The Payroll Support Program

Where the money went

Congress made $63 billion available in three laws: $32 billion in the CARES Act of March 2020, $16 billion in the Consolidated Appropriations Act, 2021 and $15 billion in the American Rescue Plan Act of March 2021 (GAO-24-106754). Within the first round the law allowed up to $25 billion for passenger airlines, $4 billion for cargo carriers and $3 billion for contractors such as caterers and ground handlers (CRS IN11482).

Treasury's recipient files add up to $58.91 billion: $28.586 billion in PSP1, $15.666 billion in PSP2 and $14.660 billion in PSP3. GAO counted $58.9 billion in payments as of December 31, 2023 (GAO-24-106754). Passenger airlines received $53.46 billion, contractors $4.63 billion and cargo carriers $827 million.

American Airlines received $12.79 billion across the three rounds, Delta $11.95 billion, United $10.9 billion and Southwest $7.19 billion. Part of the money was a loan. Larger recipients issued notes to Treasury, which GAO describes as “a percentage of the assistance provided and which must be repaid,” and some also issued warrants: GAO put the note principal across all rounds at $15.1 billion, owed by 36 recipients, and said 14 recipients provided 58 million warrants (GAO-24-106754). By the address on the agreement, Texas recipients took $21.26 billion, Georgia $12.3 billion and Illinois $11.36 billion. The Payroll Support Program table has every row, and Treasury's original files are on the source collection page.

What the conditions bought

The money could pay only wages, salaries and benefits. A first-round recipient could not make involuntary layoffs or furloughs or cut pay rates and benefits until September 30, 2020, and could not buy back stock or pay dividends through September 30, 2021. It also had to limit the pay of its highest-paid employees until March 24, 2022 (CRS IN11482). The Congressional Research Service wrote in October 2020 that the program “has helped airlines and contractors to temporarily avert mass layoffs and furloughs due to the unprecedented drop in business.”

Airlines for America estimated that about 50,000 airline employees took early retirement or voluntary separation in 2020 and 100,000 took unpaid leave (GAO-24-106754).

What the audits found

Treasury's inspector general audits whether recipients certified their payroll correctly. In one PSP2 audit, the contractor Allied New York Services had counted $3,362,506 of employer payroll taxes and ineligible employees' pay; after a $3,163,957 understatement elsewhere, it had overstated its awardable amount by $198,549. Because PSP2 paid contractors 30.4 percent of what they requested, the overpayment came to $60,359, and Treasury concurred with the recommendation to seek reimbursement (OIG-26-033). The rest are among the Treasury OIG source documents.

The same title of the CARES Act gave Treasury a loan program beside the payroll grants, including $17 billion for businesses critical to national security (GAO-21-198). Treasury lent from that allotment to the trucking company Yellow, formerly YRC Worldwide. The Special Inspector General for Pandemic Recovery found “internal control weaknesses” in how Treasury reviewed, approved and paid out the $700 million loan, and a definition of national-security business broader than the one Congress later wrote into 15 U.S.C. 9041 in the Consolidated Appropriations Act, 2021 (SIGPR-A-22-005). In April 2022 James Clyburn, chairman of the House Select Subcommittee on the Coronavirus Crisis, wrote to Treasury's deputy inspector general, Richard Delmar. His letter says Yellow received 95% of the program's funds and alleges that the company made misleading representations to get its $700 million loan, among them a claim to twice the share of certain Defense Department trucking services that the Department itself assessed. He asked the inspector general to investigate whether any of them were knowing false claims under the False Claims Act (letter of April 27, 2022).

The lessons GAO drew

GAO's review of the four aviation programs draws four lessons for the next emergency. Safeguards work when they are in place before the money goes out, and Treasury and the Transportation Department paid quickly without always having them ready. Several programs, or several paths within one, can fit different kinds of applicant. Clear communication with eligible companies is important in a new or expanded program. And workforce retention requirements, which all four programs carried, did not prevent a staffing shortage: “airlines still struggled with sufficient staffing to handle air traffic when it recovered” (GAO-24-106754).

Who ran it and who received it

Treasury under Steven Mnuchin ran the first round and the section 4003 loans; under Janet Yellen it ran the third round. Treasury's inspector general audited the payroll certifications, and the Special Inspector General for Pandemic Recovery, Brian D. Miller, oversaw the loans (SIGPR reports). On the receiving side, American Airlines was led through the pandemic by Doug Parker and Delta by Ed Bastian.

Start reading

1. CRS Insight IN11482, CARES Act Payroll Support to Air Carriers and Contractors (updated October 22, 2020)The first round's amounts, conditions and early take-up.
2. GAO-24-106754, Commercial Aviation: Key Lessons from COVID-19The three rounds, what they paid and GAO's lessons.
3. Treasury OIG, OIG-26-033, audit of a PSP2 contractor's certificationA certification audit and the overpayment it found.
4. GAO-21-198, Lessons Learned from the CARES Act Loan Program for Aviation and Other Eligible BusinessesThe loan program for airlines and national-security businesses.
5. SIGPR-A-22-005, Audit of Treasury's Direct Loan to YRC Worldwide, Inc.The Yellow loan.
6. SIGPR reportsThe pandemic-recovery inspector general's audits and quarterly reports.
7. Airline Payroll Support: Bailout With StringsThe article on the bargain the program struck.
8. Payroll Support Program: every recipient in Treasury's three filesThe data table behind every figure on this page.