Covid Stimulus Watch
In addition to aid like unemployment insurance and business loans, Uncle Sam is disbursing hundreds of billions to help the economy recover from impacts caused by a global pandemic and widespread economic shutdown. The Delta variant has sparked renewed hardships.
A new report from three government watchdog groups reveals a stunning figure: companies controlled by private equity firms received approximately $5.3 billion in federal CARES Act funding. Sadly, PE portfolios are not the only beneficiaries with deep pockets that got money from a relief package that was supposed to help small, struggling businesses and keep workers on the job.
As part of the $2.2 trillion pandemic relief CARES Act enacted in spring 2020, states received $150 billion in general assistance via the Coronavirus Relief Fund. Within limits tied to the pandemic, the Relief Fund is meant to be flexible, and allowing states, U.S. territories, and tribal governments to direct money where it is most needed. So how is that money being spent? States have been inconsistent in reporting. One positive outlier: Alabama.
A new analysis by Good Jobs First has identified 22 companies involved in detention operations and prison contracting that received loans totaling more than $47 million from the Paycheck Protection Program (PPP). The findings suggest that additional federal action and evaluation of the PPP will be necessary to meaningfully curtail government support of the private prison industry.
Good Jobs First is a 23-year-old non-profit research center based in Washington, DC. GJF focuses on government and corporate accountability and now seeks a research analyst to work on its Covid Stimulus Watch project.
Oversight is not an abstract public relations battle – it can be a matter of life and death for those struggling to stay afloat during the pandemic. For every dollar lost to fraud and every day that aid is delayed, more Americans inch closer to precarity. Efficient, effective, and equitable distribution of relief funds helps ensure that all families can continue to put food on the table. If the Biden administration intends to make “build back better” more than just a campaign slogan, its oversight activity must continue on its current, productive trajectory.
On March 11, President Biden signed the $1.9 trillion American Rescue Plan (ARP) into law. Like previous Covid relief packages, the ARP allocates significant sums to American businesses, both large and small. Specifically, the bill contains almost $107 billion in direct relief to businesses and additional, significant appropriations for various employer tax credits. The remaining $1.8 trillion, however, will support direct assistance to Americans, augmented social programs, and vaccine distribution.
More than 190,000 American workers have been laid off since March across 1,900 companies that received loans through the Paycheck Protection Program (PPP). The companies intended to support 251,000 workers – instead, they laid off 76 percent of them. About one in eight of those workers lost their jobs permanently.