In the News

Spending Overseers Are Sidelined as Stimulus Checks Roll Out

InvestorsHub
04/18/2020

The federal government is spending $2.2 trillion to aid American businesses and households in response to the coronavirus outbreak. But efforts to keep an eye on how the money is being spent are off to a slow start, in part because of the pandemic itself.

As the Trump administration distributes checks, loans and grants, Congress is out of Washington indefinitely, delaying the formation of oversight panels and the confirmation of an inspector general. Lawmakers can't call public committee hearings to question administration officials about the pandemic response, instead conducting business by letter and conference call.

"We can have briefings electronically, but it's just as awkward as anybody else's attempts to do business by Zoom," said Rep. Jamie Raskin (D., Md.), a member of the House Oversight Committee. "Now we're going to try to do oversight over trillions of dollars being spent in completely new ways and in extraordinary contexts."

Congress uses its oversight powers to monitor federal agencies and the spending of taxpayer money, holding hearings in the past year on matters from fuel-efficiency standards to e-cigarette policy. Several parts of the coronavirus-aid rollout have proven controversial, such as access to small-business aid and the conditions on airline grants, but lawmakers have limited means to press the issue in a public forum.

"It's not uncommon that Congress delegates a lot of power to the president during emergencies," said Joshua Huder, a senior fellow at Georgetown's Government Affairs Institute. What makes this situation different is that Congress isn't in town. "When you literally do not have meetings and you don't have the physical presence of chairs...then oversight gets pushed behind closed doors," he said.

In the wake of the financial crisis in 2008, Congress created mechanisms to oversee the federal bailout of banks. Similarly, in the economic stimulus bill President Trump signed into law last month, Congress created ways to oversee the money that will be sent to shore up businesses in the sudden economic downturn, including airlines and hotels. But the measures have faced delays.

The law set up a five-member oversight commission to examine how the government disburses $500 billion in aid to businesses, states and municipalities -- primarily through Federal Reserve emergency-lending programs -- and later how the recipients spend it. Each party leader in Congress gets to name a person to the panel, with Senate Majority Leader Mitch McConnell (R., Ky.) and House Speaker Nancy Pelosi (D., Calif.) selecting its chief together.

Four members have been named. Bharat Ramamurti was selected last week by Senate Minority Leader Chuck Schumer (D., N.Y.). On Friday, House Minority Leader Kevin McCarthy (R., Calif.) selected Arkansas Rep. French Hill, a former senior Treasury Department official; Mr. McConnell named GOP Sen. Pat Toomey of Pennsylvania; and Mrs. Pelosi named Democratic Rep. Donna Shalala of Florida. The leader of the commission hasn't been selected.

Mr. Ramamurti, who was a top economic adviser to Sen. Elizabeth Warren (D., Mass.) during her presidential campaign, said he is moving ahead with the work of the commission, which has a report due in May. He has been posting questions on Twitter, and wrote an opinion article Thursday questioning whether loans to businesses would help workers or instead flow to executives and investors.

"It's important to demystify the process," he said in an interview.

Another body, the Pandemic Response Accountability Committee, made up of inspectors general from several federal agencies, will be responsible for oversight of outlays for the entire bill. Mr. Trump removed the person originally selected to head the panel, Glenn Fine, from his post as acting inspector general of the Defense Department without giving a reason. That dismissal effectively removed him as well from the new committee, which hasn't named a new head.

The aid law also calls on the president to nominate a special inspector general for pandemic recovery, or SIGPR, who will focus on overseeing the Treasury Department's allocation of loans, loan guarantees and other expenditures. Mr. Trump last week nominated Brian D. Miller, a White House attorney, who must be confirmed by the Senate.

The Treasury, which is facilitating much of the economic relief established under the bill, has created a website with information about the various programs, including eligibility criteria, application forms and guidance for businesses.

Administration officials say the aid is flowing as designed. Households started receiving stimulus payments this week, and a small-business loan program meant to keep workers employed has seen heavy demand, exhausting its fund Thursday. Officials at the Treasury and Small Business Administration, which scrambled to set up the $349 billion Paycheck Protection Program program, provided periodic updates on participation in the program before releasing a more comprehensive report Tuesday on loan size and approvals by state and industry.

It isn't yet clear how the government will share information on transactions with specific businesses, such as passenger airlines. The bulk of the funds provided to the Treasury -- $454 billion -- will be used to cover losses on Fed lending facilities. In that case, detailed information is likely to come from the central bank, which is required to disclose transactions to Congress within seven days and provide regular reports each month.

On Capitol Hill, several committees have sent letters to agencies about the stimulus bill and its implementation, and in some cases conducted conference calls. House Ways and Means Committee Chairman Richard Neal (D., Mass.) pushed the Treasury Department to make it easier for people who receive Social Security to receive the direct payments. The Treasury Department later amended its original plan.

Mr. Neal and Senate Finance Committee Chairman Chuck Grassley (R., Iowa) last week wrote to the U.S. International Trade Commission chairman to call for an expedited investigation to identify foreign products that may be needed to respond to the pandemic.

Republican lawmakers are largely backing the president's response to the pandemic. Many of them are criticizing Mrs. Pelosi for not bringing the House into session or figuring out alternative ways to gather, and lawmakers of both parties are pushing leadership to conduct more procedures remotely, with no success. Residents of Washington are under a stay-at-home order until May 15 and many lawmakers are under similar orders from governors across the country.

"Why couldn't we do committee hearings sitting every other chair?" said Ohio Rep. Jim Jordan, the top Republican on both the Oversight and Judiciary panels. He would like to investigate the World Health Organization's response to the crisis but said Democrats would likely mount other investigations he considers unnecessary.

Democrats, meanwhile, see Mr. Trump holding a press conference every day and want to respond in a meaningful way with hearings and legislation.

"We have ceded so much of the field to the president and he is running amok," said Rep. Jared Huffman (D., Calif.).