Oversight sputters as Trump starts doling out billions in coronavirus aid

None of the oversight tools included in the sprawling rescue package are up and running, and problems are already cropping up with the law.

4/9/2020 3:30:00 AM

Congress assured America that its rush to deliver $2 trillion in coronavirus relief wouldn't lead to waste, fraud or abuse because they packed the law with powerful safeguards. Yet none of the built-in oversight mechanisms are even close to functional

None of the oversight tools included in the sprawling rescue package are up and running, and problems are already cropping up with the law.

The challenge of implementing the small business loan program surfaced vividly last week, when the Small Business Administration delivered guidelines to banks just hours before they were due to turn on the spigot. As of Wednesday, banks said they still lacked critical information needed to close out loans and that SBA's loan authorization system continued to malfunction.

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The flood of companies seeking assistance seems sure to compound the challenges facing banks, and the Treasury Department and SBA have done little to ease concerns that they’re getting on track.Tax refunds and stimulus checks hit snagsThe CARES Act included a provision meant to provide relief to companies by allowing them to get tax refunds by redoing their previous year’s taxes to include their current losses. There's one

glaring problem: The companies are required to file for those refunds on paper and mail them in — and most IRS employees are working from home. There's virtually no one there to pick up the mail.There's also plenty of other guidance pending from the IRS, a typical problem in typical times but one sure to slow the impact of the CARES Act as companies struggle to survive.

Meanwhile, the IRS is still figuring out how to quickly parcel out the cash payments the new law promised to individuals and families across the country. The agency intends to deliver as many as possible via direct deposit, which would expedite those payments. But for many low-income Americans who don't file tax returns, the IRS would likely not have direct deposit info. So the agency is setting up a website to collect banking information in order to more quickly process the checks, but there’s no timeline on when that will be up and running.

Airline relief still stalledPlanes are parked at Pinal Airpark on Wednesday in Red Rock, Ariz., as many passenger planes are being kept at the facility as airlines cut back on service due to the new coronavirus pandemic. | Ross D. Franklin/AP PhotoThe CARES Act included $29 billion in an immediate infusion for passenger and cargo airlines, funding meant to quickly shore up the industry's cratering finances by paying workers' salaries and preventing layoffs. But even though the money was due to begin flowing earlier this week, it hasn't happened yet, and airlines are still in talks with the Trump administration over the terms.

Treasury released guidance for applying for the grants and loans last week, with the initial application deadline for grants last Friday. Airlines that missed that deadline won't get their applications considered as quickly. And perhaps most urgently, unions are concerned that some airlines could refuse the grants if the U.S. government insists on taking a stake in the airline as part of the tradeoff.

The law also includes another $29 billion in loans for airlines, part of the Treasury's $500 billion economic rescue fund. There's no deadline or timeframe for those funds to begin flowing, but there's no indication that any have moved yet. As of Monday, Treasury wasn't accepting applications for the loans.

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So at a critical moment for the airline industry, the rescue law has done little in the way of providing relief.No education funds flowing yetEducation Secretary Betsy DeVos. | Alex Brandon/AP PhotoThe law included $31 billion in emergency education assistance, much of it earmarked for states, K-12 schools, universities and direct aid for college students. But so far, there's been no funding distributed by the Education Department and there's been no guidance about how or when that money might arrive.

Higher education groups and state officials have been urging the Trump administration to move more quickly to immediately disburse the funding amid unprecedented school and college closures across the country. Govs. Asa Hutchinson of Arkansas and Jay Inslee of Washington over the weekend wrote a letter on behalf of governors, urging Education Secretary Betsy DeVos to provide the funding “within the next two weeks.” But DeVos hasn’t given any indication she’s on board, meaning the relief money is still just sitting there.

Meanwhile, there's also a push among some Senate Democrats to exclude for-profit colleges from eligibility — or to impose stringent restrictions on how those companies can use the money — but a whole new layer of such oversight seems unlikely to be accepted by Republicans.

Broadband concernsadopting an orderlast month to tap $200 million in CARES Act funding for a "Covid-19 Telehealth Program," an effort to speed grants to health care providers to expand telehealth capabilities. At the same time, the FCC is skipping its normal competitive bidding requirements to ensure the money gets to where it’s needed speedily — a decision that could mean a worse deal for taxpayers.

Meanwhile, there are plans for a separate pot of $100 million in broadband funding flowing through the Department of Agriculture to help build out internet infrastructure in rural areas, plus another $25 million for USDA's Distance Learning, Telemedicine and Broadband program. But this infusion has already stirred some concerns about exacerbating already existing problems with duplication and waste.

A Republican FCC commissioner hasabout the department’s effort, worrying that the program has the potential to undermine and wastefully duplicate other broadband efforts, some of which may already receive financial help from the FCC.Susannah Luthi, Brian Faler, Brianna Gurciullo, John Hendel, Michael Stratford and Zach Warmbrodt contributed to this report.

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Congress puts $ 2 Trillion in Trump's tiny hands. And the guy who should overview the spending is the first to be fired. Any second thoughts anybody? We have watched Trump roll out policy at press conferences with absolutely no guidelines or structure. His screwed up travel ban is a classic example of Trump's incompetence.

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Bankers plead with Trump: Fix small business rescue planFrustrated bankers today directly appealed to Trump to fix problems with a Small Business Administration system that is holding them back from issuing $350 billion in government-backed loans designed to avert mass layoffs during the coronavirus pandemic The screwover of small businesses by Congress was clearly intentional.

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