McConnell announces he will hold vote on small business loan bill as stimulus impasse continues

Senate Majority Leader Mitch McConnell arrives for a Republican senate luncheon in the Hart Senate Office Building on Capitol Hill September 16, 2020 in Washington, DC.

(CNN) -- Majority Leader Mitch McConnell announced on Tuesday that Senate Republicans will attempt to move forward on a "targeted" coronavirus relief bill when the Senate returns to session next week -- a sign that prospects for broad stimulus agreement have all but faded before Election Day.

"Republicans do not agree that nothing is better than something for working families," McConnell said in a statement referencing the small business loan Paycheck Protection Program. "The American people need Democrats to stop blocking bipartisan funding and let us replenish the PPP before more Americans lose their jobs needlessly."

McConnell, speaking in Kentucky on Tuesday, said the GOP proposal will include PPP funds, liability protections and funds for schools and hospitals. The key elements would roughly line up with past GOP proposals that have been rejected, with this proposal totaling roughly $500 billion, McConnell said. Democrats have rejected scaled-back GOP proposals up to this point.

"So far they have said if we can't do everything we want to do we won't do anything," McConnell said of Democrats. "That doesn't solve the problem."

The move by Senate Republicans is the latest in months of back and forth between the two parties and the Trump administration -- with the partisan majorities in both chambers passing or attempting to pass their own preferred legislation, only to have it rejected out of hand by the opposite side. Throughout the Trump administration has made several attempts to negotiate with House Democrats, but a breakthrough has remained far out of reach throughout the course of the summer.

The stakes can't be overstated. Unemployment remains elevated, small businesses throughout the country face an epidemic of closures and the direct payments and enhanced unemployment insurance that helped float families and individuals throughout the pandemic-created economic shutdowns are no longer in effect. The pending result, according to economists, could be devastating if Congress and the Trump administration do not reach an agreement.

But despite the urgency expressed throughout the country, the negotiations have only appeared to get further away from a resolution in recent days -- and significantly more confusing. While President Donald Trump offered a momentary boost to the prospects of an agreement last week when he called for a "big" deal and proposed a $1.8 trillion offer, House Speaker Nancy Pelosi has rejected the effort as insufficient on several major fronts and the talks are once again stuck without a clear path forward.

Senate Republicans, in a private conference call over the weekend, ripped the Trump administration's proposal as far too expensive and filled with policies they found objectionable, sources on the call told CNN at the time. The blowback led Trump's top two negotiators, Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows, to ask lawmakers to pass a standalone small business aid bill.

Yet mere minutes after McConnell announced that's exactly what Senate Republicans planned to do, Trump tweeted: "STIMULUS! Go big or go home!!!"

Sen. Richard Durbin, the second-ranked Senate Democrat, tweaked Republicans on the clear divergence of approaches when asked about McConnell's new effort.

"What I hear from Sen. McConnell is once again take a little piece and be satisfied," Durbin told reporters during a break in the Supreme Court nomination hearing before the Judiciary Committee. "What I hear from President just the opposite. Can the two have them sit down and agree? Wouldn't that be a breakthrough?"

PPP has bipartisan support and has received broad backing for fund replenishments and an extension of its deadline in the past. But the other likely elements of the new GOP proposal -- most notably liability protections -- have run into objections from Democrats and, more broadly, the idea of moving forward on anything below $2 trillion has been viewed as a non-starter up to this point. Democrats, should they stick with the strategy they've utilized up to this point, are likely to block the effort.

Democratic leaders have repeatedly rejected piecemeal approaches to the next relief effort, including a roughly $300 billion Senate GOP relief bill, which Democrats voted unanimously against last month. Instead, they have insisted on a broad, comprehensive response to the twin economic and public health issues facing the country.

Pelosi, in a conference call with House Democrats on Tuesday, made clear she was unwilling to agree to any proposals she deemed insufficient, according to two people on the call.

"We cannot get an agreement just by folding," Pelosi told her members, the people said.

The broader negotiations have remained at a stalemate for months. While President Donald Trump offered a momentary boost to the prospects of an agreement last week when he called for a "big" deal and proposed a $1.8 trillion offer, Pelosi has rejected the effort as insufficient on several major fronts and the talks are once again stuck without a clear path forward.

Pelosi, in a letter to her House Democratic colleagues Tuesday, listed off a myriad of significant issues with the latest Trump administration proposal.

The California Democrat laid out eight key areas where tangible differences exist between the two sides, and the issues largely mirror the splits between the two sides that have existed for more than three months.

Pelosi also made clear that those eight areas "are not exhaustive of our many outstanding concerns."

"Significant changes must be made to remedy the Trump proposal's deficiencies," Pelosi wrote to her colleagues

The Senate GOP move, which aides have said was under discussion for several days, follows a written request to lawmakers from Mnuchin and Meadows to hold a vote to bring the small business program back online. The PPP was designed to bridge the pandemic-driven shutdowns and help businesses keep employees in their jobs -- and in turn, the loans taken out would be forgiven, essentially shifting into a grant. It came to an end with roughly $130 billion in funds unspent.

It also provides another opportunity for Senate Republicans in danger of losing their seats in November to vote on more relief -- something several frontline Republicans have repeatedly pressed McConnell and their colleagues to move forward on in recent months.

This story has been updated with additional developments Tuesday.

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