GAZIANTEP, Turkey — In the 10 years since its popular uprising set off the Arab Spring, Tunisia has often been praised as the one success story to emerge from that era of turbulence. It rejected extremism and open warfare, it averted a counterrevolution, and its civic leaders even won a Nobel Peace Prize for consensus building.
Yet for all the praise, Tunisia, a small North African country of 11 million, never fixed the serious economic problems that led to the uprising in the first place.
It also never received the full-throated support of Western backers, something that might have helped it make a real transition from the inequity of dictatorship to prosperous democracy, analysts and activists say. Instead, at critical points in Tunisia’s efforts to remake itself, many of its needs were overlooked by the West, for which the fight against Islamist terrorism overshadowed all other priorities.
Now, as Tunisians grapple with their latest upheaval, which began when President Kais Saied dismissed the prime minister and suspended Parliament over the weekend, many seem divided on whether to condemn his actions — or embrace them.
terrorism and the pandemic, Mr. Kaboub said.
overthrew the country’s authoritarian president of 23 years, Zine el-Abidine Ben Ali.
But Western officials were obsessively focused on the Islamists — namely the Ennahda, or Renaissance, party that swept early elections — and where they were going and what they represented.
“In conversations, those sorts of questions ate up almost all the oxygen in the room,” Ms. Marks said. “It was almost impossible to get anybody to ask another question.”
awarded the Nobel Peace Prize in 2015 — to the point that it became a “fetish,” she said.
After the 2011 revolution, Al Qaeda and other extremists were quick to mobilize networks of recruits.
Terrorism burst into the open in 2012 when the U.S. Embassy in Tunis came under attack from a mob. Over the years that followed, extremist cells carried out a string of political assassinations and suicide attacks that shattered Tunisians’ optimism and nearly derailed the democratic transition.
training and assisting Tunisian security forces, and supplying them with military equipment, but so discreetly that the American forces themselves were virtually invisible.
By 2019, some 150 Americans were training and advising their Tunisian counterparts in one of the largest missions of its kind on the African continent, according to American officials. The value of American military supplies delivered to the country increased to $119 million in 2017 from $12 million in 2012, government data show.
The assistance helped Tunisia defeat the broader threat of terrorism, but government ministers noted that the cost of combating terrorism, while unavoidable, burned a larger hole in the national budget.
But it is the structure of the economy that remains the root of the problem, Mr. Kaboub said. All of Tunisia’s political parties have identical economic plans, based on World Bank and International Monetary Fund guidelines. It was the same development platform used by the ousted president, Mr. Ben Ali, Mr. Kaboub said.
“Right now,” he said, “everybody in Tunisia is begging for an I.M.F. loan, and it is going to be seen as the solution to the crisis. But it is really a trap. It’s a Band-Aid — the infection is still there.”
CAIRO — Tunisia’s fledgling democracy, the only one remaining from the popular revolutions that swept the Arab world a decade ago, trembled on the brink of collapse Monday after its president sought to seize power from the rest of the government in what his political opponents denounced as a coup.
The president, Kais Saied, who announced the power grab late Sunday, did not appear to have completely succeeded in taking control as of Monday evening, as chaos enveloped the North African country. But many Tunisians expressed support for him and even jubilation over his actions, frustrated with an economy that never seemed to improve and a pandemic that has battered hospitals in recent weeks.
With Syria, Yemen and Libya undone by civil war, Egypt’s attempt at democracy crushed by a counterrevolution and protests in the Gulf States quickly extinguished, Tunisia was the only country to emerge from the Arab Spring revolutions with a democracy, if a fragile one.
But the nation where the uprisings began now finds even the remnants of its revolutionary ideals in doubt, posing a major test for the Biden administration’s commitment to democratic principles abroad.
statement. Secretary of State Antony J. Blinken, in a phone call Monday with Mr. Saied, encouraged him “to adhere to the principles of democracy and human rights,” a spokesman said.
Defying the Tunisian president, the prime minister, Hichem Mechichi, said he would hold a cabinet meeting even after Mr. Saied announced the dismissal of him and several ministers. Parts of Parliament said they would meet virtually even as soldiers cordoned off the Parliament building.
But the danger remained that Mr. Saied would back up his power grab with greater force, whether by further deploying the military or arresting top officials.
“This is a very concerning development that puts the democracy at great risk of unraveling,” said Safwan M. Masri, executive vice president of Columbia University’s Global Centers network, who studies Tunisia. Referring to Mr. Saied, he said: “An optimistic scenario would be that the Parliament and the Constitution and democratic institutions would prevail and that he would be forced out of office. But I would not bet any money on it.”
