As thousands of businesses in Clark County can attest, the Paycheck Protection Program approved by Congress in the wake of the coronavirus pandemic has helped preserve jobs.
That is the short-term impact of the $521 billion that has been distributed through the emergency program. But in the long run, taxpayers deserve answers to pressing questions about the program’s screening process, implementation and transparency.
According to data released Monday by the U.S. Small Business Administration, more than 6,000 Clark County businesses have received PPP loans since the program launched in April. Most of those loans were less than $150,000, while about 1,000 local companies received larger payments. The smaller loans add up to $197.8 million, while specific amounts for larger loans have not been reported. The Columbian Publishing Company received between $1 million and $2 million.
The loans presumably have served their purpose — helping companies meet payroll and keeping workers employed during the economic downturn caused by COVID-19. According to self-reported numbers, Clark County businesses preserved more than 66,000 jobs with help from the program — about one-third of the region’s workforce. Loan forgiveness is available — turning the loans into grants — if companies meet certain criteria, including spending a majority of the money on payroll expenses.
That is a worthy federal expenditure. The pandemic has wreaked havoc with economy, and emergency measures have been necessary to limit the damage and inject some stability. As U.S. Treasury Secretary Steven Mnuchin said: “The PPP is providing much- needed relief to millions of American small businesses, supporting more than 51 million jobs and over 80 percent of all small business employees, who are the drivers of economic growth in our country.”
Yet, the program has been imperfect. The Trump administration initially declined to release information about which companies had received loans and about the size of those loans. Mnuchin testified before Congress that the information was “proprietary” and “confidential,” ignoring the fact that taxpayers are the proprietors who must pay the bills. Only after weeks of pressure from media outlets and the public did the administration relent by releasing the information.
Once that information was made public, additional concerns were raised. Among them is the fact that nearly 90,000 companies that received loans said the money would not retain any jobs or declined to say how many jobs would be preserved. And The Washington Post reports, “It appeared that 10 other companies received between $5 million and $10 million but reported retaining only one job with the money.”
That would belie the purpose of an initiative called the Paycheck Protection Program. The administration should hold those companies to the standards spelled out in the legislation and require those loans to be repaid.
In addition, numerous employers with ties to President Trump, others in the administration or members of Congress — both Republicans and Democrats — also received funds. There is nothing inherently wrong with that; those companies were eligible to apply for loans, just like anybody else. But the situation calls for scrutiny and transparency.
The Paycheck Protection Program was a drastic response necessitated by a drastic situation. Congress and the administration must remain diligent to ensure that it is being efficiently managed and serving its intended purpose.
