Mnuchin says deep-pocketed private schools should return Paycheck Protection Program loans
Source: CNN
Treasury Secretary Steve Mnuchin called on private schools with endowments to return the funds they received from the federal Paycheck Protection Program, after media reports of some elite schools applying for the loans meant to keep smaller businesses afloat during the coronavirus pandemic.
"It has come to our attention that some private schools with significant endowments have taken #PPP loans. They should return them," Mnuchin wrote on Twitter Friday.
Some private schools like St. Andrew's Episcopal in Maryland, where Barron Trump is a student, plan to accept funds from the PPP, despite having an endowment of more than $8 million, according to a 2017 tax filing.
The school told CNN in a statement Thursday that it applied for the funds to "ensure retention of our full faculty and staff, including hourly employees and coaches, during this very challenging and uncertain time."
Read more: https://www.cnn.com/2020/05/01/politics/mnuchin-private-schools-loans-coronavirus/index.html
Regarding endowments, ABC had this article last week explaining that endowments often have strings attached.
[...]
"Rarely does a family say if some random pandemic comes up feel free to use it however you wish," he added. "Its usually a long-term gift for a very specific nature."
Hundrieser added that most institutions also have strict spending policies that say you can withdraw a certain percentage from the endowment "and it's those returns on those investment dollars that you can use."
Steven Bloom, the director of government relations at the American Council on Education, told ABC News that it's "really a misnomer to say an endowment."
[...]
Bloom noted that with endowments, "schools are legally bound to spend the money in the way the donors determined when they give their money."
htuttle
(23,738 posts)God forbid that someone supporting a family ends up getting an extra $200, but we'll just handle the corporate handouts on the honor system.
jberryhill
(62,444 posts)There are no asset tests for PPP eligibility. The point is to attempt to provide a forgivable loan as long as most of it is used for payroll.
The PPP is a stupid and inefficient mechanism for the real goal which is to put some money into people's pockets, but it's the one we have right now.
What difference does it make if, say, a restaurant has $100,000 in original artwork hanging on the wall. Do they have to eat into their capital assets and forego the PPP? Why?
If schools have to eat into their endowments to cover operating costs, then why doesn't any other business have to exhaust its capital resources to participate?
mr_lebowski
(33,643 posts)This is PR, and and nothing will happen to them if they don't return it.
ancianita
(35,960 posts)more divide-and-conquer PR talk.
Maxheader
(4,370 posts)the govt should have access to the receivers profile..their wealth..
See munchinbutt , you need to read that 1st...then give out $$..
Roy Rolling
(6,908 posts)What kind of country asks for voluntary compliance? What is that all about? These guys dont understand gubmint.
bucolic_frolic
(43,070 posts)Congress didn't see this coming? Some businesses don't need it.
They did conflicting things. They paid taxpayers $1200 to help. Everyone. Even those still working. Then they gave loans sometimes forgivable to businesses to pay salaries or other things. I doubt money made it to where it was intended - to places where abrupt drops in income, payments, receipts were needed most.
Trump lackeys Mnuchin, Kudlow, Powell are running things.
greenjar_01
(6,477 posts)What a vague mess of a legislation. If you didn't want a school with an $8 million endowment to receive PPP, you should have written that into the legislation. The fact is that the super genius finance bro Mnuchin is good at requiring foreclosure on the elderly, but is shit at governing, just like every other fucker in Trumpworld. So, he couldn't "foresee" this shit in this rushed and deeply stupid legislation, and so didn't build in mechanisms for Harvard and St. Andrews and other seats of privilege NOT TO APPLY or be accepted. They "should return" the PPP? Why, they don't have to make payroll? They should liquidate their endowments to make payroll first? Why? Why not write that into the legislation? Oh, right, because everybody was doing a half-assed job, and now you have a shitty law. Congratulations, genius finance bro Treasury Secretary. You fucking played yourself.
PS: Senators and Reps TOO. And those fucking people should have known better. Mnuchin at least has the excuse that he's an ignorant anti-government moron with no fucking clue how to legislate anything.