Is The US Economy Moving In The Right Direction? Trump Signs PPP Extension For Small Business Coronavirus Relief

President Trump on Saturday signed an extension of the Payroll Protection Program (PPP) as the U.S. economy faces renewed lockdown measures due to the ongoing coronavirus outbreak. PPP loans help small businesses retain their employees, with the program having been established under the $2 trillion CARES Act stimulus package passed in March.

The legislation extends the June 30 deadline for applications to Aug. 8. About $130 billion of the $660 billion allocated to the program still remains for eligible businesses in need of financial support.

Trump signed the bill after the Senate reached a last-minute deal late Tuesday.

During its rollout in April, the PPP drew controversy when restaurant chains such as Shake Shack and Potbelly Sandwiches took loans from the program. After backlash, both chains returned their PPP funds. House Democrats are also currently investigating whether the PPP “has favored large, well-funded companies over struggling small businesses in underserved communities — contrary to Congress’ clear intent.” Some lawmakers have called for more transparency on which businesses received PPP funds.

“We want to make sure the money gets out, and we also want to make sure those who really need it get the funds,” Sen. Ben Cardin, D-Md., the top Democrat on the Senate Small Business Committee, said on Tuesday.

The PPP extension comes as coronavirus cases spike in sunbelt states such as Texas, Florida, California and Arizona. California Gov. Gavin Newsom has closed down all indoor businesses in 19 counties, while Arizona Gov. Doug Ducey has shut down bars, gyms, movie theaters and water parks for at least 30 days to prevent the spread of the virus. These closures could result in more demand for PPP funds, as small businesses struggle due to the lockdown measures.

In June, 4.8 million jobs were added, with unemployment dropping to 11.1%, according to a report from the Department of Labor. The report showed figures from mid-June, prior to the resurgence of the virus and the reclosure of businesses in many states.

Congress is expected to negotiate another stimulus package later in July. President Trump has advocated more stimulus checks for Americans, while Treasury Secretary Steven Mnuchin has said more stimulus money should be allocated to industries that have been hard-hit by the pandemic.

Trump and his top economic adviser Larry Kudlow have touted consumer confidence as a sign that the economy is moving in the right direction despite a consumer-sentiment survey in late June by the University of Michigan showing a dip from 78.9 to 78.1, which was the lowest level of Trump's presidency.

“Consumer confidence in the country began to drop again in mid-June, most pronounced among high-income households,” said John Leer, economist for Morning Consult. “A reopened economy won’t be effective without spending from those who have more discretionary income.”

A POLITICO/Morning Consult survey released Wednesday showed 63% of voters want the government to address the spread of the coronavirus over the economy.