WASHINGTON (Reuters) – Standing in front of half a dozen American flags at a press conference at his country club in Bedminster, New Jersey, President Donald Trump announced what has become a central part of his November re-election argument: the treatment of his administration of the economic downturn of the COVID-19 pandemic.
FILE PHOTO: US President Donald Trump takes a question as he addresses an East Room event with Paycheck Protection Program (PPP) loans for small businesses negatively affected by the outbreak of coronavirus disease (COVID-19), in the White House in Washington, USA, April 28, 2020. REUTERS / Carlos Barria / Stock Photo
“Through the historic relief package I signed into law, we are saving more than 50 million U.S. jobs,” he said in the August 15 comments. Referring to his Democratic opponents, he said, “They do not like this kind of numbers because they think it will hurt them in the elections.”
The estimate that the $ 660 billion taxpayer-funded Paycheck Protection Program (PPP) has saved some 51 million jobs has been trumpeted by the Republican Party, its leadership of Congress and the presidential election campaign. On Monday, Trump spoke out again at a rally west of Charlotte, North Carolina, side of the Republican National Convention.
However, the PPP has probably not saved 51 million jobs, or anywhere near them, according to Reuters interviews with economists and an analysis of the programme’s data. Half a dozen economists put the number of jobs saved by the initiative at just a fraction of 51 million – ranging from one million to 14 million.
“I do not think there is an economist who would say that the program has saved 50 million jobs,” said Richard Prisinzano, who was a financial economist at the U.S. Treasury Department for 13 years before leaving in 2017. His rough estimate, said Prisinzano, has been saved between five and seven million jobs, based on his own adjustments to the work of other researchers at MIT and elsewhere.
Officials in Trump’s own administration make several statements for the figure of 51 million. In interviews with Reuters, officials from the Treasury Department and the Small Business Administration (SBA), which oversees the PPP program, said the $ 51 million refers to the total number of workers reported by companies approved for a loan – not the number of jobs that were saved.
White House economic adviser Larry Kudlow gave some consideration in this interview with Reuters, saying he suspected the job numbers were the sum of all jobs at companies that received PPP loans.
“We have saved a lot of jobs, there is no question about that,” he said.
The PPP was part of some $ 3 trillion rescue measures adopted in the spring. At the time, there was not much debate that needed funding for small businesses because the economic shocks of COVID-19 hit the United States.
Since then, Congress Democrats have been challenging the data on the program, released by the administration in July. “We’ve seen some inaccuracies with the data in terms of how they calculate how many jobs were protected and saved,” New Jersey Democratic Representative Andy Kim said in August, who sits on the Small Business Committee.
An economist with the Conservative Heritage Foundation also questioned the figures. “This data does not tell us how many of those jobs might have existed without the PPP loans. In addition, everyone involved has an incentive to use inflated estimates, ”said Adam Michel, senior fiscal policy analyst at the foundation.
Michel, who did not analyze the data himself, cited the same study that former treasurer Officer Prisinzano did – a paper co-author of economists at the Federal Reserve Board of Governors, MIT and ADP Research Institute. That survey concluded that about 2.3 million jobs were saved by early June.
White House economic adviser Kudlow said the Treasury and SBA had access to the list of companies and bank loans, and they made the calculations.
“You had to set up the form how many employees you have when you apply for the loan,” he said. “I think they added them.”
NUMERICAL DISCREPANCES
The uncertainty about the $ 51 million figure was fueled by a discrepancy between the information the SBA asked lenders to collect from lenders and the information they asked the same lenders to enter into their loan processing portal.
The SBA only asked lenders to collect the number of employees from each loan, but when lenders subsequently processed the loan in the SBA portal, the agency also asked for the “number of jobs retained.” Lenders often place the number of employees in the “keep jobs” section of the portal, according to number of people familiar with the process. By slashing the figures in the other direction, some lenders allowed “jobs to be kept” low or at zero, people said.
Both the SBA and Treasury made officials available to talk to Reuters about the PPP on condition that they were not named.
The senior Treasury official said the $ 51 million figure was not just a sum of the total jobs at recipient companies; it was also supported by economic modeling. However, he added, “we can say with no certainty that all 51 million of them would have lost their jobs otherwise.”
Because the figure is not a number of jobs saved, the official added: “We have been careful to use the word ‘jobs reported’ or ‘jobs supported’ by the program.”
The SBA official confirmed that when lenders filled out their applications, they “provided exactly the number of employees. No jobs were retained.”
On August 21, a week after Reuters interviewed administration officials, the SBA added a note to the monthly loan figures, saying the SBA would mark data for comfortable reinforcement as reported jobs, not keeping jobs .
Also on August 21, the Small Business Administration reissued the full PPP dataset, fixing some of the issues that appeared when it was first released in July. But the data still had holes. About 84,850 loans for amounts at $ 150,000 or higher, had a zero in the column reported on jobs, or the column was left blank. That problem was applicable to about 13% of loans on that amount.
The administration will have to wait until companies apply for loan forgiveness to get a solid estimate of how many jobs have been saved, economists and officials said.
‘THE PRESIDENT JOBS’
Neglecting the numbers with the Trump campaign also remains difficult. Pressed for details on the 51 million figure Tuesday, spokesman Tim Murtaugh said of the campaign in an email that “the PPP protects American companies that employ 51 million Americans.”
This is different from what the campaign claimed on Twitter the day before (over here), when it posted a note saying, “President Trump’s protection program has saved 51 MILLION jobs.”
An animated “counter” quickly taps from one million to 51 million just below the message: “He’s the Jobs President and he’s fighting for you!”
Lawrence Delevingne reported from Boston; Chris Prentice, Michelle Price and Jeff Mason from Washington, DC Contributions were Koh Gui Qing from New York and Pete Schroeder from Washington, DC Edited by Tom Lasseter Julie Marquis
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