Editor's Note: This article was updated on November 7 at 12:00 p.m. to reflect the outcome of the 2020 presidential race.
For many business owners, the indecision over the outcome of this year's presidential election is just part of what's been keeping them up at night. The real terror rests in the question of whether they'll see another round of stimulus this year, if at all.
In the months leading up the election--in which Joe Biden was declared the victor on November 7--negotiations over a Phase 4 stimulus bill between the White House and House Speaker Nancy Pelosi (D-Calif.) seemed to take one step forward and two steps back on a weekly basis. For its part, the Senate vacillated between openness to a bill to downright belligerence. And now, after an election season that can only be described as fraught, there's still no deal and it's unclear when one will come. That translates to a potentially damaging lack of visibility for business owners still struggling amid the pandemic.
Take, for example, Jim Angelus. The co-owner of Kezar Bar & Restaurant in San Francisco's Cole Valley has seen sales at his business collapse since the start of the pandemic. While the $129,000 Paycheck Protection Program (PPP) loan and conversion of parking spots in front of his restaurant to outdoor seating helped, he worries what winter will bring. "When it turns cold and rainy, and when we don't have any outdoor diners, I don't know how we're going to get through it," says Angelus. "We're just waiting and hoping we get round two."
He's hardly alone. Of the small businesses that have applied for the PPP, the government's main small-business-focused pandemic relief program, 52 percent anticipate needing additional support over the next 12 months. That's according to an October survey of small-business owners from the National Federation of Independent Business, a small-business advocacy group in Washington, D.C.
While both candidates expressed support for another round of stimulus, it's not clear when--or even if--that will happen. Here's a look at what the outcome of the election might mean for the prospects of another stimulus bill:
A Trump Victory
Prior to the election, Trump suggested he'd approve a deal for as much as $1.8 trillion. Should the Senate stay in the hands of Republicans, that number could dwindle. While it might retain provisions that reup the PPP, the $525 billion aid program that supported forgivable loans to 5.2 million U.S. businesses, a thinner bill would likely contain reduced economic impact payments to households and lower unemployment insurance payouts.
Even before the election, there was little interest in the Senate for spending more money on aid. Indeed, the GOP failed several attempts to pass $500 billion to $700 billion stimulus proposals, which is a mere fraction of the $3.5 trillion Heroes Act, approved by the Democratically held House in May.
What's more, a full package, even a slim one, could get delayed until 2021. The Senate majority leader Mitch McConnell (R-Ky.) recently noted that a deal wouldn't come until "next year."
And if the Senate flips to Democratic control in 2021? McConnell is largely expected to stick to that timeline. "If it's clear that McConnell has lost the Senate, I would be shocked if he moves anything," says Dean Baker, a senior economist at the nonpartisan Center for Economic and Policy Research in Washington, D.C.
Of course, Trump may see how much the nation needs help right now, particularly if the stock market gains give way and businesses continue to falter. He may be compelled to act. There's still time to pass a new round of stimulus, even after the election. And McConnell could cave.
A Biden Victory
If Democrats take both chambers of Congress, Biden would likely look to pass a robust package that might resemble the Heroes Act. That bill offered assistance to state and local governments, an extension of enhanced unemployment benefits, and additional economic impact payments to taxpayers.
They'd most likely have to pull back on that proposal however, as their Senate majority--should Democrats get it--will be thin and will almost certainly require some Republican votes. While passage of any bill requires 50 votes--incoming Vice President Kamala Harris would be the deciding vote--the Democrats would need 60 votes to overcome a Republican filibuster.
Even if he gets the votes, however, it's not clear what a Biden stimulus bill would contain. His original small-business aid program is dated. His campaign cites a Medium post from April 21, in which Biden calls for extending the eight-week forgiveness period through the duration of the crisis. But that was changed to 24 weeks in June, after Trump signed the Paycheck Protection Program Flexibility Act into law.
In more recent days, Biden has expressed support for the PPP. He's also said he would support a "restart package" to help small businesses cover the cost of personal protective equipment and retrofitting an establishment to, say, install plexiglass. And to the extent that small businesses benefit when their customers have money to spend, Biden continues to say he favors enhanced student-loan forgiveness and unemployment benefits, along with another batch of stimulus checks for American families.
Again, it is possible that Congress enacts something before Trump's term ends--but don't expect a full stimulus package, says Baker.
If the Democrats know they are going to sweep the GOP out in January, they may be more inclined to convene on more narrow, bipartisan measures, like supplementing unemployment insurance or tweaking the PPP, so that only the hardest-hit businesses may get a second shot at the program. Trump himself has shown interest in this path. "If Pelosi could cut a deal knowing that the Democrats would be in control of both houses in four or five weeks, I suspect she might be more willing to do that," Baker adds.
There's another possibility: nothing. And, says John Lettieri, CEO of the Economic Innovation Group, a Washington, D.C., research group, "it's also possible that Congress will transition to a different mode of small-business relief entirely. Regardless, I expect any future small-business relief to come with different eligibility requirements than what we saw in the Cares Act."
Ultimately, that leaves business owners like Angelus stuck--hoping they get a deal to get them through the winter--with their best shot at relief not coming until they're already deep into the winter. "It's really sad," says Angelus, "that the success, not even success, the life of small businesses and my business, which are depending a lot on some government help, may not make it because people can't sit down at the table together."