Already, the president has announced that he was assuming the public prosecutor’s powers and stripping lawmakers of immunity.
whether the revolution was worth it.
Protests and strikes frequently racked the country, and popular discontent widened the gap between elites who praised Tunisia’s democratic gains and Tunisians who simply wanted to improve their lot.
The coronavirus pandemic made things worse by devastating Tunisia’s tourist industry, an important economic engine. The virus has shaken the government and the health system even further in recent weeks as Tunisians have died of Covid-19 at the highest rate in the Middle East and Africa.
On Sunday, demonstrators across Tunisia called for the dissolution of Parliament, giving Mr. Saied some popular cover to announce that night that he was firing Mr. Mechichi, freezing Parliament for 30 days and assuming executive authority.
Tarek Megerisi, a senior fellow at the European Council on Foreign Relations. “They blame them for all the country’s problems and think that they need to be removed.”
The showdown was a long time coming, with Mr. Saied locked since his election in political infighting with Mr. Mechichi and the speaker of Parliament, Rachid Ghannouchi.
Mr. Saied has been hinting for months at expanding his authority by refusing to swear in ministers and blocking formation of a constitutional court, raising alarm among opponents and political analysts.
In response to chaos in Tunisia’s Covid-19 vaccination rollout last week and a surge in cases that has overwhelmed hospitals, Mr. Saied stripped control of Tunisia’s coronavirus response from the Health Ministry and handed it to the military.
On Sunday night, Mr. Saied cited Article 80 of the Constitution, which he said permits the president exceptional powers. He said he had consulted both Mr. Mechichi and Mr. Ghannouchi and held an emergency meeting with other officials before acting.
Mr. Saied said he was doing so to preserve the country’s “security and independence and to protect the normal operation of state institutions.”
Article 80, however, accords the president such powers only if the country faces an imminent threat and only after the prime minister and parliament speaker have been consulted. Mr. Ghannouchi denied that he had been.
In a statement, Mr. Ghannouchi deplored what he called a “coup” and described the suspension of Parliament as “unconstitutional, illegal and invalid.” The assembly “remains in place and will fulfill its duty,” he said.
In a televised statement, Mr. Saied said, “This is not a suspension of the Constitution.” And he sounded an ominous warning to adversaries:“Whoever fires a single bullet, our armed and security forces will retaliate with a barrage of bullets.”
Videos posted to social media showed crowds cheering, honking, ululating and waving Tunisian flags after the president’s actions Sunday night, the dark night lit up by red flares. Other videos showed Mr. Saied wending throughcheering supporters alongthe main thoroughfare of Tunis, where revolutionaries gathered during the 2011 protests.
The next step for Tunisia is unclear. The country has so far failed to form the constitutional court, called for in the 2014 Constitution, that could adjudicate such disputes.
In his statement, Mr. Saied said cryptically that a decree would soon be issued “regulating these exceptional measures that the circumstances have dictated.” Those measures, he said, “will be lifted when those circumstances change.” He also fired the defense minister and acting justice minister on Monday afternoon.
Tunisia’s divisions reflect a wider split in the Middle East between regional powers that supported the Arab revolutions and the political Islamist groups that came to power at the time (Turkey and Qatar), and those that countered the uprisings (Saudi Arabia, the United Arab Emirates and Egypt). While Turkey and Qatar expressed concern on Monday, the others remained quiet.
Reporting was contributed by Nada Rashwan from Cairo, Lilia Blaise and Massinissa Benlakehal from Tunis, and Michael Crowley from Washington.
CAP-HAÏTIEN, Haiti — Heckled by protesters and surrounded by phalanxes of heavily armed guards, foreign diplomats and Haitian politicians attended the funeral of Haiti’s assassinated president on Friday, a tense event that laid bare a fractured nation’s problems instead of providing an opportunity for healing.
Less than a half-hour into the funeral, foreign dignitaries including an American delegation led by the U.S. ambassador to the United Nations, Linda Thomas-Greenfield, departed over safety concerns set off by gunshots fired outside the event. White House officials said that the delegation members were safe and that they had flown back to the United States, cutting the trip short.
questioned and taken into custody.
Trou-du-Nord, and later began his entrepreneurial career from Port-de-Paix, where he became president of the Chamber of Commerce.
That he was killed far away in Port-au-Prince inflamed old divisions between the less developed north and the country’s capital and economic center. It also deepened the rifts between the country’s small elite — historically stemming from the descendants of lighter-skinned Blacks who were free before the revolution — and its destitute majority.
