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When the $2.1 trillion Cares Act was enacted just over a year ago, Democrats in Congress, mistrustful of the Trump administration’s ethical track record, made robust policing a top priority for the gusher of new spending, the Washington Post reported. The law, intended to stem the economic pain caused by the coronavirus pandemic, created new oversight bodies and directed more than $270 million to new and existing watchdogs. A House subcommittee with the power to issue subpoenas quickly got to work with queries to private corporations and government agencies. One year later, the conversation in Washington over how to oversee a new, nearly $2 trillion relief package administered by the Biden administration is decidedly more muted. The latest legislation, called the American Rescue Plan, created no new oversight bodies, although it appropriated more than $200 million in new funding for existing ones. To date, more than $5 trillion in government spending has been appropriated to respond to the pandemic and ensuing economic calamity. Yet, over the past year, oversight from three separate watchdog entities has been either undermined by partisan disagreements, slowed by bureaucratic hurdles or constrained by funding, according to interviews with those tasked with carrying out oversight, outside experts and advocates. One of the watchdogs created by the Cares Act has yet to receive a chair, hampering its work. Another watchdog faces budget constraints with just three dozen full-time staff so far.

The vise is tightening on owners of restaurants, fitness centers and other small U.S. businesses trying to hold on until the economy fully reopens. And unlike at most big companies, the burden is often deeply personal, the Wall Street Journal reported. Small-business owners taking on debt or signing a lease often end up providing a personal guarantee, in which they promise to be responsible for the payments if the business can’t pay. Increased vaccination rates, the loosening of state restrictions and the $1.9 trillion stimulus package are raising hopes that these businesses can make it through. At the same time, the weight of those guarantees isn’t dissipating. Many businesses have accrued debt after deferring rent, loan and other payments, and owners worry the stimulus funds will only go so far. Nearly 60% of small businesses with employees that took out loans used personal guarantees to secure business debt, according to a survey released by the regional Federal Reserve Banks in 2020. Forty-four percent of small firms with employees have more than $100,000 in debt and 8% owe more than $1 million, according to a separate regional Fed survey released this year. The weight of personal guarantees has grown as the pandemic has stretched on, increasing the amount small-business owners owe and forcing many to draw down savings. Many businesses have had to close and reopen more than once, adding to their costs. A survey completed in late March by the U.S. Census Bureau found that 18% of small businesses said they would need to obtain financial assistance or additional capital in the next six months.

President Joe Biden on Saturday signed the “COVID-19 Bankruptcy Relief Extension Act” into law to extend provisions providing financially distressed consumers and small businesses greater access to bankruptcy relief. The legislation will extend personal and small business bankruptcy relief provisions that were part of last year's CARES Act through March 27, 2022. Some of the key provisions of last year's relief packages were the increased debt limit to $7.5 million for small business debtors electing to file under subchapter V and allowing individuals to seek COVID-19–related hardship modifications, among other changes. With the CARES Act bankruptcy provisions originally due to sunset on March 27, the House of Representatives on Friday afternoon passed the Senate-amended version of H.R. 1651, the “COVID-19 Bankruptcy Relief Extension Act of 2021,” which passed by unanimous consent in the Senate on Wednesday. The Senate struck a provision from the original bill that would have extended the bankruptcy provisions of December's “Consolidated Appropriations Act of 2021” (CAA) that are due to sunset on December 27.

The Justice Department has charged 474 people over the past year with trying to swipe more than $569 million by using criminal fraud schemes connected to the coronavirus pandemic and seized at least $580 million in civil proceedings, officials announced Friday, demonstrating how taxpayer-funded programs meant to ease the economic burden of the crisis have become susceptible to scammers, the Washington Post reported. The department said that it has seen fraud attempts connected to several government aid programs. The Criminal Division’s Fraud Section, for example, has charged at least 120 people in connection with fraud of the Paycheck Protection Program, a taxpayer-subsidized loan program regulated by the Small Business Administration, which has long been of concern because of how program funds were disbursed with relatively little oversight. The department said that it had also seen immense fraud in connection with the Economic Injury Disaster Loans program, and, along with the Secret Service and U.S. attorney’s office in Colorado, had seized $580 million of possibly stolen money from that program through administrative procedures. That money, authorities said, is separate from the funds explicitly tied to criminal charges.

The House of Representatives this afternoon passed the Senate-amended version of H.R. 1651, the “COVID-19 Bankruptcy Relief Extension Act of 2021.” The legislation will extend personal and small business bankruptcy relief provisions that were part of last year's CARES Act through March 2022. Some of the key provisions of last year's relief packages were the increased debt limit to $7.5 million for small business debtors electing to file under subchapter V and allowing individuals to seek COVID-19–related hardship modifications, among other changes. The legislation was amended and passed unanimous consent by the Senate on Wednesday night to only include the CARES Act bankruptcy provisions. The amendment struck section 2(c) from the bill, which was the section extending the bankruptcy provisions of December's “Consolidated Appropriations Act of 2021” (CAA) that are due to sunset on December 27. While the COVID-19 Bankruptcy Relief Extension Act originally proposed the CAA provisions to expire at the same time as the CARES bankruptcy provisions on March 27, 2022, the amendment means that the CAA provisions will still expire in eight months. H.R. 1651 now heads to President Biden’s desk for signature.

