FOR IMMEDIATE RELEASE: March 29, 2021
Joint Statement from Americans for Financial Reform, Public Citizen, and Project on Government Oversight on the one-year anniversary of the CARES Act and the need for greater oversight in COVID relief efforts.
Washington, D.C. — On the one-year anniversary of the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, we reflect on the great personal and economic hardship millions of Americans continue to face due to the virus and the need for greater accountability over government relief funds. Over 500,000 people have lost their lives to COVID-19 nationwide with people and communities of color disproportionately impacted, and remaining underserved, throughout the pandemic.
Black, Latinx, indigenous, and low-income communities consistently face the brunt of the virus, whether from illness and death from COVID-19 or from economic insecurity brought on by COVID-related furloughs and layoffs. The racist and xenophobic rhetoric surrounding the origins of the virus perpetuated by the Trump administration also resulted in the rise of violence aimed at Asian American and Pacific Islander (AAPI) communities. Meanwhile, corporations and Wall Street firms have enriched themselves during this time of unprecedented hardship and pain.
The CARES Act included efforts to support hardest hit communities including direct stimulus payments to millions of Americans, mortgage relief, and a rent moratorium. It also established programs to stabilize the economy, including six emergency lending facilities created by the Federal Reserve to backstop financial markets that primarily supported investors and large corporations. The Small Business Administration oversaw the Paycheck Protection Program to support small businesses in retaining their workforce.
The implementation of the $961 billion Paycheck Protection Program provides clear evidence of the need for greater oversight and accountability in future COVID relief efforts. The SBA cannot track how many jobs the program has supported through the distribution of forgivable loans worth more than $718 billion in the last year. The program created an exception for large hotel and restaurant chains to access multi-million dollar loans and large banks prioritized lending to corporations over truly small businesses. Banks approved loans that did not indicate the number of jobs that would be retained. Meanwhile small businesses owned by women and people of color reported that they were unable to navigate the PPP application requirements and did not hold the banking relationships necessary to access loans.
As we look to the future and a more equitable COVID relief plan, we need to invest in the oversight bodies examining lending and relief programs to ensure that public dollars are being distributed to their intended recipients. This includes establishing robust disclosure requirements and rules targeting relief to protect jobs and services. Restricting the use of funds for executive compensation, shareholder dividends, and on how firms can use bailout funds in politics to prevent conflicts of interest is also crucial. Finally, investigations into corporate violations during the pandemic are necessary and can be accomplished by filling all currently vacant inspectors general positions with qualified individuals. This will ensure the full investigative power of these watchdogs to address waste, fraud, and abuse of government funds. Setting robust oversight guidelines for current and future relief programs will not only guide us to a full recovery from the coronavirus, but will help advance an equitable recovery.
CONTACT: Aliya Sabharwal email@example.com