WASHINGTON — A year after Congress created the Paycheck Protection Program, taxpayers don’t know how many jobs were saved by the nearly $1 trillion in forgivable loans issued to businesses during the pandemic.
And economists and government watchdog groups say they likely never will — because the government didn’t count.
The PPP was pitched as a way to save millions of jobs threatened during the COVID-19 recession. But the Small Business Administration under Trump — and now under Biden — hasn’t tracked figures on jobs that were saved, despite a legal requirement to do so.
“No one will actually know except for the recipients whatever happened with the loan and with the jobs,” said Sean Moulton, senior policy analyst at the government watchdog group Project on Government Oversight.
The SBA’s initial estimate of 50 million jobs “supported” by the PPP was quickly dismissed as wildly inaccurate. Treasury Department economists place the number closer to 19 million, while economists studying the program estimate between 2 million and 5 million.
More than 8.7 million forgivable loans worth $961 billion have been made so far. And President Joe Biden just signed a two-month extension, allowing the SBA to accept applications for $79 billion in loans through May 31. SBA officials told Congress they expect the money to be exhausted by the end of April.
But now a program that was originally promoted as a way to save millions of American jobs appears to have done far more to help the businesses and their owners, early economic studies suggest.
Thousands of businesses, including some that received $10-million PPP loans, reported having preserved no jobs at all with the assistance, according to the SBA. In other cases, PPP recipients used the two or three months of payroll support to simply postpone layoffs.
Nearly 19 million are currently collecting unemployment insurance benefits. Because nearly half of American workers are employed by a small business, knowing whether the program was successful could be key to understanding how long the country’s economic recovery will take.
When it launched in 2020, the PPP exhausted $349 billion in just 13 days. It was quickly anointed one of the most successful pandemic-relief programs — until questions arose about whether all recipients really needed the money and some high-profile names, like the Shake Shack hamburger chain and the Los Angeles Lakers, returned their loans.
Under the law, Congress required the SBA to collect and make public quarterly data from all businesses that received more than $150,000, including how many jobs were affected by the loan and the company’s estimated economic growth.
In April 2020, just days after the program began issuing loans, the Trump administration’s Office of Management and Budget instructed the agency not to ask loan recipients to report back on the estimated number of jobs created or retained.
The OMB said that “centrally available economic data” would provide sufficient information to produce the report.
Its memo did not say where that data would come from, how it would be verified or why it did not want the businesses to provide the information.
The result was a mishmash of data. Some businesses voluntarily listed the employees that would be supported with the money, others declined. Dozens have said the data released by the SBA doesn’t accurately reflect their number of employees or what they listed on their applications.
