After prodding from Democratic lawmakers, the Trump administration has agreed to give Congress — but not the public — complete data on the millions of small businesses that received loans from a $600 billion-plus coronavirus aid program.
Senior administration officials told lawmakers they will provide full details on the roughly 4.7 million taxpayer-funded loans worth $515 billion awarded under the Small Business Administration’s Paycheck Protection Program. Their concession came with a warning to lawmakers not to divulge “confidential” loan information to the wider public.
Rep. Richard Neal, D-Mass., chair of the House Ways and Means Committee, was one of the congressional oversight leaders who had pushed for the loan data from Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
The administration’s concession is “a step in the right direction,” Neal spokesperson Erin Hatch said Friday, though Neal believes the names of all recipients should be made public.
Rep. Nydia Velazquez, D-N.Y., told The Associated Press in an email that while it’s unfortunate it took so much pressure from Congress, “this is a valuable step, and we will be carefully reviewing the data to ensure that taxpayers and small businesses are being properly served by the program.” Velazquez heads the House Small Business Committee.
Last week, the Treasury Department and SBA relented to pressure from lawmakers and watchdogs and agreed to publicly disclose details on which businesses received loans under the program. Up to now, SBA has only provided summary information about the beneficiaries of its loans, such as the industry the businesses are in and the state in which they are located.
But it will be only a partial disclosure: For loans of less than $150,000, the agencies will not publicly name the recipients, revealing only loan amounts and summary information broken down by ZIP code, industry and demographics, and the number of jobs they helped protect.
The SBA has processed 4.7 million loans worth about $515 billion. Nearly 75% of the total money approved so far has gone to businesses borrowing more than $150,000. But 86% of the loans have gone to businesses borrowing less than $150,000.
Ethics watchdogs say more transparency is needed to get an accurate picture of who was helped and who was left out. Recipients of smaller loans could be part of a bigger subsidiary that would be hidden, for example, and it wouldn’t provide a clear picture of what percentage of loans went to minority-owned businesses.
Under the new agreement, the agencies will provide the complete data on loans of all sizes to the congressional oversight panels. Data on loans under $150,000 will only be provided to Congress, not the public. And Mnuchin and Carranza told Neal, Velazquez and Rep. Maxine Waters, D-Calif., head of the House Financial Services Committee, in a letter that it will be given “with the understanding that nonpublic, personally identifiable and commercially sensitive business information will be treated as confidential.”
Details on loans of all sizes are publicly disclosed for the SBA’s traditional lending programs. But the PPP is different for the smaller loans, the administration maintains, because the loan amounts are calculated based on payroll data, which employers generally view as competitively sensitive or proprietary. The payroll information could include the personal income of sole owners and independent contractors, the administration says.
“This approach to public disclosure will allow Americans to see how their tax dollars are being spent, while ensuring that America’s entrepreneurs and job creators are able to compete fairly as our economy safely reopens,” Mnuchin and Carranza said in their letter.
The Paycheck Protection Program started in early April and runs out at the end of the month. The loans can be forgiven if businesses use the money to keep employees on payroll or rehire workers who have been laid off.
Several hundred publicly traded companies received these loans despite their likely ability to borrow money elsewhere, and, after an outcry, some said they would return the money.
The pandemic has caused a deep recession, and the U.S. unemployment rate is above 13% after falling slightly in May. Economists have said the small business loan program has helped, though it’s hard to know by how much.