“It comes back incessantly in all the history of Haiti,” said Emile Eyma Jr., a historian based in Cap-Haïtien, speaking of the resentment felt by northerners.
“What is dangerous is that both the question of color and the question of regionalism are weaponized for purely political reasons,” he said, distracting from the country’s fundamental problems of inequality, poverty and unemployment.
Harold Isaac, Zachary Montague and Rick Gladstone contributed reporting.
McDonald’s is raising wages at its company-owned restaurants. It is also helping its franchisees hang on to workers with funding for backup child care, elder care and tuition assistance. Pay is up at Chipotle, too, and Papa John’s and many of its franchisees are offering hiring and referral bonuses.
The reason? “In January, 8 percent of restaurant operators rated recruitment and retention of work force as their top challenge,” Hudson Riehle, senior vice president for research at the National Restaurant Association, said in an email. “By May, that number had risen to 72 percent.”
Restaurant workers — burger flippers and bussers, cooks and waiters — have emerged from the pandemic recession to find themselves in a position they could not have imagined a couple of years ago: They have options. They can afford to wait for a better deal.
In the first five months of the year, restaurants put out 61 percent more “workers wanted” posts for waiters and waitresses than they had in the same months of 2018 and 2019, before the coronavirus pandemic shut down bars and restaurants around the country, according to data from Burning Glass, a job market analytics firm.
replace their face-to-face workers with robots and software. Yet there are signs that the country’s low-wage labor force might be in for more lasting raises.
Even before the pandemic, wages of less-educated workers were rising at the fastest rate in over a decade, propelled by shrinking unemployment. And after the temporary expansion of unemployment insurance ends, with Covid-19 under control and children back at school, workers may be unwilling to accept the deals they accepted in the past.
Jed Kolko, chief economist at the job placement site Indeed, pointed to one bit of evidence: the increase in the reservation wage — the lowest wage that workers will accept to take a job.
According to data from the Federal Reserve Bank of New York, the average reservation wage is growing fastest for workers without a college degree, hitting $61,483 in March, 26 percent more than a year earlier. Aside from a dip at the start of the pandemic, it has been rising since November 2017.
“That suggests it is a deeper trend,” Mr. Kolko noted. “It’s not just about the recovery.”
Other trends could support higher wages at the bottom. The aging of the population, notably, is shrinking the pool of able-bodied workers and increasing demand for care workers, who toil for low pay but are vital to support a growing cohort of older Americans.
“There was a work force crisis in the home care industry before Covid,” said Kevin Smith, chief executive of Best of Care in Quincy, Mass., and president of the state industry association. “Covid really laid that bare and exacerbated the crisis.”
more families turning their backs on nursing homes, which were early hotbeds of coronavirus infections, Mr. Smith said, personal care aides and home health aides are in even shorter supply.
“The demand for services like ours has never been higher,” he said. “That’s never going back.”
And some of the changes brought about by the pandemic might create new transition opportunities that are not yet in the Brookings data. The accelerated shift to online shopping may be a dire development for retail workers, but it will probably fuel demand for warehouse workers and delivery truck drivers.
The coronavirus outbreak induced such an unusual recession that any predictions are risky. And yet, as Ms. Escobari of Brookings pointed out, the recovery may provide rare opportunities for those toiling for low wages.
“This time, people searching for jobs may have a lot of different options,” she said. “That is not typical.”
Distressed homeowners with loans owned by private banks or investors should contact their mortgage servicer to see what options they’re offering. Some of them have followed a framework similar to federally backed loans, but others’ terms may be murkier.
No matter what type of loan you have, the most important action to take now is to reach out to your mortgage servicer to find out when your payments will resume and how much they will be. If you cannot afford them, the servicer can lay out your options. For more guidance, you can also seek out a housing counselor.
The changes made to food stamps — now largely known as the Supplemental Nutrition Assistance Program — during the pandemic were complicated.
But one significant change, a 15 percent bump in benefits for all recipients, runs only through Sept. 30. So if you currently receive SNAP benefits, they may go down then. (Congress is considering an extension, SNAP policy experts said, and other changes unrelated to the pandemic — including a regular inflation adjustment, along with a potential change to the basket of food that benefits are based on — could also help offset any potential cuts.)
A number of other temporary changes will remain in many states for several more months.
