Most notably, they removed the requirement that borrowers who wanted their loans canceled maintain their pre-pandemic tally. And they cut the percentage of the loan borrowers wanting forgiveness had to spend on payroll, to 60% from 75%.
This allowed business owners to spend more money on rent, utilities, and other expenses. (Some of those payments, in turn, have bolstered other industries: Analysis from last year found that Paycheck Protection Program money reduced commercial mortgage defaults.)
Of the roughly $510 billion the program lent in 2020, a maximum of $175 billion, or about 34%, went to pay workers who would have lost their jobs, Dr. Autor’s team found. Money that didn’t specifically preserve jobs was actually a boon to business owners – by and large a wealthy bunch.
“This program was very, very regressive,” Dr. Autor said, using the term economics to refer to policies that favor the wealthiest.
Lawmakers from both parties have backed the Paycheck Protection Program — it was created during the Trump administration and doled out an additional round of funding after President Biden took office — in part because every district in the Congress is filled with entrepreneurs like Ms. Kelly.
Senator Marco Rubio, a Republican from Florida, speaks enthusiastically about Island Grove Wine, a winery and wedding site that the pandemic has turned into “a money pit,” in the words of its owner. Rep. Carolyn Bourdeaux of Georgia, a Democrat, praised the program for giving local mainstays like the Aurora Theater, an arts venue, “the resources they need to get back on their feet.”
And Rep. Steve Chabot, a Republican from Ohio, brought Dr. Rich Coleman, owner of Four Paws Animal Hospital, to a House hearing. Dr. Coleman testified that the program allowed his 34 employees “to go home every night knowing they could pay their rent, feed their families and, most importantly, feed the massive amounts of pets which they possess”.