The Paycheck Protection Program was expensive, complicated, unfair and graft-prone. But it worked.
The perception of a boondoggle is hardening. But before we slam Congress and President Trump for trying something new, let’s consider the big picture.
In late March, as Congress prepared the $2.2 trillion CARES Act, it became clear that pandemic-related shutdowns would cost millions of jobs. In April alone, the country shed 19.4 million jobs, more than twice as many jobs lost during the 2008 financial crisis, and 15.2 percent of the total.
To avoid turning a temporary, if long, health emergency into an indefinite Depression, Congress had to act. Lawmakers revived two old tools: unemployment benefits and aid to state governments.
But they also did something different: try to prevent layoffs in the first place.
The novel Paycheck Protection Program paid $523 billion in low-interest loans to 5.2 million small businesses. The businesses used the money to help pay wages for more than 50 million people and cover other expenses, such as rent. The loans are forgivable, provided employers didn’t lay off workers during the period the money covered, either eight or 24 weeks.
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