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 (AP) — The House is voting Thursday on whether to hold Steve Bannon, a longtime ally and aide to... Read More
WASHINGTON (AP) — The House is voting Thursday on whether to hold Steve Bannon, a longtime ally and aide to former President Donald Trump, in contempt of Congress after he defied a subpoena from a committee investigating the violent Jan. 6 Capitol insurrection. That committee has... Read More
SCRANTON, Pa. (AP) — In an abrupt change, the White House on Wednesday floated new plans to pay for parts... Read More
SCRANTON, Pa. (AP) — In an abrupt change, the White House on Wednesday floated new plans to pay for parts of President Joe Biden's $2 trillion social services and climate change package, shelving a proposed big increase in corporate tax rates though also adding a new... Read More
WASHINGTON -- Despite changes reflecting the spirit of compromise, Senate Democrats were unable on Wednesday to convince a single Republican... Read More
WASHINGTON -- Despite changes reflecting the spirit of compromise, Senate Democrats were unable on Wednesday to convince a single Republican to vote with them in support of guaranteeing Americans the right to easy access to the polls. As a result, the Senate voted 49-51 to end... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about countertops. “If you can’t get the cabinets, you can’t put the countertops on,” Fowke said as he testified on behalf of the National Association of Home... Read More
WASHINGTON (AP) — Scaling down his "build back better" plans, President Joe Biden on Tuesday described a more limited vision... Read More
WASHINGTON (AP) — Scaling down his "build back better" plans, President Joe Biden on Tuesday described a more limited vision to Democratic lawmakers of a $2 trillion government-overhaul package with at least $500 billion to tackle climate change and money for middle-class priorities — child tax... Read More
WASHINGTON - Reps. David Price, D-N.C., and Mike Doyle, D-Penn., on Monday became the latest members of Congress to announce... Read More
WASHINGTON - Reps. David Price, D-N.C., and Mike Doyle, D-Penn., on Monday became the latest members of Congress to announce they won’t be seeking reelection in 2022. The announcements come less than a week after Rep. John Yarmuth, D-Ky., chairman of the House Budget Committee revealed... Read More