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Illustration: Sarah Grillo/Axios

Before the Paycheck Protection Program formally launched last Friday, we knew two things: The rollout would be rocky, and the initial $350 billion wouldn't be enough for America's small businesses.

The state of play: Banks and government officials have been working to smooth out the process. On Thursday, Senate Majority Leader Mitch McConnell's (R-Ky.) attempt to pump another $250 billion into the program via unanimous consent was blocked by Democrats, who are proposing an alternative that includes billions more for hospitals and states.

  • McConnell subsequently blocked the Democrats' proposal to pass their bill by unanimous consent as well, and the Senate adjourned until Monday.

Details: McConnell's supplemental is in response to a request from the Treasury Department, based on initial PPP loan demand.

  • Senate Democrats' alternative also includes new money for hospitals, state and local governments, SNAP benefits, and community-based financial institutions that otherwise are unable to participate in PPP.
  • In other words: Both sides are headed to the negotiating table, although there is no disagreement that the initial $350 billion was insufficient.

Even if McConnell's bill passed, it still does nothing to help most private equity-backed companies with fewer than 500 employees, as it does not address existing Small Business Administration affiliation rules.

  • There have been some guidance modifications to help VC-backed companies, although they remain maddeningly subjective and arguably exclusionary.
  • Many banks do now feel more comfortable lending to VC-backed companies, based on updated lender deference rules. But the onus is now on applicants, who must affirmatively certify that they don't trip affiliation rules. For example, if your Series C lead only owns 10% of the company and doesn't have a board seat, it could still become a problem if their stock charter allows it to block dividends.
  • In short: Startups should only apply in consultation with their lawyers.
  • It's possible this will get addressed in supplemental negotiations, but it's more likely at the bottom of a much more consequential list.

The bottom line: This is iterative stimulus, with crescendoing calls for "phase 4" legislation. The big question, though, is how many businesses may fail while waiting for the rules and budgets to change in their favor.

Go deeper

Journalism enters dangerous new era

Illustration: Brendan Lynch/Axios

The Capitol attack on Jan. 6 resulted in at least nine physical assaults against journalists and at least five arrests, per the U.S. Press Freedom Tracker's top editor.

Why it matters: President Trump's harsh rhetoric towards the press has empowered leaders abroad and locally in the U.S. to continue to attack press that they don't like.

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The beginning of the beginning for Biden's climate push

Illustration: Annelise Capossela/Axios

Joe Biden's inauguration and the days right after will bring a rat-tat-tat burst of climate policy moves, but keep this in mind amid the splashy pledges: pushing through most of his agenda will be a long, uncertain slog.

Why it matters: Biden's climate plan is far more expansive than anything contemplated under President Obama. But for all the immediate pledges, it will take years to see how far Biden gets.

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Biden's inflation danger

Illustration: Sarah Grillo/Axios

President-elect Joe Biden's $1.9 trillion stimulus proposal has economists and bullish market analysts revising their U.S. growth expectations higher, predicting a reflation of the economy in 2021 and possibly more booming returns for risk assets.

Yes, but: Others are warning that what's expected to be reflation could actually show up as inflation, a much less welcome phenomenon.