US looks to ease eligibility rules for $17 billion stimulus meant for security firms

The government may expand the definition of companies considered critical to national security to widen access to the money

US Secretary of the Treasury Steve Mnuchin said the government is looking to expand the eligibility criteria to avail stimulus meant for security companies. AFP

Treasury Secretary Steven Mnuchin said he’s considering easing rules for an untapped $17 billion chunk of the US coronavirus stimulus intended for national security-related companies.

Mr Mnuchin told reporters on Thursday that he and lawmakers had designed the loan programme for Boeing and General Electric, but that it turns out neither firm needed federal support. He said he may expand the definition of companies considered critical to national security to widen access to the money.

“We have thought about that, we’re taking that into consideration,” he said during a video conference. “If for whatever reason we don’t have enough demand for that money, we may go back to Congress and ask them to reauthorise that.”

Mr Mnuchin can also use unspent portions of the $17 billion (Dh62.4bn) loan pool to backstop additional lending programmes through the Federal Reserve, according to the Cares Act.

The Treasury Department, which decides firms that are eligible for the funds, has limited access to those whose work is designated DX - which means it ranks highest on the military’s list of national priorities - or to companies with top-secret security clearances.

The defense industry has been urging the Trump administration to broaden the criteria, arguing that too few firms qualify for the loans.

Only about 20 companies applied by the May 1 deadline, according to the Defense Department. There are about 300,000 companies in the Pentagon’s contractor supply chain.

Mr Mnuchin said the administration is also considering using money from the stimulus plan’s small-business loan programme to help businesses hurt by looting and rioting during nationwide protests against police brutality this month.

“Looting could not have occurred at a worse time,” he said.

Mnuchin has also discussed with President Donald Trump another round of direct government payments to American families to help soften the blow of the economic collapse precipitated by the coronavirus outbreak. Such a move is being considered “seriously,” he said.