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tv   Washington Journal Nicole Clowers  CSPAN  July 7, 2020 11:29am-12:08pm EDT

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from were going down 30,000 to 25 to 20. we saw it flat then it goes up. >> are breathing from the white house on foreign affairs. insight from former administration officials. >> there is a line one should not cross where governmental power is used exclusively for personal benefit. >> we will stand proud and we will stand tall. >> the latest from the campaign 2020 trail. join in the conversation every day on our live call-in program, washington journal. if you missed any of our live coverage watch on demand on or listen on the go with the c-span radio app. we will talk about the spending of the covid-19 relief funds approved by congress over the past couple months. we are joined by the health care team manager, nicole clowers,
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for the government accountability office. guest: thank you for having me. host: tell us why the gao did this report. guest: the cares act passed in verch required us to ha oversight of the funding and activities of the federal government, specifically it requires us to provide oversight of the government's efforts to respond to and recover from covid-19. and it includes us assessing the impact of covid-19 on public health, as well as at the economy, as well as track the funding and use of the funding. the act requires us to report everything, starting 90 days after an accident, so the june report was our first report, and we will be issuing additional reports every other month. host: as soon as the legislation assigned, enacted and
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-- signed, the gao is monitoring? guest: absolutely, we are providing real-time oversight. we have experience doing this. going back over a decade ago, for example, under the lease program that provided assistance to the financial sectors after the global crisis, we were required to provide ongoing oversight and issue a report every 60 days. so, we have experience and we have built on that experience to hit the ground running to provide immediate oversight and ensure accountability and transparency of how the funds are being used. host: let's take a look at the numbers. trillion in spending. here are the figures on each package. ppp, paycheck protection billion.$670
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the stabilization fund at $500 billion. expanded unemployment insurance at $375 billion. economic impact payments, $282 billion. public health emergency funding, $232 billion. $150 billion from the cares act, the relief for state and local governments. of that total, how much has been spent already? guest: about $677 billion. that is what we found in our work and collection of data. unfortunately, the treasury has not released over all spending data yet. under omb guidance, agencies are re report on their ca spending, starting at the end of june. so we expect the overall spending data to be available starting probably at the end of july and august timeframe.
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in the absence of comprehensive data, we undertook our own efforts to collect what was out spending, so we collected information on the six largest areas you mentioned, as well as other federal agencies. and we got about $677 billion expended. -- spended. in $1.3 billion has been allocated. host: we are talking about the oversight of the relief funds, how that money is spent, with the gao's nicole clowers. we welcome your comments at (202) 748-8000 for eastern and central time zones. (202) 748-8001 for mountain and pacific. i have to imagine that keeping track of $2.5 million is hard enough, but what were the challenges of tracking $2.57
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trillion worth of spending? it is not all spent yet. and how much staff does it entail? guest: well, it is challenging providing real-time oversight, as you can imagine, as agencies are standing up programs. and they are figuring out how to toablish the programs, how track their own spending, and so that requires us to be agile and nimble and work with the agencies to keep opposite - - keep up-to-date. it requires us to work around the clock, frankly, detracted dollars, make sure we have a good understanding, so we can provide that information to policymakers and the public. host: what were some significant issues you found in the way the money is being spent? ne thing that we
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highlight in the report is program integrity issues, risk of improper payments or fraud. that stems from the fact of how quickly the programs were stood up. on one hand, the workforce should be applauded for how quickly they worked, they were working diligently as well to stand up the programs and get the funds out the door, for example with the stimulus checks, as while as the paycheck protection program. they worked quickly to stand up those programs. in doing so, there is a trade-off between getting funds out quickly and it standing up the programs quickly with ensuring appropriate safeguards in place. and we found in making this decision, there for some trade-offs in terms of
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safeguards. for example, in the paycheck protection program. one of the things that we noted in the report is that it relied on borrowers to self certified their eligibility. this means the funds going out the door quickly, but when you rely on self certification that raises the potential for fraudsters to take advantage of the program. host: how prevalent was the inue of fraud, in that case, the ppp, but also in the other measures you surveyed in your oversight? guest:guest: we are still doing work. we are looking at the issues of fraud and improper payments. our work would indicate that when you have programs of this size, the speed at which they are moving, it raises -- or it
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creates a high risk for program integrity issues. that is why we have raised a red flag and we have made recommendations in this area, for example with the paycheck protection program, we told them to identify the risks and addressed of them -- address them. with insurance, we made a recommendation for the department of labor to work with states to help address potential program integrity issues. and so we are making recommendations to help address these issues in real-time. that is the advantage of us reporting on an ongoing basis, we can make these recommendations and then they can be corrected, so the agencies can adjust and address the issues as we see them. policyn prevent future problems down the road. host: our listeners can read the
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report at if we can zoom into this brief timeline of the paycheck protection program, starting in march of 2020, basically through the end of june, now, and all the events happening, including the lapse and appropriations on april 16. and of the places where guidelines have been posted in this brief amount of time, and the total spent or the total appropriated for the ppp, which was initially $150 billion, correct? guest: the program was more than that. has --, the government havegh the banks, they provided 4.6 million loans, scheduling about $512 billion.
