Department Treasury

Treasury Department could upsize airline loans as Delta, Southwest opt out, freeing up funds – CNBC

A member of a ground crew walks past American Airlines planes parked at the gate during the coronavirus disease (COVID-19) outbreak at Ronald Reagan National Airport in Washington, U.S., April 5, 2020.

Joshua Roberts | Reuters

The Treasury Department on Tuesday said airlines could receive larger federal loans than previously expected after some carriers opted out, freeing up more funds in the program.

Congress in March approved $25 billion in federal loans for U.S. passenger airlines to help them weather the coronavirus pandemic, which has kept air travel demand at roughly 30% of last year’s levels.

Despite preliminary agreements, Southwest Airlines and Delta Air Lines have said they ultimately don’t plan to pursue the loans, thanks to other sources of financing. Delta, for example, earlier this month said it was able to upsize a debt sale backed by its SkyMiles frequent flyer program to $9 billion from the $6.5 billion it planned.

Airlines have until Wednesday to decide whether to take the federal loans.

Seven airlines —  Alaska, American, Frontier, JetBlue, Hawaiian, SkyWest and United are planning to take the loans, the Treasury Department said.

American last week said it secured $5.5 billion from the program, more than the $4.75 billion it had expected to receive. The Fort Worth-based carrier said it expects it will have up to $7.5 billion available, the maximum amount for a single carrier.

U.S. passenger airlines also received portions of $25 billion in payroll support, mostly grants, from the government. Those funds prohibit carriers from cutting jobs until Oct. 1, but in just hours, the airlines, mostly American and United, plan to cut more than 30,000 jobs.

Airlines and their labor unions are urging Congress for an additional $25 billion that would preserve sector jobs through March 31. That proposal has won support from a bipartisan group of lawmakers as well as from the Trump administration and was included in a new $2.2 trillion national coronavirus relief package House Democrats unveiled on Monday.

“We call on Congress to extend the Payroll Support Program so we can continue to support aviation industry workers as our economy reopens and we continue on the path to recovery,” Treasury Secretary Steven Mnuchin said in the statement.

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Treasury Dept. to disclose details on small business loan recipients | TheHill – The Hill

The U.S. Small Business Administration (SBA) and Treasury Department announced Friday that they will provide data regarding which businesses borrowed money from the taxpayer-funded Paycheck Protection Program (PPP) after previously saying the names of the firms would not be released.

The disclosure will apply to companies that received loans of more than $150,000 from the program. Firms that got less than $150,000 will not have their names revealed. 

“We value transparency and our fiduciary responsibility to ensure American taxpayer funds are used appropriately. This responsibility goes together with the steps we are now taking to provide needed public information while protecting entrepreneurs’ personally identifiable information, such as a home address associated with their business loan,” said SBA Administrator Jovita Carranza.

The announcement comes after weeks of negotiations with members of both parties in Congress who clamored for more transparency over how PPP funds were disbursed. The arrangement appears to mark an agreement that will disclose the names of most, but not all, loan recipients. 

“I am pleased that we have been able to reach a bipartisan agreement on disclosure which will strike the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors,” said Treasury Secretary Steven MnuchinSteven Terner MnuchinTreasury Dept. to disclose details on small business loan recipients On The Money: Treasury, SBA to disclose small business loans of 0K and above | Apple closes stores in states with spikes in coronavirus cases | Artists call on Congress to help club and concert venues during pandemic Our economy is only as strong as our small business community MORE.

The Trump administration has flip-flopped over PPP transparency — the SBA initially said earlier this year that it would release “individual loan data,” but Mnuchin pushed back on that in a Senate hearing this month, saying that business names and loan amounts would remain hidden because the administration considered them proprietary.

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Treasury Secretary Mnuchin, Fed Chairman Powell to face Senate grilling on stimulus programs – CNN

Washington (CNN)Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will give their first report on the economic stimulus programs implemented by the $2.2 trillion CARES Act when they testify before the Senate Banking Committee on Tuesday.

The hearing comes on the heels of a report from the new Congressional Oversight Commission that found the Treasury Department has spent little of the $500 billion Congress specifically appropriated for lending to businesses and state and local governments. That includes $46 billion for the airline industry, none of which has been lent so far.
Congress passed the CARES Act aid package about two months ago. It was meant to help support the economy and help people pay their bills as stay-at-home orders shuttered businesses. More than 36 million people have lost their jobs since the middle of March.
Powell and Mnuchin could face questions on the small business lending program, the direct stimulus payments Treasury is sending out to about 150 million Americans, as well as the central bank’s Main Street lending program for small and mid-sized businesses.
Lawmakers are currently considering changing some parts of the small business program, known as the Paycheck Protection Program. The loans are forgivable as long as 75% of the money is spent on payroll. But business owners are having trouble bringing workers back before the eight-week deadline. A bill passed by Democrats in the House on Friday would extend the time period to 24 weeks, but the proposal has little chance of passing the Senate.
The Paycheck Protection Program — which operates on a first-come, first-served basis — also drew criticism as some large companies received loans while mom-and-pop shops were kept waiting.
Some of them, like Shake Shack and the Los Angeles Lakers, have given the money back.
Mnuchin is expected to tell the Senate committee that 4.2 million small business loans have been made for a total of more than $530 billion, according to his prepared testimony.
He will also say that 140 million stimulus payments have been sent directly to Americans, for a total of $240 billion.

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