Outrage rained down this week on Harvard University, whose endowment was worth roughly $40 billion at last count, and on Shake Shack, a burger chain with nearly $600 million in revenue last year, because both were getting coronavirus-related stimulus funds. In response, Harvard opted not to take the $8.6 million it was allowed to disperse to students from the $14 billion Higher Education Emergency Relief Fund, and other top universities said they wouldn’t take their share either. Shake Shack returned $10 million it had received from the Paycheck Protection Program before its initial stockpile of $349 billion was depleted.
Sure, it isn’t a good look for Ivy League universities to get emergency federal money while colleges with far fewer resources now find their very existence in doubt, or for a publicly traded company to get a boost while small businesses are being devastated. But the grants — intended to help low-income students at Harvard and employees at Shake Shack otherwise likely to be laid off — were within the letter of the laws as written by Congress.
That’s why the attention being paid to these individual stimulus recipients distracts from the bigger problem at hand: Congress has fallen behind on its duty to ensure that the trillions of dollars in COVID-19 stimulus packages are being spent responsibly and where they are most needed. It’s partly because of the way lawmakers wrote the stimulus packages — but also because oversight of the spending has been lacking without the hearings and other transparency mechanisms that members of the House and Senate would deploy under normal circumstances. House Democrats acknowledged as much on Thursday when they voted to create a new investigative committee that will monitor the stimulus spending and probe the Trump administration’s overall response to the pandemic.
The Democrats at least got that much right: The massive size and complexity of the stimulus packages demands new forms of oversight, on top of the long-term investigatory powers of entities like the Government Accountability Office.
Perhaps the most glaring need now is to properly fill out a five-member Congressional Oversight Commission that was set up to monitor trillions of dollars that the Treasury Department and the Federal Reserve will be lending to businesses and state and local governments. What makes this commission especially important is that it can’t be touched by President Trump, who has already sacked the inspector general who had been due to head another oversight group, the Pandemic Response Accountability Committee.
The commission that will monitor the Treasury Department and the Federal Reserve has only four of its five members, after the Republican and Democratic leaders of the House and Senate each got to make a selection. But one of the Democratic picks, Representative Donna Shalala of Florida, looks like a questionable choice now that the Miami Herald has found that Shalala neglected to report the stocks she sold in 2019 as required by law. If she was tripped up by that simple personal transparency requirement, are we sure she can adeptly monitor debt purchases and other complicated transactions by the Fed and the Treasury?
On top of that, House Speaker Nancy Pelosi and Senate majority leader Mitch McConnell still haven’t settled on the all-important fifth member, the committee chair. This shouldn’t drag on any longer. The committee has to get cracking on hiring its investigative staff — a similar commission that monitored stimulus funds during the 2008 financial crisis had more than 40 staffers — and on writing its first report, due May 8.
The first of the five people appointed to the panel was Bharat Ramamurti, a former adviser to Senator Elizabeth Warren who is managing director of the corporate power research program at the Roosevelt Institute. Last week, before the other three members had been named to join him, Ramamurti essentially initiated the watchdog function himself. He pressed Jerome Powell, chairman of the Federal Reserve, to promise to reveal which companies get the Fed’s loans and the terms and conditions of these deals. Ramamurti had to wait a week for an answer, but he got results: Powell committed to a range of transparency procedures that Ramamurti called “a significant victory for the public.”
Imagine what he could do with much more help, fast.
As the economy suddenly seized up last month, many members of Congress may have decided it was better to get stimulus money moving as quickly as possible than to try to target it to the most deserving recipients. But that makes oversight even more crucial now. If we have to piece together what got spent after the fact, it’ll be too late.
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