The Breakdown: What Went Wrong with COVID Relief - YouTube

"CONSIDERS A TRILLION-DOLLAR STIMULUS TO RESCUE THE ECONOMY."

"$3 TRILLION STIMULUS PACKAGE. THIS WOULD BE THE LARGEST IN HISTORY."

"PRESIDENT TRUMP SIGNED INTO LAW THE LARGEST ECONOMIC AID PACKAGE IN HISTORY..."

We know that the government is spending an unprecedented amount of money on relief during the pandemic.

But do we know where this money is going?

Who is receiving it?

And what is it being used for?

Let's break it down

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In 2020, Congress passed five major bills on  COVID-19 emergency spending and relief.

Altogether, Congress has authorized at least $3.5 trillion in relief spending so far.

SEAN: And that really is, I have to say, unprecedented.

And I'm not trying to make it sound like it's unwarranted,

this is a very massive crisis unlike anything we've ever seen before,

but that level of spending just dwarfs anything we've done before.

That's Sean Moulton.

He's a senior policy analyst at POGO who helped build a prototype for the main federal spending tracker in the United States, usaspending.gov.

He's also been tracking the government's coronavirus relief spending since March.

SEAN: And what we have found is that when you spend a lot of money very quickly, you can make mistakes and wind up wasting some of it.

But the other thing that we have seen is that

opportunistic people out there will come out of the woodwork knowing that you're spending so much money quickly,

and that maybe you're not looking at everything,

and they will try and defraud the government and take some  of that money to put in their own pockets  

and not to help with the process.

As a result, plenty of businesses received funds with little to no accountability.

"LOTS OF CELEBRITIES. LOTS OF INVESTMENT BANKS - "

RUTH'S CHRIS STEAKHOUSE. SHAKE SHACK - "

"THE CLOTHING BRAND OF KANYE WEST -"

"THESE GREEDY COMPANIES COME IN, AND THEY SHOULD HAVE BEEN STOPPED."

And that of course isn't what Congress intended.

But the administration came up short in following the CARES Act, the single largest relief bill authorized by Congress.  

The legislation laid out very specific reporting  requirements for the Paycheck Protection Program,

which was intended to keep small businesses afloat.

Congress mandated that companies that received more than $150,000 in assistance

must report back to the government on what they did with that money

SEAN: And unfortunately the administration looked  at that legal requirement and, "said we don't need to do this."

And they never set up a system to collect that information.

And to this day, it remains probably our biggest blind spot when it comes to the accountability around the COVID spending.  

On top of not knowing if this assistance  was effective, it also didn't go to those who needed it most.  

When Congress authorized billions of dollars in relief spending,

they recognized that some businesses would need more help than others. And that concern seems warranted.

This study later showed that Black business owners had a harder time getting federal aid from banks than white customers did.

So, to assist those who were already falling through the cracks of the financial system  

Congress specifically wanted the Paycheck Protection Program to address the needs of  

women, minority, and veteran-owned businesses.

However, multiple reports suggest that the administration didn't follow through.

This House report writes word-for-word that contrary to Congress's clear intent,

the Trump administration and many big banks  failed to prioritize small businesses in underserved markets.

Another report shows that large companies  received loans significantly faster than small businesses,

and to top it all off,

businesses that were already thriving during the pandemic got in on the action too.

SEAN: The money just seemed to be spent based on who got in line first,

and who got lined first were the people who had  the best relationships with banks and other financial institutions.

One of the things I really worry about isn't even that some of these smaller companies were at the back of the line,

I'm worried  they didn't line up at all.

It may be that because they didn't get the assistance, they're out of business.

That could be a real cost to not having done this better in the first round,

because there are real barriers that some of these really small businesses face.

Most of the aid from 2020 has already been spent, but more is likely on the way.

While it may seem easiest to move on  from past mistakes, we need to learn from them.

Because this pandemic and its effects on our  economy are far from over.

SEAN: We need to figure out what went wrong with 2020 money.

If we don't look back carefully at what we've done,

we run the risk of repeating those same mistakes.

And I know that there's an urgency, there are companies that are hurting,

but I can't stress enough that

when you spend money in the wrong places, it's as bad as not getting the money out to people.

It's the exact same thing.

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