The Trump administration on Sunday termed the second phase of an emergency job-saving program a success, with more than $175 billion in loans already issued to smaller companies and more likely after a “pause.”
The two phases of the so-called Paycheck Protection Program (PPP) have provided a total of $669 billion, including $320 billion in the latest tranche.
The program aims to preserve jobs threatened by the coronavirus pandemic, which has paralyzed much of the US economy.
The number of individual loans issued under the second phase — 2.2 million so far — exceeds the number issued in the first phase, according to a joint statement from Treasury Secretary Steven Mnuchin and Jovita Carranza, administrator of the federal Small Business Administration (SBA).
The PPP relief funds, part of a larger package of emergency relief measures worth more than $2.7 trillion, aim to help keep the huge network of small and medium-sized businesses afloat until confinement measures linked to the pandemic are more widely eased.
Some 30 million people in the US, a record, have applied for unemployment benefits since the beginning of the COVID-19 crisis.
“It’s going to be very difficult in the months ahead,” White House economic adviser Larry Kudlow said on CNN. “The economy is still in a terrible contractionary phase, tremendous hardships everywhere.”
But he insisted he was optimistic, pointing to forecasts of “a very strong second-half economic rebound,” possibly followed next year by “one of the fastest growth rebounds in American history.”
– ‘A pause’ –
He said the federal effort to shore up smaller and medium-sized businesses had been “an extremely popular and effective program,” and that “there may well be additional legislation.”
As Congress and the administration study next steps, Kudlow added, “There’s kind of a pause period right now” of perhaps a few weeks.
The administration and congressional leaders of both parties are already in talks on a next round of economic support, but their priorities diverge on several points.
Trump would like to see the next round include tax breaks for workers and for the sports and entertainment industries, Kudlow said. The president also wants to see new spending for infrastructure upgrades across the country.
But Democrats want greater oversight over the vast spending programs and oppose Trump’s efforts to insist states ban so-called sanctuary cities that provide protections for undocumented immigrants.
The Trump administration has also been sharply criticized for funneling billions of dollars in the PPP’s first phase to large corporations that in principle should not have qualified for the conditional loans.
Mnuchin and Carranza noted in their statement that the average loan provided in the second phase has been $79,000, indicating the money is going, as intended, to smaller companies.
They said that since the first phase launched on April 3, the SBA has processed more than 3.8 million loans for a total of more than $500 billion.