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Mnuchin Wants PPP Extended With Restrictions for New Relief Bill

Posted on July 20, 2020

The Trump administration is advocating a reauthorization of the Paycheck Protection Program (PPP) in Congress’s next relief package to allow businesses to get a second loan, according to Treasury Secretary Steven Mnuchin

The small business loan program is set to expire in August but still has over $130 billion in funds available as of July 10. Mnuchin testified at a July 17 House Small Business Committee hearing that the administration would like to see money added to the existing funds and given to businesses that need it the most. 

“A next phase of relief should extend the PPP, but on a more targeted basis for smaller companies and those that are especially hard hit, such as restaurants, hotels, and other travel and hospitality businesses,” Mnuchin said.

Mnuchin said he doesn’t believe that any specific industry should be targeted to receive second payments. Rather, the next phase should include a test to ensure that the money goes to businesses that have had a significant decline in revenue, he said. 

The new restrictions should also limit the size of the businesses allowed to receive a second payment, but the program should remain largely the same, said Mnuchin

“We have a program that works,” Mnuchin said. “We try to keep as many parts of the program consistent. We allow a second check, and we put a limitation on a revenue decline and a size.” 

A second PPP loan for businesses already has bipartisan and bicameral support. Democrats in both the House and Senate introduced the Prioritized Paycheck Protection Program Act (H.R. 7241, S. 4014) in June, which would allow for a second round of loans, and Sen. Marco Rubio, R-Fla., told Tax Notes July 15 that a second PPP plan was in the works. 

The administration will be working with the House and Senate in the coming weeks to determine the specific numbers regarding business size and revenue decline that will be included in the bill, said Mnuchin

Conflicts of Interest 

The next bill may also include restrictions to prevent conflicts of interest among PPP loan recipients after businesses tied to the Trump family came under fire for applying for millions of dollars in loans, according to reports from ProPublica

Mnuchin testified that he didn’t know if businesses connected to the administration took PPP money, but emphasized that Congress didn’t place restrictions on who could accept the loans. 

“If Congress wants to put back in the conflict rules, we’re more than happy to work with Congress,” Mnuchin said.

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