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Congress designed the Paycheck Protection Program to help small businesses weather fallout from the coronavirus pandemic, but the program’s $521 billion in loans also went to well-heeled and politically connected firms across the economy, including law offices, charities, restaurant chains and wealth managers, the Wall Street Journal reported. The Trump administration released the names of borrowers for the first time yesterday, following pressure by Congress and others to disclose who received the taxpayer-funded loans. On the list: Boies Schiller Flexner LLP, the law firm headed by antitrust litigator David Boies; Newsmax Media Inc., the media company run by Trump donor Christopher Ruddy; and an Indianapolis service provider to charities part-owned by Education Secretary Betsy DeVos. P.F. Chang’s China Bistro Inc., a restaurant operator with more than 200 U.S. locations, got a loan. So did prominent real-estate investors and wealth managers. Nonprofits receiving funds included the Girl Scouts of the United States of America, the Sidwell Friends School in Washington, D.C., whose alumni include children of former presidents, and the foundation that runs the Guggenheim art museum in New York. The 660,000 companies named accounted for only the largest loans — those worth $150,000 or more. The loans can be forgiven if used largely to retain employees. The loans disclosed yesterday represented about 15 percent of more than 4 million loan participants in the program but about $3 of every $4 distributed.

President Trump signed legislation on Saturday extending the deadline for small businesses to apply for the Paycheck Protection Program, enacted in the weeks following the economic shutdown caused by the coronavirus pandemic, NPR.org reported. The original deadline to apply for the PPP was this past Tuesday night. But $130 billion still remained in the fund, out of $660 billion allocated. Both houses of Congress approved the extension unanimously earlier this week. With Trump's signature on Saturday, businesses will now have until Aug. 8 to apply for the assistance. The PPP lets businesses get direct government subsidies for payroll, rent and other costs. The subsidies come as federal loans, but those loans can be forgiven if businesses use at least 60 percent of the funds for payroll. The program has so far doled out about $520 billion in loans to almost 5 million small businesses across the country. The loans were meant to let businesses cover about two and a half months of typical costs. The program's sponsors say that they want to repurpose the program to better serve the challenges businesses are facing now, several months into the pandemic. "As the scope of the financial damage done to small businesses by the pandemic and resulting lockdowns has grown, it has become clear that longer-term support is necessary," Florida Sen. Marco Rubio said. Rubio said he wants to see additional support for "our smallest businesses, especially in our underserved communities." The program faced criticism after loans went to multimillion-dollar businesses such as restaurant chain Potbelly, the coal company Hallador Energy and video storage firm Quantum, all of which received $10 million, the most the PPP will give to any one business.

There is a growing recognition across party lines that Congress will need to spend more money, and soon, to continue to prop up the American economy during the coronavirus recession, the New York Times reported. But there is little consensus on what that next aid package will look like and how quickly it will arrive before the end of summer, and there is a sense among Republicans and Democrats that the next bill will spend far less to help people and businesses than the nearly $3 trillion that Congress approved in March in a series of rapid-fire bills. Some economists say that lawmakers are risking further damage to an already fragile recovery by not moving more quickly. The unemployment rate has dropped from its April peak but was still at 11.1 percent in June. Forecasters at the Congressional Budget Office said on Thursday that they expected the economy to shrink by 5.9 percent this year, a contraction that would be more than twice as large as the one the U.S. experienced during the Great Recession in 2009. Federal Reserve officials are worried that a possible “second wave” of the pandemic would further depress economic growth in a way that would be “more severe and protracted” than the current forecast, according to minutes from their most recent meeting published on Wednesday. Real-time indicators of shopping patterns and business openings suggest that a once-brisk economic rebound stalled in June as the virus began spreading more rapidly in Texas, Florida and other states.

The U.S. House of Representatives yesterday approved an extension of a $660 billion lending program in an effort to help small businesses hit hard by the coronavirus pandemic, renewing a lifeline that had just expired, Reuters reported. The Senate approved the extension on Tuesday. It would keep the Paycheck Protection Program (PPP), which expired at midnight Tuesday, operating through Aug. 8. The bill, which both chambers passed on a voice vote, now goes to President Donald Trump for signing into law. The Treasury Department and the Small Business Administration have handed out $515 billion since April under the small business lending program to help cash-strapped companies make rent and keep workers employed. The House and Senate action is aimed at keeping the funds flowing at least a few more weeks as lawmakers discuss restructuring the program for the longer term. Congress has signed off on roughly $3 trillion in coronavirus aid so far, but Federal Reserve Chair Jerome Powell and other Fed policymakers have said more will be needed.