Those changes increased benefits for the program, which is federally funded but run through the states. Beneficiaries have received emergency allotments, which increased their monthly benefits to the maximum amounts permitted or higher. All told, the average daily benefit per person rose to $7 from $4 by April of this year, according to Ellen Vollinger, legal director at the Food Research & Action Center.
Access to the program also became somewhat easier: Certain college students became eligible, unemployed people under 50 without children weren’t subject to time limits and there were fewer administrative hurdles to remaining enrolled, experts said.
The extra allotments can continue to be paid as long as the federal government has declared a public health emergency, which is likely to remain for at least the rest of the year. But the state administering the benefits must also have an emergency declaration in place, and at least six states — Arkansas, Florida, Idaho, North Dakota, South Dakota and South Carolina — have either ended or will soon begin to pull back that extra amount, according to the Center on Budget and Policy Priorities.
Anxieties over a lag in hiring lifted on Friday as the government reported that employers added 850,000 workers in June, the largest monthly gain since last summer.
Wages jumped for the third month in a row, a sign that employers are trying to attract applicants with higher pay and that workers are gaining bargaining power.
Rising Covid-19 vaccination rates and a growing appetite for travel, dining out, celebrations and entertainment gave a particular boost to leisure and hospitality businesses. The biggest chunk of June’s gains — 343,000 — could be found there.
accelerated rate of early retirements means that some of those workers will never come back.
“Today there are more job openings than before the pandemic and fewer people in the labor force,” said Becky Frankiewicz, president of the staffing company ManpowerGroup North America. “The single defining challenge for employers is enticing American workers back to the work force.”
The report follows several promising economic developments this week. Consumer confidence, which surged in June, is at its highest point since the pandemic’s onset last year. Stocks closed out the first half of the year at record highs. And the Congressional Budget Office said Thursday that the economy was on track to recover all the jobs lost in the pandemic by the middle of next year.
But economists cautioned against trying to divine the complex currents crisscrossing the labor market from a single month’s data, particularly given how much the pandemic has disrupted employment patterns.
may reflect smaller-than-expected layoffs rather than big gains. Over a longer period, employment in both public and private education remains significantly below its prepandemic level.
remarks from the White House.
The June figures are unlikely to allay the concerns of small-business owners and managers who complain about the difficulty finding workers. Nearly half report that they cannot fill openings, according to a recent survey by the National Federation of Independent Business.
The competition for workers has pushed up wages. Average hourly earnings climbed 3.6 percent in the year through June and 0.3 percent over the month. Low-wage workers seem to be the biggest beneficiaries of the bump in pay.
Ms. Frankiewicz of ManpowerGroup said the rise of “superemployers” like Amazon and Walmart was making it even more difficult for small and medium-size businesses to attract workers. In the summer of 2019, the top 25 employers had 10 percent of the open jobs, she said, while “today 10 employers do.”
moved to end distribution of federal pandemic-related jobless benefits even though they are funded until September, arguing that the assistance — including a $300 weekly supplement — was discouraging people from returning to work.
The latest jobs report did not reflect the cutoff’s impact because the government surveys were completed before any states ended benefits.
Staffing firms said they had not seen a pickup in job searches or hiring in states that have since withdrawn from the federal jobless programs.
Indeed surveyed 5,000 people in and out of the labor force and found that child care responsibilities, health concerns, vaccination rates and a financial cushion — from savings or public assistance — had all affected the number looking for work. Many employers are desperate to hire, but only 10 percent of workers surveyed said they were urgently seeking a job.
And even among that group, 20 percent said they didn’t want to take a position immediately.
Aside from ever-present concerns about pay and benefits, workers are particularly interested in jobs that allow them to work remotely at least some of the time. In a survey of more than 1,200 people by the staffing company Randstad, roughly half said they preferred a flexible work arrangement that didn’t require them to be on site full time.
Some employers are getting creative with work arrangements in response, said Karen Fichuk, chief executive of Randstad North America. One employer changed the standard shift to match the bus schedule so employees could get to work more easily. Others adjusted hours to make it easier for parents with child care demands.
Health and safety concerns are also on the minds of workers whose jobs require face-to-face interactions, the survey found.
Black and Hispanic workers, who were disproportionately affected by the coronavirus and by job losses, are having trouble regaining their foothold. “The Black unemployment rate is still exceptionally high,” at 9.2 percent compared with 5.2 percent for white workers, said Michelle Holder, an economist at John Jay College in New York.
One factor in the elevated Black jobless rate is that the ranks of Black workers employed or seeking jobs grew sharply last month. But participation in the labor force remains lower than it was before the pandemic among all major racial and ethnic groups.
