeks to raise revenue by ending a pandemic-era business tax break — the employee retention credit — three months early.