On The Money: Recipients of PPP loans face big decision | Fed chair: US economy will rebound from coronavirus, but not by end of 2020 | White House adviser says fourth stimulus package may not be necessary
Happy Monday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Recipients of PPP loans face big decision on Monday: Businesses that received coronavirus-related emergency loans from the Small Business Administration’s Paycheck Protection Program (PPP) face a Monday deadline of whether to keep the money, and all the restrictions that come with it.
- The main concern among companies is that the Treasury Department’s shifting terms for forgiving the loans might leave them high and dry. Others are worried they will face blowback, from workers or the general public, for having taken the loans in the first place.
- The midnight deadline marks the point of no turning back for participants in a program that’s been plagued by confusion and allegations of favoritism on both sides of the aisle.
“This critical program has had a bumpy rollout. The decision to make some large businesses pay back the loans was based on buyer’s remorse from Congress,” said Paul Winfree, who directs economic policy at the conservative Heritage Foundation. The Hill’s Niv Elis has more here.
Read more on the PPP: Mnuchin said Monday that the administration is working on expanding the loan period for the Paycheck Protection Program to give small businesses more time to spend the funds.
LEADING THE DAY
Fed chair: US economy will rebound from coronavirus, but not by end of 2020: Federal Reserve Chairman Jerome Powell said in a Sunday interview that the U.S. economy is unlikely to return to its pre-pandemic strength before the end of 2020, but may begin gaining strength in the second half of the year.
In an interview with “60 Minutes” that aired Sunday evening, Powell warned that while the economy would recover, it may take until the end of 2021 for the country to fully rebound from the downturn caused by the coronavirus pandemic.
- “You really can’t put into words the pain people are feeling and the uncertainty they’re realizing, and it’s going to take a while for us to get back but I would just say this: In the long run, and even in the medium run, you wouldn’t want to bet against the American economy,” Powell said.
- Powell added that a full recovery would depend how soon people could feel confident gathering in close spaces, which may take until an effective COVID-19 vaccine is widely available.
“The parts of the economy that involve people being in the same place very close together, those parts of the economy will be challenged until people feel really safe again,” Powell said.
I have more on Powell’s comments here.
White House adviser says fourth stimulus package may not be necessary: White House economic adviser Kevin Hassett said Monday that a future stimulus package may not be needed to address the economic damage caused by the novel coronavirus pandemic.
“I think it’s possible that we will see a strong-enough economy that we don’t need a phase four,” Hassett told reporters at the White House.
Hassett, echoing other White House officials, said the administration is currently in a “wait and see” mode to assess the full impact of previous stimulus legislation on the U.S. economy before resuming formal talks on the next package.
His remarks come as a number of states gradually reopen businesses amid the pandemic, which has resulted in a massive spike in unemployment as a result of closures aimed at preventing the spread of the coronavirus. The Hill’s Morgan Chalfant has more here.
GOOD TO KNOW
- The Treasury Department said Monday that it is starting to deliver nearly 4 million coronavirus relief payments to taxpayers via prepaid debit card, rather than by paper check.
- Energy Secretary Dan Brouillette is accusing major U.S. banks of discriminating against the oil and gas industry, comparing their refusal to finance Arctic drilling projects to tactics used to prevent minorities from buying homes.
- The Treasury Department has yet to disburse any of the $46 billion Congress allocated for airlines, according to a congressional oversight report released Monday.
- Lawmakers on Monday introduced bipartisan legislation that would prohibit the use of federal funds to purchase airport equipment made in countries that may pose a national security threat to the United States, such as China.
- Uber is laying off another 3,000 employees as the coronavirus pandemic cuts into demand for its services, the company announced on Monday.