Washington, DC – Congresswoman Jackie Speier (CA-14), sent a letter today to Treasury Secretary Steve Mnuchin and Administrator Jovita Carranza of the Small Business Administration (SBA) requesting additional information on the dispersal of Paycheck Protection Program (PPP) funds. The April 16 SBA report on PPP loan dispersal raised questions over how funds were being allocated to states. According to a Bloomberg analysis, California ranked 50th in a state-by-state comparison of funds received for eligible payroll costs. In California, only 38 percent of the state’s eligible payrolls will be covered compared to Texas’ 58 percent.
Congresswoman Speier’s letter states, “In a basic comparison of the two states, California is economically larger, more populated, and has a higher number of coronavirus cases. In 2018, California’s economic output was nearly $3 trillion and the fifth largest in the world. Comparatively, Texas’ economy was valued at $1.8 trillion – over $1 trillion less. A record 2.8 million California residents applied for unemployment benefits with 1 million sign-ups occurring in the span of just one week. Over the past month, a total of 1 million Texans applied for unemployment benefits.
PPP loans were created to help businesses that have suffered financially as a result of the coronavirus outbreak because of stay-at-home orders. California experienced some of the earliest known cases of COVID-19 and subsequently was the first state to implement a stay-at-home order. Although California’s statewide order was formally announced on March 19, over 21 million of the state’s 40 million residents were already under some form of stay-at-home order at the local level. Business owners will attest that every day that local and state economies are shut down is another major blow to the business’ chance of survival. For that exact reason, Texas’ stay-at-home order was not effective until April 2.
California took such immediate and drastic actions because it is one of the hardest hit states by the coronavirus. California was an early hotspot and currently has 30,333 cases. By comparison, Texas has 19,458 cases of COVID-19. Considering all these factors, it is logical to believe that California would receive an appropriate portion of PPP loans. The available demographic and public health data do not discernibly indicate the rationale for Texas receiving over 21,000 more individual loans compared to California.”
As Congress votes to pass an Interim Relief Package, which includes an additional $310 billion for the Paycheck Protection Program, transparency regarding SBA’s loan allocation process becomes even more urgent. California residents have a right to know whether they are being shortchanged. Many residents’ trust in this Administration has eroded given President Trump’s record of singling out the state for criticism. Californians should feel confident that the federal government is doing everything it can to support them during this historic crisis.
A copy of the letter is attached to this press release.
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