You would never know it from the media, but the Treasury Department has been doing an excellent job rolling out millions of emergency relief payments and loans authorized by the CARES Act. Despite constant criticism, Treasury Secretary Steven Mnuchin and his team at the Treasury deserve a great deal of credit for getting billions of dollars of stimulus payments and small-business loans out the door much faster than has ever been done in the past.
The Treasury, working with the IRS and the Small Business Administration and with most federal workers working from home, has launched two of the largest emergency relief efforts in our history with remarkable speed. Only one week after Congress passed the stimulus bill, the Treasury launched the small-business paycheck protection program, which quickly provided 1.6 million loans to small businesses, helping 30 million people. About 1 million of these loans went to small businesses with fewer than 10 employees.
Within two weeks, the Treasury and the IRS started sending out the economic stimulus payments, and, within days, 88 million people received $158 billion in payments. Millions of additional payments are being distributed every week. This distribution of payments was much faster than the Obama administration’s payment of stimulus checks in 2009, when it took three months to begin distributing the first checks and another three months to deliver them all.
Yet, the media has been criticizing the Treasury’s efforts since before the first loan was even made. On the day before the small-business loan program began, the New York Times wrote that the program was “a mess” and predicted “a rocky start.” Two days after the loan program began, the Washington Post wrote that the administration “had stumbled” in implementing the new law and that the loan program was off to “a rocky start.”
Over the next few weeks, the media wrote dozens of critical stories, many charging that most of the loans were made by big banks to their big-business friends. In fact, 5,000 lenders have participated in the loan program, and 60% of the loans were made by smaller banks with assets of $10 billion or less. To put that into perspective, there are more than 100 banks with assets over $10 billion, and the biggest banks have more than $1 trillion in assets.
The media has also focused on a number of public companies that received $600 million in loans. But these loans amount to less than 1% of the total $349 billion in loans committed through April 16. Looking at all of the loans, the average loan size was $206,000, and 74% of the loans were under $150,000. Only 4% of the loans were for $1 million or more.
Now that Congress has authorized more funding for the program, millions more small businesses and their employees will be getting paycheck protection program loans and will be benefiting from this program. At the same time, millions of people are receiving their economic stimulus payments. There have been some glitches, but the size and scope of these two programs is unprecedented, and the Treasury Department deserves credit for getting them up and running so quickly to provide emergency relief.
Bruce Thompson was assistant secretary of the treasury for legislative affairs during the Reagan administration and director of government relations for Merrill Lynch for 22 years.
