Congress voted to approve more than $300 billion in additional funding for the Paycheck Protection Program (PPP) and Trump signed the legislation into law this afternoon, but that money was effectively already gone before Congress voted for it.
Officials from banks that are handling PPP funds for the Small Business Administration who spoke to CNBC say the money is already gone because there was such a long queue of businesses that didn't receive funding in the first round passed by Congress.
They say businesses that already filed an application are probably the only ones that will receive funding signed into law today.
Banking groups say the volume of applications already sent to the Small Business Administration makes it likely that much, if not all, the new money will go to those already in the queue. Any new applicants would likely miss out on this funding round.
“The majority if not all of the funding Congress is considering right now is already exhausted,” said Nick Simpson, a spokesman with the Consumer Bankers Association.
Roughly a third of the new money has been set aside for smaller banks, which may allow a few new applicants to squeeze into the queue. However, small banks have said for the last two weeks that they have been swamped with applications — doing an entire year’s worth of loans in a weekend — so it’s likely most of that money is now spoken for as well.
When I first read this report, two things immediately popped into my head.
The Treasury Department has issued new guidance that will ostensibly prevent these funds from going to large or publicly-traded companies that don't actually need it, but will that guidance only apply to new applications? What about applications that were filed weeks ago before the new guidance was released? If there's already more or less a queue of approved applications, is there even a system in place to revoke them?
The other question I have is what the hell are we even doing?
If you or someone you know has actually received funding or retained your job thanks to the Paycheck Protection Program, I would genuinely love to hear from you because we have absolutely no way of knowing how many paychecks this program is actually protecting. As far as I can tell -- and I read dozens upon dozens of news reports every day -- stories about jobs saved by the program are very few and far between. A majority of the PPP funding has been distributed to conservative states where the outbreak has been less severe and some of these states, such as Iowa and the Dakotas, haven't even issued stay-at-home orders.
It feels like we're shooting a pellet gun at an elephant even though we've now spent over $3 trillion fighting the economic consequences of the virus. Sending every American a check and distributing money to state governments and hospitals seem to be the most worthwhile things we've done, but that's not even the bulk of the spending.
Sending every American another check could have been better than more funding for the unaccountable paycheck program. At least the former is progressive and nondiscriminatory to the extent that the checks aren't based on political affiliation or connections and the rich do not qualify for them.
We may not know just how poorly this program has been administered for months if not after Trump is gone and the looting is complete.