Professor Holder said some people were reluctant to rejoin the labor force because of the quality and the pay of the work available.
“We don’t have a shortage of people to work,” she said. “What we don’t have are decent jobs.”
Jeanna Smialek and Ben Casselman contributed reporting.
“It’s gone from feeling super lonely and now it’s feeling pretty normal,” Mr. Gray added.
Wall Street and the banking sector are pillars of the city’s economy, and they have been among the most aggressive industries in prodding employees to go back to the office. James Gorman, the chief executive of Morgan Stanley, told investors and analysts this month that “if you want to get paid in New York, you need to be in New York.”
Many firms, including Blackstone and Morgan Stanley, have huge real estate holdings or loans to the industry, so there is more than civic pride in their push to get workers to return. Technology companies like Facebook and Google are increasingly important employers as well as major commercial tenants, and they have been increasing their office space. But they have been more flexible about letting employees continue to work remotely.
Google, which has 11,000 employees in New York and plans to add 3,000 in the next few years, intends to return to its offices in West Chelsea in September, but workers will only be required to come in three days a week. The company has also said up to 20 percent of its staff can apply to work remotely full time.
The decision by even a small slice of employees at Google and other companies to stay home part or all of the week could have a significant economic impact.
Even if just 10 percent of Manhattan office workers begin working remotely most of the time, that translates into more than 100,000 people a day not picking up a coffee and bagel on their way to work or a drink afterward, said James Parrott, an economist with the Center for New York City Affairs at the New School.
“I expect a lot of people will return, but not all of them,” he said. “We might lose some neighborhood businesses as a result.”
The absence of white-collar workers hurts people like Danuta Klosinski, 60, who had been cleaning office buildings in Manhattan for 20 years. She is one of more than about 3,000 office cleaners who remain out of work, according to Denis Johnston, a vice president of their union, Local 32BJ of the Service Employees International Union.
Roller-coaster operators and lemonade slingers at Kennywood amusement park, a Pittsburgh summer staple, won’t have to buy their own uniforms this year. Those with a high school diploma will also earn $13 as a starting wage — up from $9 last year — and new hires are receiving free season passes for themselves and their families.
The big pop in pay and perks for Kennywood’s seasonal work force, where nearly half of employees are under 18, echoes what is happening around the country as employers scramble to hire waiters, receptionists and other service workers to satisfy surging demand as the economy reopens.
For American teenagers looking for work, this may be the best summer in years.
As companies try to go from hardly staffed to fully staffed practically overnight, teens appear to be winning out more than any demographic group. The share of 16- to 19-year-olds who are working hasn’t been this high since 2008, before the unfolding global financial crisis sent employment plummeting. Roughly 256,000 teens in that age group gained employment in April — counting for the vast majority of newly employed people — a significant change after teenagers suffered sharp job losses at the beginning of the pandemic. Whether the trend can hold up will become clearer when jobs data for May is released on Friday.
It could come with a downside. Some educators warn that jobs could distract from school. And while employment can itself offer learning opportunities, the most recent wave of hiring has been led by white teens, raising concerns that young people from minority groups might miss out on a hot summer labor market.
antique roller coaster and snapping people into paddle boats when she thought it paid $9 — so when she found out the park was lifting pay to $13 an hour, she was thrilled.
“I love it,” she said. She doesn’t even mind having to walk backward on the carousel to check that everyone is riding safely, though it can be disorienting. “After you see the little kids and they give you high-fives, it doesn’t matter at all.”
It’s not just Kennywood paying up. Small businesses in a database compiled by the payroll platform Gusto have been raising teen wages in service sector jobs in recent months, said Luke Pardue, an economist at the company. Teens took a hit at the onset of the pandemic but got back to their pre-coronavirus wage levels in March 2021 and have spent the first part of May seeing their wages accelerate above that.
raised the starting pay to $10 an hour and dropped the minimum age for applicants from 16 years old to 15. It seems to have worked: More teenagers applied and the city has started interviewing candidates for the open positions.
“Between 2020 and 2021, it seems like a lot of the retail starting salaries really jumped up, and we just kind of had to follow suit if we wanted to be competitive and get qualified applicants,” said Trace Stevens, the city’s director of parks and recreation.
Apps for Apps” deal in which applicants who were interviewed received a free appetizer voucher. Restaurants and gas stations across the country are offering signing bonuses.
But the perks and better pay may not reach everyone. White teens lost employment heavily at the beginning of the pandemic, and they’ve led the gains in 2021, even as Black teens have added comparatively few and Hispanic teens actually lost jobs. That’s continuing a long-running disparity in which white teens work in much greater numbers, and the gap could worsen if the current trajectory continues.