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and i think that that graphic you are higher leading is a good one. it shows the trade-off being made when you stand up programs quickly. the goal was to help get the money out quickly to the businesses, to help shore up their finances during the economic downturn. but there is a trade-off. and as the graphic illustrates, guidance theyhe were providing to the lenders and borrowers were -- as they were learning more about the program and adjusting rules based on the questions being asked. see evolvingyou guidance over the past couple toths, which has led confusion among the lenders and borrowers in terms of eligibility and loan
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forgiveness. host: we have some calls. tom is joining us from connecticut. good morning. caller: how are you doing? there ison is, i hope funding going toward a clear message. in the beginning they were using face masks, but the recommendation was not to wear them all the time. that has gotten straightened out. they have talked about distance. and then about wearing masks. crowd,somebody is in a talking or singing or whatever, people should not walk through that airspace for a moment, or for a little bit of time. there should be a coherent message and hopefully the funding to pay for it. host: more broadly on the messaging, what recommendations did you provide? or the gao provide for future spending?
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guest: i appreciate that. this goes to one of the -- in the report we identified a series of revolving lessons learned. the issues we identified from the government's initial response to covid-19, as well as lessons learned from past public health emergencies. and one of the lessons learned clear andd for consistent communication. it's important during a pandemic that the government speak with one voice. clear messages in terms of what the public needs to be doing. we highlighted some examples. for example, conflicting guidance on the size of gatherings that that should be allowed. on one day the cdc issued guidance, the next day the white
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house gave a different guidance. that creates confusion and it makes it harder for those people who want to follow the rules to follow the rules. we also highlighted, this is not a new concern, but we found problems with providing clear and consistent communication in past public health emergencies. for example, we cite during the 2009, thatic around there was inconsistent information going to the states, felt frustrated about the conflicting information from different agencies within the government. there was also inconsistent information about when a vaccine would be developed. a date was given, that came and passed. events, those types of when they happen, the government
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loses credibility, credibility is diminished. so it's important that the government be careful in terms of what it is reporting. and when facts and circumstances change, because of the virus is evolving, we are learning, we need to be clear about how and why the messaging is changing so that people fully understand. host: that report is at, opportunities to improve a federal response and recovery efforts. there are several tabs, including recommendations. so let's hear from frank in philadelphia. good morning. caller: hi. in a national emergency like this, i've always understood that the government was andonsible for jumpingi in taking care of everything, but it seems that the president has dumped this on the governors.
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and the governors are ending up -- and the states are being bankrupt by this pandemic. in the past, i thought it was fema or another organization that ultimately covered these costs. and to care of the matter. am i wrong? guest: it's a good question. it's a collaborative effort. at the federal level, certain agencies are responsible and they have lead on certain issues. you mentioned fema, fema plays a critical role. the department of health and human services, they are the lead of federal department for public health emergencies. and each of them plays a critical role. but in terms of different strategies and plans, over the years plans outline the
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governmental response, that it would require actions by the federal government, as well as state and local governments in addition to the private sector. the private sector will play a critical role, including in the vaccine development. exampleing to give an of how the importance of both federal and state working on the issue of stockpile or providing supplies necessary. foraintain a federal level the strategic stockpile. it contains a certain supplies for different emergencies, such as an infectious disease outbreak. but the stockpile is designed to supplement state supplies. it's not designed to be the only source. it is supposed to be a
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short-term stop gap, at least as it works right now. andt requires good planning good coordination on both the federal government's part as well as state and -- in states across the country. host: robert in syracuse. good morning. robert, are you there? caller: yes. hello. i want to ask a question about the ppp program. i am a small business owner. i pay myself. i paid myself on the way up until february. february ibanks, in was switching when covid-19 really started to take off. and i was being paid through a bp.
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every time i went onto the system for ppp, i would enter information and i would get booted off. the first shot was gone. then congress approved the second part. i finally got into the system, loaded up everything, and it said [indiscernible] -- host: you are breaking up. go ahead. caller: i uploaded bank statements and everything, and to this day i am still going back and forth with the bank. snd my fingers are -- figure are about $23,000. it's a small business. we are in up and growingbut it i see these multimillion dollar companies get millions of dollars. one thing i want to say and ask your opinion on. that was part one.
