As small and medium sized businesses struggle to keep their doors open, policymakers are pointing their fingers at one another trying to figure out where support should come from.
In a House Financial Services Committee hearing on Tuesday, members of Congress pressed the Federal Reserve to expand the scope of its emergency lending program to Main Street.
But Federal Reserve Chairman Jerome Powell countered that the central bank’s program is ill fitted for already debt-burdened businesses, suggesting that Congress prioritize more Paycheck Protection Program loans under the Small Business Administration.
“Trying to underwrite the credit of hundreds of thousands of very small businesses would be very difficult,” Powell said of the Fed’s Main Street Lending Program in testimony. “I think PPP is a better way to approach that space in the market and I think you are well advised to do that.”