More limited access to transportation is one factor that may hold minority teens back from work, Ms. Sasser Modestino said. Plus, while places like Cape Cod and suburban neighborhoods begin to boom, some urban centers with public transit remain short on foot traffic, which may be disadvantaging teens who live in cities.
“We haven’t seen the demand yet,” said Joseph McLaughlin, research and evaluation director at the Boston Private Industry Council, which helps to place students into paid internships and helps others to apply to private employers, like grocery stores.
Ms. Sasser Modestino’s research has found that the long-running decline in teen work has partly come from a shift toward college prep and internships, but that many teens still need and want jobs for economic reasons. Yet the types of jobs teens have traditionally held have dwindled — Blockbuster gigs are a thing of the past — and older workers increasingly fill them.
Teenagers who are benefiting now may not be able to count on a favorable labor market for the long haul, said Anthony P. Carnevale, the director of Georgetown University’s Center on Education and the Workforce.
“There may be what will surely be a brief positive effect, as young people can move into a lot of jobs where adults have receded for whatever reason,” he said. “It’s going to be temporary, because we always take care of the adults first.”
Educators have voiced a different concern: That today’s plentiful and prosperous teen jobs might be distracting students from their studies.
When in-class education restarted last August at Torrington High School, which serves 330 students in a small city in Wyoming, principal Chase Christensen found that about 10 of his older students weren’t returning. They had taken full-time jobs, including working night shifts at a nursing home and working at a gravel pit, and were reluctant to give up the money. Five have since dropped out of or failed to complete high school.
“They had gotten used to the pay of a full-time worker,” Mr. Christensen said. “They’re getting jobs that usually high schoolers don’t get.”
If better job prospects in the near term overtake teenagers’ plans for additional education or training, that could also spell trouble. Economic research consistently finds that those who manage to get through additional training have better-paying careers.
Still, Ms. Sasser Modestino pointed out that a lot of the hiring happening now was for summer jobs, which have less chance of interfering with school. And there may be upsides. For people like Ms. Bailley, it means an opportunity to save for textbooks and tuition down the road. She’d like to go to community college to complete prerequisites, and then pursue an engineering degree.
“I’ve always been interested in robots, I love programming and coding,” she said, explaining that learning how roller coasters work lines up with her academic interests.
Shaylah Bentley, 18 and a new season pass taker at Kennywood, said the higher-than-expected wage she’s earning will allow her to decorate her dorm room at Slippery Rock University. She’s a rising sophomore this year, studying exercise science.
“I wanted to save up money for school and expenses,” she said. “And have something to do this summer.”
Isabella Casillas Guzman, President Biden’s choice to run the Small Business Administration, inherited a portfolio of nearly $1 trillion in emergency aid and an agency plagued by controversy when she took over in March. She has been sprinting from crisis to crisis ever since.
Some new programs have been mired in delays and glitches, while the S.B.A.’s best-known pandemic relief effort, the Paycheck Protection Program, nearly ran out of money for its loans this month, confusing lenders and stranding millions of borrowers. Angry business owners have deluged the agency with criticism and complaints.
Now, it’s Ms. Guzman’s job to turn the ship around. “It’s the largest S.B.A. portfolio we’ve ever had, and clearly there’s going to need to be some changes in how we do business,” she said in a recent interview.
When the coronavirus crisis struck and the economy went into a free fall last year, Congress and the Trump administration pushed the Small Business Administration to the forefront, putting it in charge of huge sums of relief money and complicated new programs.
confusing, often-revised loan terms and several technical meltdowns — the program enjoyed some success. Millions of business owners credit it with helping them survive the pandemic and keep more workers employed.
Economists are skeptical about whether the program’s results justify its huge cost, but Mr. Trump and Mr. Biden both embraced the effort as a centerpiece of their economic rescue plans. As the pandemic stretched on and the economy plunged into a recession, the Paycheck Protection Program morphed into the largest business bailout in American history. More than eight million companies got forgivable loans, totaling $788 billion — nearly as much money as the government spent on its three rounds of direct payments to taxpayers.
Fraud is a major concern. Thousands of people took advantage of the rushed program’s minimal documentation requirements and sought illicit loans, according to prosecutors, to fund gambling sprees, Lamborghinis, luxury watches, an alpaca farm and a Medicare fraud scheme. The Justice Department has charged hundreds of people with stealing more than $440 million, and scores of federal investigations are active. (During her confirmation hearing, Ms. Guzman promised that she would “prioritize the reduction of fraud, waste and abuse.”)