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doesn't steve mnuchin and donald trump on the millions of dollars, where they not agreeing to having full transparency on every dollar of the money? i know the democrats were holding off, trying to get transparency agreed upon. they held it off in february and march, the stimulus. then they were being blamed that they were holding up money from the u.s. people. my opinion is i think that anybody in government, when money is approved, whether it is hurricane sandy or this pandemic, every dollar should be accounted for. am i correct in saying that right now the trump administration is not under any agreement to show transparency for these trillions? host: we will get a response. guest: on the first issue, in terms of >> >> the challenges that we face, i can tell you
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that we have heard similar stories from others in terms of the frustration with the technology and also confusion about eligibility, as well as whether the loans would be forgiven. on anybody working currently securing a loan, if you have a lender, that is who you should be working with. if you have other questions general, ibility in would go to the website and they have put out a number of frequently asked questions that could be helpful. i would also note that recently the ppp program was extended, the application program, in a law that was signed over the last week. now it is extended until august 8, so people can continue to apply to the program. on the second issue of
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accountability and transparency, that was another lesson learned that we highlighted in the report. it is a need for mechanisms to be put in place. publicportant that the understand how these dollars are being used. accountabilitye mechanisms to help ensure that the dollars are going -- that were intended in the law. we highlight the example of the ppp as an area where additional transparency was needed. itthe time of our report, was not information in terms of going.he dollars were over the last week, some information has been released by the administration in terms of where the money has gone. sometually received
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detailed information that we had been requesting just over the last week as well. we highlighted this in the report that we had requested the detailed loan information and had not received it. but we have been able to work with sba and getting the detailed information we wanted and we are currently going over the information and and analyzing and we will report it out in future reports. their"washington post," headline that the treasury s ent payments to dead people. it?widespread was what was your recommendation for solving that issue, payments going to people that should not have gotten them? reported found -- we on what we learned from the
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treasury, which found that there was a little over one million o deceasedt t individuals, totaling $1.4 billion. because that occurred there was a legal interpretation led they on that treasury to believe that they did not have the authority not to send the checks to the deceased individuals because the act instructed them to anybody that filed a tax return in 2018 or 2019. the initial checks went out in batches. the first three batches, they did not apply the filter that would have allowed them to stop checks going to deceased individuals, so those went out. there was an internal discussion that the treasury -- they
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decided they had the authority to put that filter in place, so they added the filter and now the issue has been resolved. what we recommended in our report was the number of checks that did go out individuals, to those who are deceased, we recommended that the irs take steps to notify family members or the appropriate people about how to return the checks. to the government. since we issued our report, i have been contacted through email by some who have said that a loved one passed away into they received a check, asking how to return that. there are many people who want to do the right thing, so we wanted to make sure that the irs put out the information in terms of helping them return the checks. and the irs agreed to do so. host: it sounds like the speed
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with which the legislation was enacted, put into place and regulations generated, the speed of the program led to a a lot of problems. lot of problems. guest: that is correct. this was a huge federal effort that required action from most federal agencies. and there was a desire to get the programs up and running, to provide help to those in need. but in doing so, there is a trade-off. when you do not have time the federal agencies did not feel like they had time to put the safeguards in place, so you see the consequences. nost: let's hear from ed i
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titusville, florida. guest: i saw the lady testify before congress -- caller: and i found it illuminating. i'm interested in ppp. i'm retired irs, so as far as the fraud end, i was wondering who would be chasing the money down at the backend, as far as the deceased taxpayers. i do think the irs will take that on. -- ppp, thethat money guaranteed to the businesses, who is going to owe that money when they default? some of these businesses will not be able to stay in business. so who is going to go after the backend? guest: that is an issue we will be watching in terms of the
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sba's actions and monitoring the funding that has been provided loanecisions on forgiveness. i think it goes back to the comments i made earlier in that there has been a a lot of confusion with the program, including eligibility, but also whether the loans would have to be paid back and under what circumstances. i think when you have that level of confusion, it goes to your point that it will make the back end of the program difficult. we made recommendations for them to develop a plan to identify and address those risks, to address the program integrity issues we identified, but also the effectiveness of the program, to worked to make sure that the program as it is being carried out is effective. host: let's hear from our caller
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in texas. caller: i had a question about the ppp. on thea mistake application. i was confused at the time. i was going to school at the time. i was studying it. in thelicked the $10,000 box, that should've been my payroll for 10 weeks. so when they went to pay it out, she told me even though they had all my payroll information that they cannot change that. it's going to run out. so i would take it and work on getting the balance of it. but there is no way to do that. so i have three weeks of payroll. i have used 100% of it for payroll for my guys. there is no way. the sba will not talk to you about it. your mate says that you agreed to $10,000. so, now i am in dire straits.
