POLITICS

Paycheck Protection Program Already Needs More Money, Republicans Say

The Small Business Administration has touted thousands of loans totaling tens of billions of dollars ― but it’s not clear how much actual lending has happened.

WASHINGTON — The Trump administration and Republicans in Congress are saying a new program designed to prevent layoffs, that only launched on Friday, already needs more money. 

“The demand for that program has been overwhelming and in just one week, the federal government has provided tens of billions of dollars in relief,” Kevin McCarthy (Calif.), the top Republican in the House of Representatives, said Tuesday, adding that he would support an administration request for more funds. 

The coronavirus stimulus bill Congress passed less than two weeks ago included $350 billion for the so-called Paycheck Protection Program, making it a bigger component of the economic relief act than direct payments to individuals or expanded unemployment insurance. 

The Republican request for more funds is striking considering that none of the economic relief measures have taken full effect. Households haven’t yet received their coronavirus rebates, unemployed workers haven’t gotten the $600 per week in benefits, and few businesses have received loans from the Paycheck Protection Program. 

The program offers small businesses forgivable loans of up to $10 million to cover their payrolls for eight weeks. If they don’t lay off their workers or slash their pay, then the loan is forgiven ― meaning the federal government is essentially offering to assume payroll costs for any firm with fewer than 500 employees. 

The Small Business Administration has touted thousands of loans totaling tens of billions of dollars ― but it’s not clear how much actual lending has happened. 

During a webinar on Tuesday hosted by several business groups, Renee Bender, a staffer for the Senate Small Business Committee, said the Small Business Administration numbers represent loans in the approval process, not money that has actually been disbursed. 

When the program opened on Friday, several businesses told HuffPost they were not able to apply, often because their lenders weren’t taking applications. Bank of America and JPMorgan Chase initially took applications only from customers who already had multiple accounts. 

Scott Cavendish, a craft brewer in Gastonia, N.C., said he filled out an application Sunday and hasn’t heard anything back as of early Tuesday afternoon.

“There is no one to call and ask, and my local bank contacts say they have zero visibility to the process or people reviewing the loans,” Cavendish said in an email.

House Speaker Nancy Pelosi (D-Calif.) suggested in a Tuesday interview she would be open to additional funding for the program given that certain “considerations” are included such as ensuring that women-owned and minority-owned businesses have better access to capital. 

“We want to make sure the program is administered in a way that does not solidify inequality,” Pelosi said on CNN.

Senate Democrats echoed the speaker’s concerns in a letter to the Treasury Department that also highlighted the need to prioritize aid to veterans as well as individuals without a prior relationship with a lending institution. Some large banks restricted access to federal loans to clients who had already taken on debt with them.

It’s unclear, however, if Democrats will agree to quickly approve the extra funding if their demands aren’t met. 

Senate Majority Leader Mitch McConnell (R-Ky.) said he’s hoping to pass the measure via unanimous consent during a pro forma session of the Senate on Thursday. While the upper chamber is technically on recess until April 20, most senators are still in Washington and any one of them could block the move. McConnell and Sen. Chuck Schumer (D-N.Y.) had also not yet discussed the matter as of Tuesday, according to a spokesman.

The effort to urgently replenish the Paycheck Protection Program with hundreds of billions in extra dollars comes on the heels of Trump’s abrupt ouster of the inspector general who was set to probe corruption and provide oversight over the program. Glenn Fine, the acting Pentagon inspector general and former Justice Department inspector general, was initially selected by the nation’s watchdogs to lead the panel in charge of oversight of more than $2 trillion in spending, including the assistance to small businesses. 

But Trump removed Fine from his job as acting Pentagon inspector general, making him no longer eligible to lead the panel under the law. The move follows his decision to appoint a White House lawyer to another key post in charge of overseeing the stimulus program, as well as his ouster of the intelligence community’s inspector general who alerted Congress to the whistleblower complaint that led to Trump’s impeachment last year.

“Donald Trump is clearly executing a systematic purge of inspectors general who have done their jobs and refused to bend to political pressures,” Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, said in a statement on Tuesday. “Every Republican who voted against removing the president paved the way for these authoritarian moves.”


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