By: Sal Nuzzo
September 10, 2020
After negotiations stalled before Congress packed up for its August recess, Washington is now ready to resume discussing the terms for the nation’s next coronavirus relief package. With unemployment in Florida recently rising to 11.3-percent and small businesses around the state feeling the stress, it might seem that the new bill cannot come a moment too soon. However, a lot is at stake for this fifth and likely final relief package. Providing effective relief is far more important than providing it fast.
When Congress first began deliberating COVID assistance in early April, the James Madison Institute joined a coalition of 30 other public policy advocacy organizations in calling for accountability within the legislative branch’s COVID relief package. We asked Congress to remain guided by some good governance principles, including emphasizing meaningful transparency, avoiding the temptation of creating special and crony benefits, and accounting for all COVID-related spending. Unfortunately, these principles largely went ignored.
The lack of transparency in the last relief packages has caused far too many dollars meant for needy Sunshine State residents to fall into the wrong hands. Recently, one Florida resident illegally used hundreds of thousands of dollars from the Paycheck Protection Program to purchase a Lamborghini, according to news reports. In early August, the Department of Justice also charged nine Floridians for conspiring to take part in a $24 million COVID-19 relief fraud scheme. And these are just the individuals have been caught. There’s no telling how many others have gamed the system without consequence at the expense of Florida’s most vulnerable and in need.
Another key principle we asked the federal government to consider for COVID relief is avoiding the temptation of special benefits. We stated that the crisis did not pick favorites between businesses of given sizes, so neither should the relief funding.
It hasn’t worked out this way. While businesses owned by the wealthy and well connected have raked in millions from the PPP programs, companies like the Sequa Corporation, a Florida-based defense company that employs over 3,000 people, do not qualify for aid.
Sequa’s exclusion is particularly egregious as its operations are critical to adequately equipping the men and women in uniform. It ensures that aircrafts, ships, and tanks remain safe, secure, and operational for the Air Force, Navy, and Army.
Something is clearly wrong when a who’s who list of wealthy interests, from Kanye West to the Soho House to Chinese defense firms, have received relief funding, but Florida-based companies that are essential to the U.S. military remain shut out.
The arbitrary rules and qualification standards that have defined the nation’s COVID relief up until this point represent the height of government hypocrisy and inefficiency. They have created unlevel playing fields that have negatively comprised the security of far too many companies and state employees. Congress must correct them as it moves forward with its next bill.
The last, and perhaps most important, principle we outlined in our letter is the necessity for Congress to account for all its COVID-related spending. The legislative branch has already spent over $2 trillion and counting on pandemic-related relief. While our representatives may not have time to offset this new federal spending immediately, the imperative to act quickly should not prevent them from guarding against unnecessary long-term costs.
The national debt is already at $26 trillion, and it continues to rise. Failing to account for all COVID spending will only create a new economic crisis from arising in the future – one that will treat families and businesses even less kindly than the current recession. The federal government can do so by creating a website for tracking spending in an emergency assistance account for the pandemic.
Florida families and businesses are counting on the government implementing this new COVID package effectively. To protect their interests, our lawmakers to learn from the mistakes that they made during the rollout of the previous COVID bills and act accordingly.
Sal Nuzzo is vice president of policy at the James Madison Institute.