Tracking Waste in the Paycheck Protection Program
At $541 billion, the Paycheck Protection Program (PPP) is the largest component of the federal government’s emergency COVID-19 relief program.
That’s an absolutely massive amount of money for politicians and bureaucrats to spend under normal circumstances, much less today’s. If the PPP were a regular discretionary line item expenditure in the federal budget, it would rank only behind national defense in 2020.
And yet, the PPP accounts for just 20% of the $2.6 trillion allocated by the U.S. Congress to provide coronavirus pandemic relief. Which is to say that while the PPP’s spending is massive, the entire package of COVID-relief spending is absolutely gargantuan.
As the largest part of the government’s COVID relief programs, we can learn a lot about how well the government’s entire relief program is working by focusing on the PPP. Its mission is to save jobs by providing emergency loans to small businesses. The federal government will forgive the loans if they use at least 70% of the funds to pay their employees’ wages.
But as we’ve already seen, the PPP is proving to be a costly mess.
How costly is a question that federal spending watchdog Accountable.US has taken on through its COVID Bailout Tracker. The COVID Bailout Tracker is a database anyone can use to find where money spent on PPP loans has gone.
For example, millions of PPP loans have gone to Chinese-owned companies according to a review of PPP data by consultancy firm Horizon Advisory. Since many of these well-funded firms are subsidiaries of Chinese companies that benefit from assistance provided by China’s government, their receiving PPP loans come at the expense of American firms. Many of which were blocked from PPP funds after all the program’s funds were spent.
Accountable.US has another resource that collects stories of where the PPP has gone wrong. It links to stories about where problems with the PPP has arisen, including tales of businesses that couldn’t get funds.
The phrase “costly mess” may only barely begin to describe how well the federal government has spent COVID relief funds.