The recent Paycheck Protection Program “pig-out” has complicated efforts to pass another stimulus package by early August, according to political analyst Greg Valliere, as the billions of dollars sent to “well-connected firms that didn’t need help” has “embarrassed Congress.”
On July 1, the House and Senate extended the PPP for small businesses until Aug. 8, with more than $130 billion still available.
Valliere, chief U.S. policy strategist of AGF Investments, said in his Wednesday morning briefing that while another stimulus bill will likely get done, “it’s not a slam-dunk, and it will take time — which will be in short supply when Congress comes back in the middle of this month before leaving again for most of August.”
On July 6, the Treasury Department and Small Business Administration released a much-anticipated report on the firms that have received PPP loans.
Lobbying firms as well as hedge funds — and even Kanye West — got money, “much of which is considered ‘forgivable loans,’” Valliere said. “And the banks that processed these translations got huge fees.”
Sen Marco Rubio, R-Fla., chairman of the Senate Committee on Small Business & Entrepreneurship, “is proposing PPP reforms in the next bill, which may only affect firms with 300 or fewer employees, and the firms must show that they have suffered significant losses,” according to Valliere.
Treasury Secretary Steven Mnuchin told CNBC’s “Squawk on the Street” Thursday morning that he’s had “very productive conversations” with Rubio, and they both plan to talk with Sen. Ben Cardin, D-Maryland, ranking member on the Small Business Committee, next week; “So there is already bipartisan work,” Mnuchin said. “I think any extension around the PPP is going to be much, much more targeted to the businesses that really need this money and the smaller businesses.”
As to unemployment insurance, “We’re going to make sure that people are incented to go back to jobs,” Mnuchin said. “I’ve heard stories of where companies are trying to get people back to work and they won’t come because the enhanced unemployment. But we’ll fix that and we’ll figure out an extension to it that works for companies and works for those people who will still be unemployed.”