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A renewed Paycheck Protection Program again set to include VC-backed companies

Congress and the White House are continuing their tortoise act on economic stimulus, all while telling us that help is almost certainly, maybe, on its way.

The state of play: One thing most elected officials agree on is the need for a reauthorized Paycheck Protection Program, which would provide forgivable loans to struggling small businesses.


  • The latest bipartisan proposal includes $300 billion for PPP, with the eligibility requirements lowered from 500 employees to 300 employees.
  • It also would require applicants to demonstrate a 30% revenue loss in at least one quarter of 2020, expands some forgivable expenses (e.g., personal protective equipment) and has a carveout for small borrowers and underserved communities.

The big picture: Beyond those changes, this version of PPP looks very similar to what was rolled out in April. That means venture capital and private equity-backed companies would again be eligible, per prior Treasury guidance.

In the spring, including these companies made sense.

  • We were collectively staring into the abyss, and it was reasonable for private market investors to be fearful of throwing bad money after good.
  • Protecting payrolls was of paramount importance, no matter their employer's equity structure.

Today, it makes much less sense, outside of select industries like restaurants and live entertainment.

  • Private market investors have been richly rewarded in 2020, as the capital markets unexpectedly divorced from the real economy.
  • We know that the top industries for venture capital — tech and life sciences — have not only survived but thrived. Many likely could qualify under the "30% revenue decline" metric, but that's not a true reflection of their business in December 2020. Just ask Airbnb.
  • With vaccines distribution beginning, these "long term investors" can now see clearly to the other side of the pandemic. If they don't want to support existing portfolio companies, it's a tell that should scare off taxpayers.

The bottom line: If America's political lethargy has produced any positives, it's the benefit of hindsight and the space to understand evolved circumstances. It would be prudent to apply those learnings to the next iteration of PPP.

Bonus: Axios Re:Cap today will discuss the state of the stimulus with Sen. Joe Manchin (D-W.Va.). Subscribe.

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Why it matters: Biden, who made the remarks after touring a vaccination site in Houston, echoed CDC director Rochelle Walensky, who said earlier on Friday that while the U.S. has seen a recent drop in cases and hospitalizations, "these declines follow the highest peak we have experienced in the pandemic."

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Biden after U.S. airstrike: Iran "can't act with impunity. Be careful"

President Biden said Friday that Thursday night's airstrike against facilities tied to an Iranian-backed militia group in Syria was meant to warn Iran that it "can't act with impunity."

Driving the news: The Pentagon said the airstrike, which was authorized by Biden, was carried out "in response to recent attacks against American and Coalition personnel in Iraq" and was intended to "de-escalate the overall situation in both eastern Syria and Iraq."

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What he’s saying: Schiff, the chairman of the House intelligence committee, says that while some intelligence couldn’t be published because of the need to protect sources and methods, “we rarely see something published that is this definitive and I think that's an important accomplishment for the administration.”

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FDA advisory panel endorses Johnson & Johnson one-shot COVID vaccine for emergency use

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Why it matters: The FDA is expected to make a final decision within days on the J&J vaccine, which was found to be 66% effective against moderate to severe COVID. An emergency use authorization would allow distribution to immediately begin, helping streamline and speed up the vaccine rollout across the U.S.

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Law enforcement groups back Biden pick for associate attorney general

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Why it matters: The Major County Sheriffs of America noted Gupta “emphasized that she does not support efforts to ‘defund the police'” and highlighted her desire to improve criminal justice through methods that include increased training for law enforcement officials.

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About 20% of U.S. adults have received first COVID-19 vaccine dose, White House says

Nearly 1 in 5 adults and nearly half of Americans 65 and older have received their first dose of the coronavirus vaccine, White House senior adviser Andy Slavitt said on Friday.

The big picture: The Biden administration has previously said it has secured enough doses to vaccinate most of the American population by the end of July.

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