Senate Judiciary Chair Dick Durbin (D-Ill.) and Ranking Member Chuck Grassley (R-Iowa) introduced S. 473 on February 25 to extend the bankruptcy provision sunsets, and House Judiciary Committee Chairman Jerry Nadler, D-N.Y., introduced H.R. 1651, the House companion, on March 8. ABI on March 5 sent a letter to Senate Judiciary Committee leadership supporting S. 473, the "COVID-19 Bankruptcy Relief Extension Act," to extend, for another year, bankruptcy-relief provisions due to sunset in the 2020 CARES Act and December 2020 omnibus appropriations bill. “There is no doubt that the COVID-19 pandemic and its aftermath will continue to put significant strain on U.S. small businesses in the near future and perhaps for years to come,” ABI Executive Director Amy Quackenboss wrote in the letter to Sens. Durbin and Grassley. “By extending the increased debt limit of the SBRA, the COVID-19 Bankruptcy Relief Extension Act offers much-needed relief to a growing number of U.S. small businesses who find themselves in need of reorganizing in order to stay in business.” Click here to read ABI’s letter.

Companies harmed by the coronavirus pandemic can soon borrow up to $500,000 through the Small Business Administration’s emergency lending program, raising a cap that has frustrated many applicants, the New York Times reported. “The pandemic has lasted longer than expected,” Isabella Casillas Guzman, the agency’s administrator, said on Wednesday. “We are here to help our small businesses, and that is why I’m proud to more than triple the amount of funding they can access.” The change to the Economic Injury Disaster Loan program — known as EIDL and pronounced as idle — will take effect the week of April 6. Those who have already received loans but might now qualify for more money will be contacted and offered the opportunity to apply for an increase, the agency said. The Small Business Administration has approved $200 billion in disaster loans to 3.8 million borrowers since the program began last year. Unlike the forgivable loans made through the larger and more prominent Paycheck Protection Program, the disaster loans must be paid back. But they carry a low interest rate and a long repayment term. Normally, the decades-old disaster program makes loans of up to $2 million, and in the early days of the pandemic, the agency gave some applicants as much as $900,000. But it soon capped loans at $150,000 because it feared exhausting the available funding. That limit — which the agency did not tell borrowers about for months — angered applicants who needed more capital to keep their struggling ventures alive. The agency has $270 billion left to lend through the pandemic relief program, James Rivera, the head of the agency’s Office of Disaster Assistance, told senators at a hearing yesterday.

St. Peters, Mo.-based Ben F. Blanton Construction Inc. has reorganized after electing to file under subchapter V of chapter 11 last year, the St. Louis Business Journal reported. All of the contractor's creditors accepted the plan, and the company has closed on its exit financing, according to company officials. In July, Blanton filed for chapter 11 bankruptcy, listing assets and liabilities of $10 million to $50 million, after an insurer failed to pay Blanton for a "construction related issue and Covid-related matters," officials said. The company at the time was granted a subchapter V bankruptcy, which allowed businesses carrying up to $7.5 million in debt to have an expedited bankruptcy. Previously, the Code limited small businesses to $2.7 million in debt. For Blanton, it meant a faster and less expensive bankruptcy process. Blanton Construction cited $2.5 million in secured debt obligations and $3.4 million in trade debt owed to various vendors, suppliers and others, in addition to reduced revenue due to COVID-19 as reasons for the July filing. The company reported $30 million in 2019 revenue and projected $25 million in revenue for the 2020 fiscal year, according to court documents. Blanton is a 50-year-old construction management, design/build and general contracting company. It does work in the industrial, commercial, retail, education, institutional and senior care markets.

As Congress considers extending the government’s flagship small business coronavirus-aid plan, some of the smallest businesses want government officials to make some recent changes in the program retroactive, the Wall Street Journal reported. The new rules allow sole proprietors, independent contractors and the self-employed to use gross income rather than net profit when determining the size of their forgivable loan. The tweak followed complaints that the program had disproportionately benefited larger businesses, leaving behind sole proprietors and many minority-owned businesses. Bharat Ramamurti, deputy director at the National Economic Council, said he was sympathetic to borrowers unable to benefit from the changes. The Biden administration wanted to move quickly on its loan calculation modification and “retroactivity is a separate legal question,” he said. “It didn’t make sense to hold off on allowing all these other businesses to take advantage of [the new rules] if we could at least make the change prospectively for tens of thousands of them,” he said, adding that the best solution would be for Congress to make the changes retroactive. Roughly 164,000 loans have been submitted using the new formula, the Small Business Administration said. Another 136,000 small-business owners who might have benefited from the change received PPP loans this year based on the older, less generous formula, according to figures provided by the SBA.