The Trump regime has claimed that the Paycheck Protection Program overseen by the Small Business Administration has saved fifty-eleven billion jobs, or whatever, but numbers floated by the Treasury Department look increasingly suspect.
Figures released by the regime have been based on numbers self-reported by applicants and none of their claims have been confirmed, but thanks to the dutiful work of government watchdogs, we know many of the claims are complete bullshit.
According to ProPublica, some of the biggest beneficiaries of the Paycheck Protection Program (PPP) have been temporary staffing agencies that have collected nearly $8 billion in funding from the program.
Now, connecting people with jobs is important, but these agencies haven't used the funds for their own payrolls because they don't have that many employees. ProPublica reports that they've been claiming outside hires as their own.
More than 11,000 such companies took in a total of between $3.6 billion and $7.9 billion, with about 4,600 of those getting more than $150,000 each. (So far overall, 4.9 million companies have received about $518 billion.)
And there was an oddity in the numbers: 174 claimed they saved 500 jobs each, the maximum under the law, at a rate seven times higher than the share of recipients overall that said they retained 500 jobs. Most temp companies don’t have that many people on their permanent office staff. The explanation? Many were counting workers contracted by other companies as saved jobs, according to lenders, industry experts and staffing companies themselves.
That means many temp companies were able to double dip, getting paid twice for the same worker, once by the client and then again by taxpayers. Employers were allowed to claim loan amounts of 2.5 times their average monthly payroll in 2019. The loans become grants if companies spent most of the money on salaries and the rest on other specified expenditures. Because temps are technically a staffing company’s employees even though they’re working for someone else, the staffing company can claim forgiveness for all the wages they’re paid.
I don't know if you could engineer a bigger scam than this program if you tried. Congress has allocated over $600 billion the program with more funding on the way and a closer look at the terms of it make it look like a lobbyist's dream.
If temporary staffing agencies can claim forgives based on payrolls they're not actually paying for themselves, the case for anyone being forced to repay the loans is suspect. Why should a legitimate small business have to repay the loans, for example, even if they didn't use it for their payroll? These staffing agencies didn't use it for payroll, either, and they got paid twice over.
Congress and the Treasury has estimated the long-term deficit cost of the paycheck program based on the idea that a majority of it will be repaid, but I have serious doubts about that.
When push comes to shove later this year (or next year if the deadline for repaying loans is extended), I expect a majority of what we've spent on the program will be written off as a loss. Those who must repay their loans will probably be legitimate small businesses who needed it the most, while those who didn't need it will have it forgiven. That's the way it looks right now.
The most generous thing you could say is that all of this spending is stimulative in any event, but it's inefficient stimulus. For $600 billion we could have mailed every American multiple stimulus checks that would have gone directly back into the economy instead of being funneled through multiple middlemen; first through commercial banks who handled the applications and then through temporary staffing agencies and eventually reaching workers at the fourth step beyond their actual employer. And what's even left at that point?