There were other problems. Female and minority business owners were disproportionately left out of the relief effort. A last-minute attempt by Mr. Biden to make the program more generous for solo business owners came too late to help many of them. This month, a new emergency popped up: The program ran short of money and abruptly closed to most new applicants.
“There was no warning,” Toby Scammell, the chief executive of Womply, a company that helps borrowers get loans, said of the latest debacle. His company alone has more than 1.6 million applicants caught in limbo.
low-interest disaster loans of up to $500,000 and new grant funds, created by Congress, for two of the hardest-hit industries: the Shuttered Venue Operators Grant for live-event businesses and the Restaurant Revitalization Fund. (The hotel industry is pushing for its own version.)
Today in Business
Each required the agency to create policies and technology systems from scratch. The venue program has been especially rocky. On its scheduled start day, in early April, the application system completely failed, leaving desperate applicants hitting refresh and relying on social media posts for information and updates.
“I turned to my associate director and said, ‘I figured something like this would happen,’” said Chris Zacher, the executive director of Levitt Pavilion, a nonprofit performing arts center in Denver. The Small Business Administration revived the system three weeks later and has received 12,200 applications, but it does not anticipate awarding grants until late May.
have turned into primal screams of pain. (“I SERIOUSLY CANNOT TAKE THIS WITH SBA ANY LONGER” is one of the milder replies.) She said she understood the urgency.
“It’s definitely unprecedented — across the board, across the nation — and we are seeing multiple disasters at the same time,” she said. “The agency is highly focused on just still responding to disaster and implementing this relief as quickly as possible.”
This is Ms. Guzman’s second tour at the Small Business Administration. When President Barack Obama picked Maria Contreras-Sweet in 2014 to take over the agency, Ms. Guzman went along as a senior adviser and deputy chief of staff. The women had met in the mid-1990s. Ms. Guzman, a California native with an undergraduate degree from the University of Pennsylvania’s Wharton School of Business, was hired at 7Up/RC Bottling by Ms. Contreras-Sweet, an executive there.
“I was always impressed with her ability to handle jobs with steep learning curves — she has a quick grasp of complex concepts,” Ms. Contreras-Sweet said.
Ms. Guzman spent her first stint at the agency focused on traditional projects like its flagship lending program, which normally facilitates around $28 billion a year in loans. The time, the job is radically different.
community navigators” program, which will fund local organizations, including nonprofits and government groups, to work closely with businesses owned by people with disabilities or in underserved rural, minority and immigrant communities. It’s an expansion of a grass-roots effort by several nonprofits to get vulnerable businesses access to Paycheck Protection Program loans.
Ms. Guzman said she was bullish about that effort and other agency priorities, like expanding Black and other minority entrepreneurs’ access to capital — but first, like the clients it serves, the Small Business Administration has to weather the pandemic.
And to do that, it has to stop shooting itself in the foot.
The much-awaited second attempt at opening the Shuttered Venue Operators Grant fund was preceded by one final debacle: The agency announced — and then, less than a day before the date, abandoned — a plan to open the first-come-first-served fund on a Saturday. For those seeking aid that has not yet arrived, the incident felt like yet another kick in the teeth.
Ms. Guzman said she was aware of the need for her agency to overcome its limitations and rebuild its checkered reputation.
“This is a pivotal moment in time where we can leverage the interest in small business to really deliver a remarkable agency to them,” she said. “I value being the voice for the 30 million small and innovative start-ups around the country. What I always say to my staff is that I want these businesses to feel like the giants that they are in our economy.”
WASHINGTON — From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents.
That turnaround is partly the product of strong income tax receipts, particularly in states that heavily tax high earners and the wealthy, whose finances have fared well in the crisis. The unexpectedly rosy picture is raising pressure on President Biden to repurpose hundreds of billions of dollars of federal aid approved this year, in order to help fund a potential bipartisan infrastructure deal.
Last week, Senator Mitt Romney, Republican of Utah, suggested that Mr. Biden and Republican negotiators look to “some of the funding that’s been sent to states already under the last few bills” to help pay for that agreement. “They don’t know how to use it,” Mr. Romney said. “They could use that money to finance part of the infrastructure relating to roads and bridges and transit.”
Some economists and budget experts support that push, arguing that the money could be better spent elsewhere and that states’ spending plans could add to a risk of rapid inflation breaking out across the country. Other researchers and local budget officials say that the federal aid is rescuing harder-hit cities and states, like New York City and Hawaii, from a cascade of layoffs and spending cuts.