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the business will make it, but i will personally go bankrupt to save the business because of this mistake. host: what is your business? caller: i own an air freight company that works directly with ford. host: any thoughts? guest: i am sorry to hear about your situation. is only advice i can offer you can work with your lender, but it sounds like you have already tried to do that. since the program has been extended, i think it would be worth you going back to your lender to have another conversation. in washington, d.c., grant? caller: i downloaded the loans,e of ppp on 150 k+
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and i saw three things of extreme concern. probably the most interesting was the number of nonprofits that mean leadership money overseas accessing the loans, like the friends of the israel defense forces got $2 million-$5 million, an organization that builds facilities in israel. the israel emergency alliance, which tries to portray israel as a great thing. the israeli american council, a pet project of sheldon adelson, got $1 million to $2 million. i question that they deserve the money. and the second thing, there are even two foreign banks involved overseas. made 423 ppp loans,
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another originated seven loans. i am question and that foreign bank branches should even be in the business. and then renewable energ company that builds power plants in the west bank, got $2 million-$5 million in loans. you know, ford safety glass that departed the army delivering substandard bulletproof glass got $1 million-$2 million. there.everal things guest: we are doing the same thing you are doing. in the last week, we received details,
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host: we hear from john calling from massachusetts. good morning. i am a first time caller. about, how cans we afford this program, covid-19.
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is very easy, the government up to 2 trillion, you have to break the back of american workers on this. thatan we justify doing --n there are huge questions to that effect, it is like a political ploy by globalists to defend whatever skin they have personally --e financially, whether it is personally or they are financing american programs on. there is no transparency in our government. the media is not local. they used to say that politics is the highest percent local, but it has become international media where the politicians and the people that represent us are so out of touch. and they are not responding. host: do you want to address the amount of money the federal government is spending in this
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response? guest: it is a significant amount of money, as we spoke at the beginning of the show, $2.6 trillion that has been appropriated and $1.3 billion of that obligated already. that funding went for a variety of activities. we have been talking about the ppp program for businesses during the economic downturn, but a good portion of the money also has gone to other efforts, including public health and issues of providing supplies, needed medical supplies, as well as testing. one of the things we will be doing going forward is to be examining the impact on the nation's fiscal health. that is an issue that gao monitors and reports on often.
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we reported that the nation is on an unsustainable fiscal path. and of this additional spending will further impact the path we are on. so, we will be monitoring that, as well as developing indicators to monitor how the assistance provided through the cares act related to legislation is affecting different aspects of the economy. we have developed indicators at that will be tracking on a monthly basis to determine whether we see positive trends in different aspects of the economy, which will then go to whether the programs are having the desired impact. host: during the 2008 financial crisis, you are very involved
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with the asset relief program. you mentioned it earlier. compare the size of that spending and the speed at which it was allocated to the coronavirus spending so far. guest: at the time the relief program was one of the largest government interventions, if not the largest. i believe it was about $800 billion or $900 billion or so, so compare that to the 2.6 trillion dollars that that has been provided. you have to remember though with that relief program, it was focused primarily on the financial sector to help provide support and keep liquidity injected into the financial market, to help the economy.
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the cares act is not only trying to provide help for the economy, taking similar actions with liquidity and helping small businesses, but there are other aspects that are being addressed too, from public health and testing supplies to state and local government, to assistance to different sectors, like the aviation sector, as well as the international response. so, when you consider the magnitude of what the legislation is doing, it really does put that number in perspective. and it goes to what a pandemic does. a pandemic often, it usually starts off as a public health
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crisis and it does remain that, but it has other effects on the economy to homeland security issues. that is what we are seeing. that is what the administration -- the legislation is trying to address, all these aspects with the pandemic. host: ron in independence, missouri. caller: good morning. what can be done to force the trump administration to be more transparent with these types of programs? i believe that it is the trump administration that has decided to not list how the funds will be dispersed and people keep talking about globalism. it has nothing to do with that. it is our own administration hiding, you know, hiding things and not revealing them. this is public information and it should never be hidden in the first placement should be front
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-- first place. it should be front and center and everybody should know who is getting the loans, and why they are qualified. that is the way we know that there is no cronyism going on. host: we talked about that, how you are actively looking at that right now, correct? guest: that is correct. we are looking at the data provided about ppp. as i mentioned earlier, this is a lesson learned we highlighted in terms of transparency and the need for a transparency mechanism. that is one of the roles gao plays with ongoing oversight. we have access to certain information. we have the audits ongoing. we have about 50 audits that span the government. we will be reporting out on those, so policymakers and of


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