After a stumbling start, the government’s centerpiece relief program for small businesses was closing down yesterday — although it may turn out to be a temporary hiatus, the New York Times reported. In just three months, the Paycheck Protection Program handed out $520 billion in loans meant to preserve workers’ jobs during the coronavirus pandemic. But as new outbreaks spike across the country and force many states to rethink their plans to reopen businesses, the program had more than $130 billion still in its coffers. It might not be closed down for long, though. Just a few hours before the program was scheduled to shut down late yesterday, the Senate approved a five-week extension for the program to August 8. It wasn’t clear when the House might take up the bill. Read more. 

In related news, U.S. Treasury Secretary Steven Mnuchin testified at a House Financial Services Committee hearing that up to $140 billion in loans for small business could be refocused to support restaurants, hotels and other industries hit hardest by the coronavirus pandemic, Reuters reported. Mnuchin said it appeared there was support among Democrats and Republicans to “repurpose” the money, perhaps by tailoring it to hotels, restaurants and other businesses most impacted by the social-distancing measures adopted to fight the spread of the novel coronavirus. Mnuchin was testifying along with Federal Reserve Chair Jerome Powell before the U.S. House of Representatives Financial Services Committee about the U.S. fiscal and monetary response to the coronavirus crisis, including the nearly $3 trillion allocated by Congress to help businesses and individuals. Read more. 

A “blanket approval” issued by the Trump administration allows lawmakers, Small Business Administration staff, other federal officials and their families to bypass long-standing rules on conflicts of interest to seek funds for themselves, adding to concerns that coronavirus aid programs could be subject to fraud and abuse, the Washington Post reported. Under normal circumstances, lawmakers and some federal employees who apply for small business funds in some cases have to seek approval of a little-known SBA body called the Standards of Conduct Committee. The rule applies to officials who are business owners, officers, directors or shareholders with a more than 10 percent business interest, plus any “household members” of those officials. But in a rule the administration issued April 13, the administration disclosed that the approval requirement had been suspended for all entities seeking funds from the $660 billion program “so that further action by the [ethics committee] is not necessary.” Policy experts and government watchdogs said the blanket waiver could allow officials to write the rules to benefit themselves. Because the administration has not yet released any information about the individual borrowers, it is unknown how many members of Congress or SBA officials have benefited from the nearly $700 billion program. SBA spokesman Jim Billimoria said that the administration issued the blanket waiver because it treated PPP similarly to loan programs that the agency provides in the wake of natural disasters and because agency officials were concerned that there could be a large volume of waiver requests. The Standards of Conduct Committee is made up of the deputy general counsel, acting chief operating officer and associate administrator of human resources.

Restaurants and retailers have applauded recent changes in the government’s $670 billion small business rescue program that make it easier for companies battling the COVID-19 pandemic to qualify for loan forgiveness. But the increased flexibility has come late for scores of small businesses that followed the Paycheck Protection Program’s original rules — and quickly used up most or all of their money, the Wall Street Journal reported. Rising numbers of COVID-19 cases in Florida, Texas and other Sunbelt states have disrupted many reopening plans. The PPP has provided a lifeline for many small companies struggling to stay afloat during the pandemic. It also encouraged businesses to make spending decisions that sometimes weren’t in their best interests, some owners say. To qualify for forgiveness, many prioritized speed over efficacy. Now, with much of the money spent and the economy still hobbled, some are finding that they would have been better off had they not followed the program’s original requirements in an effort to make sure their loans would be forgiven and instead gambled that the rules would change. Changes to the PPP that were signed into law in early June extended the time frame for using PPP funds to 24 weeks from eight weeks and allowed businesses to spend 60 percent instead of 75 percent of their loan on payroll and still qualify for forgiveness. The looser requirements followed complaints the program wouldn’t provide much help to restaurants, retailers and other small businesses that remained closed or were slow to reopen, or to companies that had high costs for rent and other fixed expenses. The new rules came two months after the program’s launch. By then, 4.5 million PPP loans totaling $511 billion had been approved, according to the Small Business Administration. Nearly half of businesses that received PPP loans before the end of May have already passed the original eight-week deadline for spending the money to qualify for loan forgiveness, according to a recent survey from the National Federation of Independent Business. Read more. (Subscription required.) 

In related news, Americans will soon get a first full look at which businesses received $515 billion of taxpayer funds when the government, after initial resistance by President Donald Trump’s administration, releases borrower data for one of its highest-profile pandemic aid efforts, Reuters reported. The colossal data set for the Paycheck Protection Program, to be released by the Treasury Department and Small Business Administration in the coming days, will provide transparency for a first-come-first-served program that from the outset was plagued by technology, paperwork and fairness issues. That could make life uncomfortable for borrowers that broke the spirit or letter of the rules, and for banks that shoveled the money out the door. The aim of the $660 billion program was to help cash-strapped companies keep workers employed and make rent. The Treasury and SBA said they will release a swath of information, including the names, addresses, loan amount ranges and jobs supported for businesses that received $150,000 or more. That should account for roughly 75 percent of the dollars granted, but only 15 percent of the 4.7 million loans. The agencies have not said when they will release the data. Read more.