Trump Going After PPP Abuses
Trump Going After PPP Abuses
When the Paycheck Protection Program (PPP) was first announced, a collective sigh of relief went up from small business owners around the country. For the first time since local and state governments ordered them to close or substantially cut back their business, they had some good news. The federal government was making “up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.” Their hopes were soon dashed when the money ran out and people wanted to know why.
The answer not only surprised but angered those who most needed the loans. Money set aside for small businesses was grabbed up by a number of larger corporations, leaving the Mom and Pop companies that really needed it to contemplate a future without their family businesses.
As expected, liberal talking heads condemned President Trump for letting it happen. Little to no blame was cast on those larger businesses who applied for the money. Instead, there were demands for the government to put aside more money. Because, of course, the Treasury can print up money whenever it wants.
Someone really should teach these folks the meaning of TANSTAAFL.*
President Trump, however, wasn’t satisfied with leaving things as they were. In yesterday’s press briefing, overshadowed by his further explanation of his ban on immigration for the next 60 days, was his announcement that Harvard was returning federal money it received. He also called upon those larger businesses that received money through the PPP to return the loan so those the program was meant to help might survive the downturn created by the shelter at home orders issued by state and local governments.
Prior to yesterday’s presser, stories began appearing, alleging Harvard received close to $9 million under PPP. Trump’s comments at the presser appear to confirm the stories. However, Harvard has denied the allegations, saying instead that the monies it received were part of “a $14 billion fund established under the CARES Act, called the Higher Education Emergency Relief Fund.”
Like most colleges and universities, Harvard has been allocated funds as part of the CARES Act Higher Education Emergency Relief Fund. Harvard has committed that 100% of these emergency higher education funds will be used to provide direct assistance to students facing urgent financial needs due to the COVID-19 pandemic,” Harvard spokesman Jonathan Swain said.
I have an idea. Why don’t they give a partial refund for tuition for this semester since the students aren’t receiving the in-person classroom time they signed up for? Or why don’t they tap their donors and alumni who love having buildings named for themselves?
Whether the money came from PPP or CARES, at this time when there are other more pressing needs than helping an Ivy League school with deep pockets and donors with even deeper pockets, that money should be returned.
Treasury Secretary Steven Mnuchin noted yesterday that “PPP was never designed to give loans to larger businesses.” Instead, it seems many of them not only applied for but were granted the loans. According to CNBC:
Hundreds of millions of dollars of Paycheck Protection Program emergency funding has been claimed by large, publicly traded companies, new research published by Morgan Stanley shows.
In fact, the U.S. government has allocated at least $243.4 million of the total $349 billion to publicly traded companies, the firm said.
The fact this happened points out the problems with putting into place programs so quickly clear guidelines can’t be put into place. I also have more than a few choice words for the businesses that knew they didn’t qualify as “small businesses” but used the loopholes in the system to get the money.
I applaud companies like Shake Shack that have returned the money the received under PPP. Yes, public pressure to do so more than likely played a hand in the decision to do so, but I will still take that as a win. The reason why Shake Shack and others were able to get the money if the first place boils down to a single paragraph in the “900-page stimulus package”.
Think about that. It truly was one of those pieces of legislation where I doubt many–if any–of those voting on it actually read the damned thing. Good intentions when done hastily and without adequate safeguards in place can and often will turn to trouble.
And that is exactly what happened here.
The Senate has approved a $484 billion relief package. It will funnel more money into the PPP as well as providing “funds for hospitals and coronavirus testing.” As much of our country remains in lockdown, as our economy continues to crash and burn, we are warned this is not the last of the money–our money–to be given out to help businesses, hospitals and more over the next few months.
The longer the imposed closures and limitations on businesses continue, the higher the price tag will be. It will go beyond businesses failing and foreclosures increasing. We will see higher incidents of mental health issues and suicides. As long as some states view things like biopsies as elective or non-emergency surgeries, we will see people dying from lack of care. We will see other jurisdictions repeating what is happening in NYC now where paramedics are being told not to resuscitate cardiac patients and not to transport them to the nearest emergency room.
While those fanatical about keeping us at home keep shouting that it’s “for the safety of people”, perhaps we need to be asking them how many must die before they start admitting it isn’t for the safety of people but for control of the same?
In his novel, The Moon is a Harsh Mistress, Robert A. Heinlein used the acronym *TANSTAAFL. There ain’t no such thing as a free lunch. Simply put, you can’t get something for nothing. That’s especially true where the government is concerned. While the PPP monies are necessary right now, this isn’t free money. The government isn’t waving a magic wand and it simply appears. It has to come from somewhere. Oh, there will be those saying it will come from other programs, from cutting costs elsewhere, etc. But the truth of the matter is it comes from you and me, from the taxes we pay.
That means we have to be concerned with where the money is going. If the PPP is supposed to be for the benefit of our local businesses, then we need to demand that safeguards are put in place to see that it happen. If we are tired of living in a nanny state that believes it is the only entity capable of keeping us safe from Covid-19, then we have to let those same politicians know. They need to understand how this shutdown is impacting all of us and that the impact will exist long after the virus recedes and our scientists have developed a vaccine.
The first step is deciding when enough is enough. The second step is demanding that these large businesses that slipped through the PPP system because of that one paragraph in 900 pages return the monies they received. The small businesses they prevented from getting the PPP loans are more than just a building and assets. They are the sweat equity of every person who has worked there. They are the memories of those customers or clients who frequented them. They are often the heart of the community. And all that is at risk because of one paragraph and a bunch of politicians who put their own personal agendas ahead of what is best for the county.
Kudos to Shake Shack and the others that have returned the “loan”. Every other large business should as well. Just as Harvard and other Ivy League and comparable colleges should return monies they have received. At least until they begin refunding monies to their students because those students are not getting what they paid for. IF they are taking distance learning classes now, then the tuition should be prorated. But asking taxpayers to continue supporting colleges at the same level as they did before we heard about Covid-19 while students are not getting the same value for their dollar is close to criminal.
It is time to say “enough is enough” and to shout “TANSTAAFL!” from the rooftops.