WASHINGTON (CN) — Treasury Secretary Steven Mnuchin said during a House Small Business Committee hearing Friday that Congress should approve another round of relief money with an emphasis on businesses hurting the most.
Congress launched the $659 billion Paycheck Protection Program in April after the global coronavirus outbreak hit the U.S. Mnuchin told lawmakers the program known as PPP has already provided 5 million loans for $517 billion, supporting upwards of 50 million jobs during the economic crisis caused by the pandemic.
At its outset, however, the PPP was flawed, with many large corporations qualifying for loans before small businesses. In addition, both Democratic and Republican lawmakers have reaped benefits of the bill they authored, with at least a dozen members of Congress reportedly having ties to businesses that received federal funds.
Mnuchin did not elaborate on the resolution of these issues Friday.
“As you might expect, with a program of this magnitude, executed on a national scale, rapidly, we initially experienced some complications,” he said. “We resolved them quickly.”
With some relief benefits set to dry up at the end of July, Representative Steve Cabot, R-Ohio, asked Mnuchin if Congress should be focused on a second round of PPP loans or be looking at other ways to improve the program.
The Treasury secretary said more PPP money should be allocated and lawmakers should focus on businesses hit hardest by the Covid-19 pandemic.
“I think this time we need to have a revenue test and make sure that money is going to businesses that have significant revenue declines,” Mnuchin said. “That’s something that Congress didn’t have in the first provision. … And I look forward to working with Congress.”
Representative Jason Crow, a Colorado Democrat, asked Mnuchin if he thought it was necessary for members of the Trump administration to disclose their connection to businesses applying for PPP loans.
While other provisions of the $2 trillion CARES Act passed in March included language barring companies owned by President Donald Trump and his family from receiving loans, the PPP was exempt from those rules. The Small Business Administration in turn waived ethics rules related to officials being forced to seek approval through the SBA’s Standards of Conduct Committee if they were in some way involved.
Trump’s friends and family have reportedly benefited, with more than $1 million in PPP loans flowing to his impeachment attorney Jay Sekulow’s American Center for Law and Justice and some funds going to a real estate business owned by the family of Jared Kushner, the president’s son-in-law and adviser .
Mnuchin disagreed with Crow’s assessment of a need for disclosure Friday.
“I don’t believe that because again, this was not an issue that was required by Congress, this was a very specific issue and there were no restrictions,” Mnuchin said. “Now I’m not aware if they took loans or they didn’t, but let me be clear, there are no restrictions on the PPP. … And I believe that the Trump administration should be held to the same standard as Congress on the PPP.”
Committee Chairwoman Nydia Velazquez focused on a $150,000 cap applied by the SBA to Economic Injury Disaster Loans, or EIDL, another federally funded relief program for businesses. Velazquez said as the legislation was drafted and officials met with Senate and House committees, Small Business Administrator Jovita Carranza was asked if they would need more funding to aid businesses.
“Yet here we are, and it is our small businesses that are suffering,” said Velazquez, a New York Democrat. “Moving forward, you must work with us and I ask that you remove the cap for new EIDL loans immediately and allow those with existing loans, to obtain the capital they deserve.”
Representative Dan Bishop claimed Planned Parenthood “brazenly violated the law concerning business affiliation” by receiving $80 million in PPP funds through local are separately incorporated. When Bishop asked for an explanation into the SBA’s investigation of that alleged fraud, the North Carolina Republican was met with an echoing refrain heard Friday: the issue couldn’t be discussed publicly.
“One, we do not discuss individual loan issues publicly, and secondly, we will be reviewing all affiliations and all loans closely,” Carranza, the SBA head, said.