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Illustration: Sarah Grillo/Axios

Renewing the Paycheck Protection Program (PPP) is one of the few things Democrats and Republicans agree on and is on the short list of must-have programs for any coronavirus relief package passed by Congress before year-end. The only problem: PPP has been a major disappointment for small businesses.

What happened: While 5.2 million businesses received funding through the program, it left out many smaller mom and pop shops — disproportionately women-, minority- and immigrant-led firms. Millions ended up closing their doors.

What we're hearing: "The headline is always 'Let’s get a stimulus signed' and small business relief is part of it, but you read the fine print and what does that relief look like relative to what the need is?" says Stephen Nunes, a director at Next Street, a firm that works with small businesses and entrepreneurs from underrepresented communities

  • "Round 1 and round 2 were not successful. We have a far more inequitable small business ecosystem than we had in February, which was already an inequitable small business ecosystem."

Between the lines: Because Congress has spent most of its time since March bickering over the size of a bill, there has been little energy devoted to figuring out what should be included in a stimulus program that built on PPP's shortcomings.

  • Organizations like Next Street as well as the U.S. Chamber of Commerce, National Retail Federation and others advocated for programs like business rent forgiveness, tax breaks for PPE and cleaning expenses, hiring incentives, and expansion of low-interest loans and loan guarantees targeting underserved communities.
  • Those appear to have largely been left by the wayside.

On the other side: A spokesperson for Sen. Marco Rubio, chair of the Committee on Small Business and Entrepreneurship, admits that PPP isn't perfect.

  • However, he highlights an October NBER study from conservative economists R. Glenn Hubbard and Michael R. Strain that found it "substantially increased the employment, financial health, and survival of small businesses.”
  • "PPP is the architecture. It's a program we now know is a proven method to get capital to small businesses,“ he tells Axios.

The bottom line: "At this point there is one package that seems to have bipartisan support, so the focus has to be on getting it across the finish line," Neil Bradley, chief policy officer for the Chamber, tells Axios.

  • "There will be opportunities, particularly as we head into the new year, to figure out further revisions and further assistance. But it’s difficult to understand how that’s going to happen if Congress fails to do something in this moment."

Go deeper

Updated Jan 13, 2021 - Axios Events

Watch: Recovery and resilience after COVID-19

On Wednesday, January 13, Axios' Dan Primack and Dion Rabouin hosted a conversation on the future of equitable economic recovery, featuring Rep. Ro Khanna (D-Calif.) and chef and World Central Kitchen founder José Andrés. They unpacked the pandemic's impact on small businesses and minority communities and spotlighting efforts to create an inclusive economy.

José Andrés discussed the impact of the pandemic on the hospitality and food industry, stressing the survival of restaurants as a critical part of the U.S. economic recovery.

  • On the food industry's need for federal support: "Restaurants will open again, and the issue is: how many are we going to lose from today until the next three, six months, or one year until everything goes back to normal? We have to make sure that the federal government is behind those businesses that are badly affected by this pandemic."
  • On ensuring living wages for workers: "We need to make sure that ... the food industry is not an industry that lives on the fringe of almost poverty, but that every American employee, every restaurant worker will make a decent living."

Rep. Ro Khanna unpacked the pandemic's impact on rural and minority communities and outlined a strategy for the Federal Reserve Board to better target their efforts.

  • On having the Fed scrutinize how they've been lending: "[We need] to make sure that lending isn't concentrated just to financial institutions and large corporations, that they're using their regional banks to be regional economic development banks considering rural and minority communities."
  • On taking a long-term approach to economic recovery: "We need to infuse [the Small Business Administration] with loans. I would do $10 trillion over 10 years to have 200,000 more loans to small businesses across America."

Axios co-founder and CEO Jim VandeHei hosted a View from the Top segment with Mastercard's strategic growth Vice Chairman and President Michael Froman who discussed the role of the private sector in times of crisis.

  • "The private sector can do a lot. And by this I mean not just philanthropy or corporate social responsibility or ESG efforts. As important as all of those are, the key is really getting companies to look at their products and services, technology and expertise and explore what they can do to have a positive social impact on a commercially sustainable basis."

Thank you Mastercard for sponsoring this event.

Rep. Ro Khanna calls on the Fed to reexamine its policies

Photo: Axios screenshot

Rep. Ro Khanna (D-Calif.) laid out a few specific policies he and some of Congress' other leading progressives are likely to demand when the next U.S. Congress begins its term.

The big picture: Khanna wants Congress to deliver more direct aid to Americans in the form of $2,000 monthly checks and to provide $1 trillion over 10 years in loans and grants to small businesses but is also taking aim at the Fed, arguing that the central bank has gone astray of its original intent to help small businesses and community banks.

The hard math behind America's labor shortage

Data: Bureau of Labor Statistics, Congressional Budget Office; Chart: Axios Visuals

Yes, the pandemic has created unusual temporary labor market dynamics. But in the bigger picture, the 2010s were a golden age for companies seeking cheap labor. The 2020s are not.

The big picture: In the 2010s, the massive millennial generation was entering the workforce, the massive baby bo0m generation was still hard at work, and there was a multi-year hangover from the deep recession caused by the global financial crisis.