White House Tweaks Business Bailout Program But Doesn't Extend It

Congress has poured nearly $800 billion over the past year into helping prop up businesses deeply impacted by the coronavirus pandemic and ensure workers keep their jobs through the Paycheck Protection Program, but President Joe Biden and advocates are rallying around the PPP to do more.

"400,000 small businesses went out of business," Biden told reporters during a visit to Washington, D.C.'s oldest hardware store this week to draw attention to the PPP. "They got in line, but they couldn't get the help."

The Biden administration has moved to retarget PPP funds to smaller businesses and independent contractors overlooked in earlier rounds, even as the program nears its end-of-March deadline. It also has worked to recalculate how much money a business qualifies for through a new targeted approach.

Under the new rules, for two weeks starting February 24, only businesses with fewer than 20 employees could apply. White House press secretary Jen Psaki told reporters the shift was "intended to ensure that mom-and-pop businesses, minority-owned businesses, businesses in rural areas, and other underserved categories of businesses got the help that they needed."

"We found out that an awful lot of it went to bigger businesses that, in fact, weren't supposed to qualify," Biden said.

Congress approved Biden's $1.9 trillion COVID-19 relief package on Wednesday but it didn't include an extension for the Paycheck Protection Program beyond March 31.

Data from the Small Business Administration, which oversees the program, shows that more than 5 million of the forgivable loans have been granted. Businesses don't have to repay the funds if they keep their workers on their payroll. Loans have overall averaged about $100,000 each.

Ashley Harrington, federal advocacy director and senior counsel for the Center for Responsible Lending, told Newsweek that people of color and women-owned businesses were often shut out of the program at its start, while bigger companies scooped up bailouts.

"I think for businesses that have been able to get some of the funding and gotten adequate funding, it's been a lifeline," she said.

But the precise impact remains unknown.

"They weren't even collecting demographic data," Harrington said.

She said ideally, the program would be extended as businesses continue to work through the pandemic. She also is advocating for changes made to the funding available to businesses be applied retroactively, so that businesses that received limited funding can get additional relief.

"We would like to see some action taken immediately," she said.

Harrington is scheduled to testify during a House committee hearing Thursday on expanding aid to vulnerable populations during the pandemic.

"(The latest relief package) is going to help a lot of struggling people and communities, but this is something that absolutely has to be addressed," she said. "We think this is something that should get bipartisan support."

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US President Joe Biden returns to the Oval Office of the White House after visiting W.S. Jenks & Son., a small business that has benefited from a Paycheck Protection Program(PPP) loan, in Washington, DC on March 9, 2021. MANDEL NGAN / AFP/Getty Images