Deployment of a $ 2 trillion recovery plan marred by problems and breakdowns

As an industry official told CNN yesterday, “We are building the space shuttle as it flies to Mars.”

The problems, breakdowns, frustrations and angst that currently pile up on every element of this third stimulus package were all predictable, and yet that doesn’t make it any less painful for people who are waiting for their personal stimulus checks to do so. the grocery store or for the small business owner who is waiting to be approved for a loan so they know they can continue to pay their employees.

These programs are heavy. They were widely accepted during late-night negotiations as a global pandemic grips the nation and the turmoil is real.

There is hope, however, that many of the more egregious issues can be – and likely will be – addressed in yet another stimulus package passed by Congress, though the particular parameters of what will and will not be included in it. such a plan are still under review. determined.

Spotlight on the SBA

Nowhere is this clearer than in the new Small Business Administration loan program.

For much of the day on Monday, multiple sources sent text messages and emails saying the system lenders used to enter loan application information was down. Put simply, that means that for part of Monday’s day, no one was able to ask for the nearly $ 350 billion in aid created by Congress to keep small businesses afloat.

Technical issues aren’t the only frustrations that arise. Many lenders are still waiting for further advice on what criteria to meet before cutting checks, some groups like venture capitalists need more advice on whether they qualify, and everyone is worried about being left behind. .

Time is not something business owners have a lot of right now as they set payroll deadlines and try to make decisions on how long they can stay afloat.

“The pragmatic part of me knows it can’t happen overnight,” an industry source told me on Monday, adding that it was always “heartbreaking” to talk to small business owners who were clamoring for big ones. screams to find a bank willing to give them a loan.

The problems with this program are not in dispute. Republicans, Democrats, SBA, and Treasury – everyone agrees there are issues that need to be addressed. There is some hope that the Fed’s announcement on Monday that it will open a new facility to buy bank loans under the Paycheck Protection Program will help ease the stress on financial institutions already. short of cash. It’s the silver lining here: everyone is working towards the same goal. But it’s still going to take time, and there is no doubt that people’s livelihoods are at stake.

Upcoming recovery issues

To pretend that the SBA is the only area of ​​this stimulus package that’s having a problem is missing out on a much bigger story unfolding right now.

For example, Capitol Hill’s expectation this week is that they will get additional advice on how the administration plans to distribute nearly $ 500 billion to large companies (those with more than 500 employees). The legislation gave the Treasury fairly broad discretion over how it can use that money and this was intentional given that there was no knowing who was going to be affected by the virus, but the politics of whom. gets what is sure to play in the coming days and weeks.

When and how will you receive your stimulus money?

It is also questioned whether firms in difficulty could be prevented from obtaining the funds given the investment quality standards that generally apply. Some businesses that looked healthier six weeks ago have been downgraded in recent weeks. Some of them may be those who need the money the most (like cruise lines or chain restaurants, for example).

Hospital funding: The stimulus bill has also allocated $ 100 billion to hospitals, but the need for healthcare facilities is currently huge and lawmakers are unsure if it will be enough. Complicating the situation further is that the rules around obtaining the funding are still largely at the discretion of the Trump administration. Minnesota Senator Tina Smith’s office assistants told CNN on Monday that the Department of Health and Human Services was already directly involved in helping to channel the money. But other than helping to cover the cost of uninsured patient care and funding increases in rural areas, it’s unclear what the direct allocation formula will be for this. This is an area that states and jurisdictions likely to seek help have said may be ripe for congressional scrutiny.

Unemployment insurance: CNN reports that the House Ways and Means Committee is still waiting for the 50 states to get money from the second stimulus bill in order to cover the administrative costs that are arising from the implementation of a rapid increase in unemployment claims. A committee aide told CNN on Monday that the committee depended on individual members to report to Ways and Means once their state received the money, but that they only had direct evidence of a handful of ‘States having received their share. This is before they even reach the extra money that individuals are supposed to start getting through the third stimulus bill.

Personal checks: Direct government checks, as CNN reported, could be delayed for those who do not have direct deposit information filed with the government. The timeline that House Ways and Means has circulated is that checks will start going out on April 13, but if the government doesn’t have direct deposit information and has to mail a check, it could take four months. or more. Other frustrations include the fact that administrative guidelines excluded students and people over the age of 17 from getting a check, but parents also can’t get the $ 500 they would receive for them. younger dependents.

Phase 4 fixes

In recent days, Democrats, including House Speaker Nancy Pelosi, have moved away from the idea of ​​a “phase 4” stimulus that includes a massive infrastructure component.

Instead, the focus on “phase 4” will likely include the increase in many accounts that lawmakers and industry sources say will not cover the economic pain this country finds itself in over the course of. the next few months. That’s it, from more money to SBA loan programs to hospitals.

But, expect lawmakers to also fight to clarify certain sections of the legislation where industries in their district or individuals have been barred from getting some of the money. A Democratic aide cited small loans as an area where Democrats explicitly wish to write guidelines to ensure banks don’t just lend to existing customers. The idea according to Aid is to “make fixes and more funding together”.

The problem with this, as one Republican aide noted, is that doing too many detailed corrections could prevent Congress from actually going through “Phase 4.” The details, after all, are where the things stick.

Overall, aides say no one thinks things are going perfectly right now, but “at the end of the day it’s the government that gives people money. It’ll be understood.”

This story has been updated.

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