Congress Demands Treasury Department Monitor Coronavirus Bailout Money Better
WASHINGTON — Members of Congress directed tough questions at the U.S. Treasury secretary Tuesday about fraud and abuse in the Trump administration’s coronavirus relief program.
They said billions of dollars intended to protect jobs and family homes were being diverted to small businesses that either did not need it or received multiple forgivable loans based on fraudulent claims.
U.S. Rep. James E. Clyburn, D-S.C., demanded better accountability for the Paycheck Protection Program and other government bailouts “to make sure the taxpayers’ dollars are not squandered.”
He also said the Treasury Department should try to recover money that was wasted through fraud.
Clyburn chairs the House Oversight and Reform Select Subcommittee on the Coronavirus Crisis, which called the hearing to assess the need for additional economic relief for persons who lost their jobs and to stimulate economic recovery from the pandemic.
The main recovery program so far has been the CARES Act, the $2.2 trillion bill signed by President Donald Trump on March 27. Key provisions included $300 billion in one-time cash payments to individual Americans, $260 billion in increased unemployment benefits and creation of the Paycheck Protection Program that provides forgivable loans to small businesses.
A primary goal of the Paycheck Protection Program was to help employers avoid layoffs as the nation shut down much of the economy to slow the spread of coronavirus.
However, a report released Tuesday by the Select Subcommittee on the Coronavirus Crisis said improper oversight of the more than $600 billion Paycheck Protection Program “may have led to billions of dollars being diverted to fraud, waste and abuse, rather than reaching small businesses truly in need.”
About $1 billion went to businesses that incorrectly received multiple loans, the report said. About $96 million went to companies cited previously for government contract violations that should have disqualified them.
The Paycheck Protection Program is implemented by the Small Business Administration, with support from the Treasury Department. The SBA audited only loans worth more than $2 million.
The other 99 percent of the loans were not monitored, leading to widespread abuse, the report said.
Democrats on the Select Subcommittee blamed Treasury Secretary Steven T. Mnuchin for some of the lapses.
“The Treasury department must improve its implementation of relief programs approved by Congress,” Clyburn said.
Mnuchin spent much of his time describing successes of the Trump administration’s coronavirus relief program.
“We also are seeing signs of strengthening and economic recovery across industries,” he told the subcommittee members.
He said 43 percent of the jobs lost since the pandemic began cutting deeply into the U.S. economy last winter have returned as the crisis eases. The economy gained 8.1 million jobs in July, Mnuchin said.
He acknowledged that 16 million workers remain unemployed but said the figure is down from a low point of 24 million job losses.
“The housing market has nearly returned to pre-pandemic levels,” Mnuchin said.
Some Republicans, such as Rep. Maxine Waters, D-Calif., were skeptical of his optimistic report.
“Stop bragging about what’s already been done,” Waters said. “We have people who are hurting.”
Mnuchin agreed another economic stimulus bill like the CARES Act was needed but did not make specific recommendations.
“We are sensitive to the fact more work needs to be done,” Mnuchin said.
He called the pandemic an “unprecedented” challenge for economic planners.
“We’ve been working hard to get an agreement on a bipartisan basis,” he said.
The leading proposal is the Health and Economic Recovery Omnibus Emergency Solutions Act or HEROES Act. It would fund a $3 trillion stimulus package.
It was passed by the House on May 15 but awaits a vote in the Senate, where Republicans seek to trim the amount of funding. They say it would burden the economy with too much debt.
In The News
WASHINGTON -- A congressional hearing Friday showed that foreign computer hackers are facing a growing likelihood of counterattack from the United States as a result of the SolarWinds software breach. Lawmakers and computer industry officials agreed the hackers must face consequences to deter them in the... Read More
WASHINGTON (AP) — As Congress begins debate this week on sweeping voting and ethics legislation, Democrats and Republicans can agree on one thing: If signed into law, it would usher in the biggest overhaul of U.S. elections law in at least a generation. House Resolution 1,... Read More
WASHINGTON – The House passed a $1.9 trillion coronavirus relief package in the wee hours of Saturday morning, helping President Joe Biden clear the first hurdle in passing an economic stimulus bill that includes $1,400 in direct payments to U.S. households, an extension of federal supplements... Read More
WASHINGTON -- A congressional panel wants to cut off funding for the kind of White supremacists who raided the U.S. Capitol building Jan. 6. They described the attack as the first of many against government targets unless they act promptly to stop them. “This threat is... Read More
Congress needs to create mandates to curb the abusive power exerted by a handful of online platforms, according to all six witnesses at a Capitol Hill hearing on Thursday. During the hearing, members of a House Judiciary subcommittee grappled with solutions to address the ability of... Read More
WASHINGTON — The Senate cloture rule might be the biggest Legislative obstacle in front of President Joe Biden’s policy agenda. Simply put, the cloture rule is a debate-limiting procedure that requires 60 Senators to agree before moving on to a vote. This rule is the only... Read More