$1.9 trillion economic assistance package that Mr. Biden signed in March. They say the aid will help ensure that the economic rebound does not repeat the years of state and local budget cutting that followed the 2008 financial crisis, which slowed the recovery from recession and contributed to millions of Americans waiting years to reap its benefits.
“We still feel strongly that the state and local plan is critical to ensuring we have a strong insurance policy for the type of strong growth we want, the type of equitable recovery the country deserves,” Gene Sperling, a senior adviser to Mr. Biden who oversees fulfillment of the March assistance package, said in an interview, “and to coming back from the 1.3 million jobs lost at the state and local level.”
Even if the administration wanted to recoup or divert the funds, it is unlikely that it could repurpose the money or make significant changes to how it is used without congressional action.
The debate over the state and local funding comes as Mr. Biden navigates a critical week of negotiations with Republicans over infrastructure in search of a deal, and as he prepares to travel to Cleveland on Thursday to speak about the economy. How to pay for any new spending is a primary hurdle in the talks, with Mr. Biden pushing to raise taxes on corporations and Republicans preferring increased user fees like the gas tax.
Repurposing unspent funds could help advance an agreement, particularly given Republican opposition to bankrolling state aid in previous rescue packages. Democrats pushed hard to include lucrative financial assistance for states, cities and tribes in Mr. Biden’s rescue bill. Republicans fought those efforts, warning they would serve as a “bailout” to high-tax, high-spend liberal states. They also cited a series of projections from Wall Street firms and other analysts suggesting that many states’ revenues were faring better than officials had feared in the early months of the pandemic.
do not need more federal money. That is particularly true in states that do not rely primarily on the tourism or hospitality industries for tax revenues. Those with progressive tax systems that have caught surging revenues from investment income enjoyed by wealthy residents — like Silicon Valley moguls — are also faring well.
California officials expect a $15 billion surplus this fiscal year, after fearing a $54 billion shortfall. Virginia has seen nearly $2 billion in unanticipated revenues. As has Oregon, where economists recently upgraded the state’s revenue forecasts — moving it from projected deficits to surplus — in a report that surprised and delighted many lawmakers.
“It’s extremely surprising,” said Mark McMullen, the Oregon state economist.
“Obviously, when the shutdowns first set in and we saw these catastrophic employment losses, we treated them as a normal recession in our forecasts,” he said.
But surging income tax revenues and several rounds of federal assistance have now put the state “above our prepandemic forecasts,” Mr. McMullen added.
The strong revenue figures come as more federal relief money is just beginning to roll out the door. The Treasury Department began sending funds to states this month and has so far distributed more than $100 billion — about half of what is available to be disbursed immediately. Local governments are expected to receive the rest next year, although states still experiencing a sharp rise in unemployment will get a lump sum right away.
as a much lower risk than Mr. Summers does.
Other analysts warn that state budget situations could sour if the stock market dips sharply or economic growth fizzles. Many cities, like New York, have struggled with sluggish tax revenues and still are reliant on federal to help avoid further layoffs.
New York expects to receive more than $22 billion in Covid-19 federal aid, according to the nonpartisan Citizens Budget Commission. Despite the funds, the city is still anticipating budget gaps in the coming years, the result of declining revenues like property taxes.
In retrospect, said Lucy Dadayan, a senior research associate at the Tax Policy Center, the March law should have included “more targeted funding” for the states and cities that need it most.
$8.8 billion from the federal government. Ben Watkins, the director of the Florida Division of Bond Finance, said the state was using the relief money to invest in infrastructure and water quality projects and directing some of its surplus funds to hurricane preparedness.
He described the windfall as staggering.
“It’s a good problem to have,” Mr. Watkins said, “but that doesn’t mean that it’s not excessive.”
States have substantial leeway in how they use the money, though they are prohibited from using the funds to subsidize tax cuts. Several Republican-led states have sued the Treasury Department, arguing that the restriction infringes on state sovereignty.
The lawsuits do not appear to be slowing the delivery of the funds. Ohio failed to win an injunction blocking the restrictions from being enforced this month, and Missouri had its case thrown out of court after a federal judge said the state did not demonstrate that the law caused it harm.
$26 million corporate tax cut last week, and lawmakers have told The Omaha World-Herald that they believe that by keeping the federal funds in a separate account from the state’s general fund, they will be in compliance with the law.
Nicholas Fandos and Dana Goldstein contributed reporting.