WASHINGTON – Sen. Marco Rubio rejects President Donald Trump’s characterization that federal efforts to help small businesses survive the coronavirus crisis have been “flawless,” but the Florida Republican said the situation is improving and Congress should approve at least $200 billion more to meet a continuing “stampede” of demand.
Rubio, who chairs the Small Business & Entrepreneurship Committee, told USA TODAY in an exclusive interview Tuesday that problems with the rollout of the Paycheck Protection Program were to be expected given the sheer scope of the $349 billion loan program administered by a Small Business Administration that usually process one-tenth of that amount annually.
“No one’s ever done one of these before,” Rubio said. “There’s not a banker in America that’s ever given out a PPP loan until Friday. There isn’t anybody at the SBA that’s ever authorized a PPP loan until Friday. This Is not the same as a a pre-existing system that isn’t working well. This is completely brand new and built in six days.”
The former presidential candidate and Trump confidant has not been shy in recent days about criticizing aspects of the program.
He’s called out lenders whom he thought were taking advantage of the crisis and tweeted about the PPP’s bumpy rollout in which banks have struggled to handle a massive surge of applications for forgivable loans aimed at helping small businesses keep workers on staff and pay other bills.
Rubio’s remarks about the program are part of a a question-and-answer session with USA TODAY that’s been lightly edited for clarity:
USA TODAY: Why support another $200-$250 billion for the PPP when about $275 billion remains untapped?
Rubio: Whatever’s not spent will revert back to Treasury. What I don’t want us to continue to do is have to come back for more. What’s happened in the first few days is you have a stampede going on at banks and other lenders with small businesses afraid to get shut out before the program runs out of money, so we want to take away some of that anxiety.
Q: There have been complaints about confusing federal directives, technical glitches and aggressive lenders which you’ve pointed out.
A: The problem with the roll out is to be expected, frankly. It’s doing better than it did yesterday. It did better yesterday than it did Friday. There’s more clarity every single day on how the program works.
Q: Shouldn’t the problems with the program be fixed before seeking more money?
A: At the pace it’s at now, given the demand that’s out there and the commitments that have been made, this is certainly going to hit its number very soon. Frankly, the more money going out, the more the program’s working. No one ever said it was going to be seamless.
Q: What has been the problem from the financial side?
A: Most banks and lenders that do SBA work have a few people on hand that do it on a regular basis. They’ve had to train additional staff not to mention train them on a new program. And there were some questions that need to be answered about how to calculate payroll. The bigger challenge is the capacity issue. The more people are hitting the system, the more it will slow down.”
Q: So how do you increase capacity?
A: The key is to bring in new lenders. Square. Paypal. They want a part of this they want to get involved. There’s significant interest among financial technology companies and non-bank lenders and that will really increase capacity. But it’ll also push the utilization, meaning we’ll run out of money even faster.
Q: The president’s called the rollout of the PPP ‘flawless’ and that the ‘minor’ glitches have been corrected. You agree?
A: I don’t think we should claim it’s been flawless and that glitches were minor, but they’re not insurmountable and there’s nothing you can’t solve.The key is whether each day the number of glitches diminishes as you identify them and you work through them.
Q: Are you satisfied with the pace those glitches are being fixed?
A: You can always do better. But I can tell you I’ve gotten (Treasury Secretary) Steve Mnuchin on the phone directly any time I want. And usually within 24-36 hours, whatever it is we’ve talked about, there’s action being taken.
Q: What would you like to see in the next stimulus, what’s being called ‘Phase Four’?
A: Phase Four is probably going to be a series of measures to bulk up a lot of what we did in Phase 3. The recovery phase and the rebuilding phase is difficult to construct until you have a complete damage assessment, and we’re not going to have a complete damage assessment for some time.