Who Is
Hogging Covid Stimulus Funds?
By Phil Mattera for the Dirt
Diggers Digest
The main cause for the stalemate in
Congress over a new round of covid stimulus funding is a belief by numerous
Republicans that the federal government has been too generous to the unemployed.
The enhanced jobless benefits created by the CARES Act need to be curtailed,
they argue, to push people to return to work.
Those worrying about disincentives
to work do not express similar concerns when it comes to assistance for
businesses.
Yet there are glaring examples of corporations that have exploited a variety of covid programs to the hilt.
Yet there are glaring examples of corporations that have exploited a variety of covid programs to the hilt.
Take the example of the aviation
sector. As shown in Covid Stimulus Watch, the Payroll Support
Program (PSP) has provided about $20 billion in grants and $7 billion in loans
not only to the major airlines but also to smaller passenger carriers, air
cargo companies, airport service providers and others.
Despite the generosity of this
program, about 170 recipients also turned up on the list released in early July
of companies that received awards under the Paycheck Protection Program. The
PPP provided these firms more than $200 million in potentially forgivable loans
on top of the $500 million in grants they got from the PSP. (The $200 million
is calculated by using the midpoint of the ranges in which the PPP awards were
disclosed.)
That double-dipping is not the end
of the story. The Small Business Administration recently disclosed the names of
companies that have gotten Economic Injury Disaster Loans (EIDL), a program
that has been greatly expanded to provide another form of covid aid.
More than 70 of the companies that got PSP and PPP awards also show up among the EIDL recipients, making them triple-dippers. The largest total haul, $33 million, went to Ohio-based Champlain Enterprises, which operates CommutAir. The group as a whole received $130 million in grants and loans.
The use of multiple programs by the
aviation sector is more troubling in light of evidence that some of the
companies have engaged in large-scale layoffs at the same time they were
receiving federal assistance.
Recently, Rep. James Clyburn, who chairs the Select Committee on the Coronavirus Crisis, Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure, and Rep. Maxine Waters, chair of the House Committee on Financial Services, sent a letter to Treasury Secretary Steven Mnuchin about this situation.
Recently, Rep. James Clyburn, who chairs the Select Committee on the Coronavirus Crisis, Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure, and Rep. Maxine Waters, chair of the House Committee on Financial Services, sent a letter to Treasury Secretary Steven Mnuchin about this situation.
The letter cited a dozen aviation
contractors that had accepted PSP aid after engaging in layoffs. One of the
firms was Constant Aviation, which in addition to a
PSP grant of $23 million, received a PPP loan worth between $5 million and $10
million.
Another sector that is making use of
multiple covid programs is healthcare. Hospitals, nursing homes and other
medical practices have received tens of billions of dollars under the Provider
Relief Fund and the Medicare Accelerated and Advance Payment Program. This
assistance was certainly needed, yet dozens of the providers also got
assistance from the PPP.
For example, Bronxcare Health System in New York,
got more than $100 million from the Provider Relief Fund and then received two
PPP loans worth between $4 million and $10 million.
MidMichigan Health got $60 million from the Provider Relief Fund and then between $1 million and $2 million from PPP.
MidMichigan Health got $60 million from the Provider Relief Fund and then between $1 million and $2 million from PPP.
The nursing home chain SavaSeniorCare received a total of $35
million from more than 50 separate grants through the Provider Relief Fund as
well as PPP loans worth $9.5 million to $21 million. This is on top of $24
million in accelerated Medicare payments.
Where is the hand-wringing over the
possibility that all these payments are creating a disincentive for
corporations to operate efficiently? These companies may argue that the funds
are necessary for their survival, but so is expanded unemployment pay for the
millions of people still left jobless by the pandemic.