Illustration: Aïda Amer/Axios

The coronavirus pandemic is lasting longer than Congress and the White House anticipated when it committed hundreds of billions of dollars to individuals and small businesses.

Why it matters: These bailouts were meant to stop the bleeding, to buy time while the wound cauterizes. Unfortunately, the injury was more severe than originally diagnosed.

Treasury Secretary Steve Mnuchin told CBS that "the entire package provides economic relief overall for about 10 weeks."

  • The CARES Act was signed by President Trump on March 27.
  • Mnuchin's 10-week window expires on June 5.
  • No one expects to see a phase 4 stimulus by that date, nor a full-scale economic reopening.

Paycheck Protection Program (PPP) loans require that small businesses effectively maintain staffing levels for eight weeks. For early recipients, that means their payroll obligations could run out by month's end.

  • The program's coffers were refreshed at the end of April, but small businesses are not allowed to reapply.
  • Companies receiving PPP loans today would be outside the program's purview before July.

Axios asked several congressional leaders to explain why eight weeks was picked as the expiration date but was unable to get a direct answer.

  • House aides from both parties directed our questions to the Senate, and Senate staffers directed Axios to the Treasury. Treasury directed us to prior public comments by Mnuchin, such as that "there's no great models for [this] because so much of what is driving the economy is the health issue."

Direct checks of up to $1,200 to individuals were only expected to help cover expenses for one month, even though many states already are well into their second month of lockdown.

  • Enhanced unemployment benefits last longer, through July 31, although some GOP senators have pledged to block any extension.

All of this makes economic reopening even more complicated.

  • The federal government has effectively created a "back to normal" deadline for small businesses, even though such decisions are supposed to be made by the states.
  • The deadline was set via legislation signed by President Trump on March 27, thus it's unable to adapt to subsequent public health data and guidance.

The D.C. consensus is that the March bills were never intended to be the end of the stimulus.

  • "The first bill was about the art of the possible and getting things through," a senior Senate GOP aide told Axios. "It was supposed to be something that we monitor. You can’t write a bill that’s just a blank check."

But Democrats and Republicans remain far apart on what the next stimulus bill should look like, let alone when it should come to the floor, as already-appropriated funds continue to dwindle.

  • Republican leadership has said it doesn’t plan to continue passing stopgap measures to replenish immediate aid. Instead, it wants the next bill to be more focused on long-term recovery and reopening America.
  • Democrats say states, businesses and the health industry still need emergency relief and that Republicans are unwilling to meet the moment

The bottom line: The small business loans and individual checks were designed as bridges to reopening, but if they only delayed layoffs and economic pain by a couple of months, then they may end up being remembered as bridges to nowhere.

Go deeper

Updated Aug 5, 2020 - Axios Events

Watch: Small business recovery during the pandemic

On Wednesday August 5, Axios co-founder Mike Allen and "Axios Today" host Niala Boodhoo hosted the last of a six-event series on how small businesses have pivoted during the coronavirus outbreak, featuring Sen. James Lankford (R-Okla.), owner of The Curvy Bride Michelle Files and Satori Yoga studio owner Andrea Stern.

Sen. Lankford discussed the federal government's response to the pandemic, financial support for small businesses, and the importance of NGOs as economic safety nets within communities.

  • On the effectiveness of PPP loans: "The Paycheck Protection Program has had some problems, but overwhelmingly it's been very, very successful. Paycheck Protection Program was designed to keep small businesses and not-for-profits running so their people didn't have to end up on unemployment assistance...and it has done that."
  • How the coronavirus has changed the economies of small towns: A lot of small towns in Oklahoma have had their highest tax revenue they've ever had in the history of their towns this year...They're used to those folks in small towns driving to big cities to shop. But they're not. They're staying at home. They're shopping online."

Michelle Files and Andrea Stern highlighted the unique challenges of running a small business during the pandemic and how their respective businesses have pivoted to digital tools in these changing times.

  • Michelle Files on adapting her brick-and-mortar business to a virtual world: "Mobile appointments...really took off. People loved that they were still able to shop from the comfort of their own home. I would just bring the dresses to them and safely be on a Zoom call from my car with any questions that they would have."
  • Andrea Stern on transitioning to live, online yoga classes: "We decided that livestream was the best way to go...one of the nice parts about livestream is that [instructors] actually have people in front of them. You can get feedback from the students. It was just a matter of getting everyone up to speed on the technology."

Axios co-founder and CEO Jim VandeHei hosted a View from the Top segment with CEO of the Small Business and Entrepreneurship Council Karen Kerrigan, who discussed trends in how small businesses have adjusted to the new economy.

  • "[Small businesses] are massively moving to technology platforms. 51% said that they've upped their use of social media in order to engage with customers and find new customers. So they really embrace technology at this very critical time, which is helping them to survive the COVID-19 economy."

Thank you Facebook for sponsoring this event.

Trump floats executive action even if stimulus deal is reached

Photo: Samuel Corum/Getty Images

The White House is finalizing a series of executive orders addressing key coronavirus stimulus priorities if negotiations with Congress fall apart, and it's leaving the door open for President Trump to use them even if a deal is reached that doesn't encompass all of his priorities, two administration officials tell Axios.

What we’re hearing: “I wouldn't be surprised that, if something gets left off the table, we’d be like ‘we can take this executive action too and be able to win on it anyway,’” one official said.

Trump says he's prepared to sign executive orders on coronavirus aid

President Trump. Photo: Jim watson/Getty Images

President Trump, speaking from a podium at his golf club in Bedminster, N.J., on Friday announced that he is prepared to issue executive orders suspending payroll taxes and extending enhanced unemployment benefits through the end of 2020, and halting student loan interest and payments indefinitely.

Why it matters: The impending orders come after talks between the White House and Democratic leadership collapsed Friday afternoon. But Trump said he remains committed to striking a deal with Congress on a broader stimulus package before signing the orders.