Battle brewing on coronavirus relief oversight

A lack of oversight for more than $2 trillion in COVID-19 spending approved by Congress is creating uncertainty about whether relief programs are working as planned, adding a new layer of complications to the next coronavirus package.

The three independent oversight panels set up by Congress in the bipartisan CARES Act almost four months ago have all encountered serious obstacles — sometimes because of resistance from the White House, other times due to drafting oversights in the authorizing legislation.

As a result, lawmakers and the public may not have a full understanding of how coronavirus relief aid is being spent until after the election. In the meantime, Congress and the White House are moving toward another pandemic bill that’s expected to carry a price tag of at least $1 trillion.

One of the latest flashpoints to emerge is implementation of the $660 billion Paycheck Protection Program (PPP), an initiative designed to extend forgivable loans to small businesses during the pandemic to keep workers on the payroll.

“We don’t have a full picture from the information that we’ve received so far, so it’s hard to say whether the program is working,” said Liz Hempowicz, director of public policy at the Project on Government Oversight, a watchdog group.

She said recently released government figures for the program are inadequate.

“In the PPP loan data, the administration is claiming that they know how many jobs have been retained under this program and how many jobs have been saved, but there’s no way for the government to know that,” she said, noting that the numbers just represent “how many people are employed by those entities that got these loans rather than how many jobs have been supported by this program.”

The CARES Act, signed into law on March 27, set up three oversight arms: the special inspector general for pandemic recovery (SIGPR), tasked with overseeing coronavirus spending; the Pandemic Response Accountability Committee, an interagency panel designed to promote cooperation among the various inspectors general; and a special Congressional Oversight Commission.

Each entity quickly encountered hurdles.

The Pandemic Response Accountability Committee has not received the spending data that some lawmakers thought it would when they voted for the CARES Act, which mandated that PPP recipients report in detail how many jobs were saved or created because of federal assistance.

For the SIGPR, staffing up is a problem. The inspector general doesn’t have the authority to speed up the lengthy government hiring process.

Critics also argue that while the SIGPR has subpoena power, it has limited authority over criminal matters. While it can issue search warrants, the SIGPR must refer criminal activity to the Justice Department for prosecution.

President Trump undercut the oversight process from the get-go when he attached a signing statement to the CARES Act declaring his administration would not allow the SIGPR to issue reports to Congress “without presidential supervision.”

Trump also blocked Glenn Fine, the then-acting inspector general of the Defense Department, from serving as chairman of the Pandemic Response Accountability Committee, a move that critics warned could be seen as having a chilling effect on the panel’s independence.

The third oversight body, the five-member Congressional Oversight Commission, still doesn’t have a leader, hampering its ability to staff up. Senate Majority Leader Mitch McConnell (R-Ky.) and Speaker Nancy Pelosi (D-Calif.) were reportedly eyeing former Joint Chiefs of Staff Chairman Gen. Joseph Dunford for the job, but he removed himself from consideration on Tuesday.

The lethargic pace of oversight has raised concerns about whether lawmakers have enough information about the programs they already passed as they head into negotiations over another coronavirus relief package.

The PPP, which passed with broad bipartisan support in March and was bolstered by an infusion of $320 billion in April, is likely to receive renewed scrutiny following a series of negative headlines.

Recently released government data shows that lobbying and law firms and special interest groups in Washington received the small-business loans. Americans for Tax Reform, a special interest group that promotes smaller government, received between $150,000 and $350,000, while APCO WorldWide, a lobbying firm, received more than $5 million.

Bloomberg News reported Monday that a raft of data errors related to PPP funding have raised new questions about the emergency spending. The article cited a Tennessee business owner who was listed in government documents as having been approved for a $5 million loan even though he only received $3,700.

Lawmakers who oppose another relief bill have seized on the recent reports.

“What did folks expect when we spent $2 trillion of taxpayer money in three months? Of course there’s going to be massive waste, fraud and abuse,” said Rep. Thomas Massie (R-Ky.), who tried to hold up the CARES Act in the House in March.

Hempowicz said one major problem in overseeing the PPP loans arose in April when the White House budget office, led at the time by Russell Vought in an acting capacity, issued guidance informing agencies that the reporting requirements under the Federal Funding and Accountability Act were sufficient.

Sen. Rob Portman (R-Ohio) raised the issue with Vought during his confirmation hearing last month.

Portman said Vought’s guidance “seems to contradict what the legislation clearly says.”

Opposition to another massive spending bill is also growing among Senate Republicans who are concerned about the soaring federal deficit amid reports that billions of dollars in coronavirus relief isn’t helping the most vulnerable.

“Conservatives are upset because this oversight is even worse than the oversight for TARP. Money is going to entities that don’t deserve it and it’s been a disaster in that sense,” said Brian Darling, a Republican strategist and former Senate aide, referring to the Troubled Asset Relief Program (TARP) Congress passed in response to the financial crisis in 2008.

“If they try and do another program like the PPP, where they’re just throwing money out there without strong requirements about who can qualify, it’s going to be another mess,” he added. “If you go to some of the conservative meetings, people are harkening back to TARP.”

Republican Sens. Pat Toomey (Pa.), Ron Johnson (Wis.) and John Cornyn (Texas) are among those raising concerns about adding to the deficit when hundreds of billions of dollars in funds already appropriated remain unspent and Congress is still trying to grasp just how much the aid delivered has helped the economy.

Toomey is warning against loading up what he calls the “money cannon” and told business owners in Harrisburg, Pa., last week that he was “skeptical” about another round of stimulus checks because “it was a massive amount of money, not at all targeted to the people who really needed it.”

The stimulus check program included in the CARES Act came under criticism when the Government Accountability Office reported last month that $1.4 billion in direct payments went to dead people. Most of the money, though, went to individuals making less than $100,000 a year. 

Democratic senators led by Sens. Elizabeth Warren (Mass.) and Richard Blumenthal (Conn.) say the anti-corruption provisions included in the CARES Act need to be strengthened.

They sent a letter to congressional leaders in late April calling for new legislation to empower the inspectors general overseeing the trillions appropriated so far, as well as language to address potential conflicts of interest and protect whistleblowers.

But as Senate Republicans and the White House move forward in crafting what’s likely to be the last coronavirus relief bill before the election, Democrats aren’t holding their breath on a measure that mandates robust oversight.

“At every opportunity President Trump has weakened and stymied efforts by Congress and independent watchdogs to ensure that trillions in taxpayer dollars are being spent effectively and appropriately,” Senate Minority Leader Charles Schumer (D-N.Y.) said in a statement Monday. “Senate Republicans, afraid of President Trump’s wrath, have turned a blind eye to the administration’s failures and mismanagement of the COVID-19 crisis.”

Tags Charles Schumer Coronavirus Donald Trump Elizabeth Warren John Cornyn Mitch McConnell Nancy Pelosi Pat Toomey Rob Portman Ron Johnson Thomas Massie

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