The GOP Coronavirus Relief Package Is a Dream for Big Corporations, and a Nightmare for Struggling Americans
(March 20, 2020) — At a press conference on Thursday, President Donald Trump reiterated that his administration wants to put workers first in its efforts to mitigate the economic devastation caused by the spread of coronavirus.
And while that is ideal, his party is crafting legislation that does just the opposite.
The administration on Tuesday said they were crafting a rescue package of at least $1 trillion which included plans to send checks to Americans “in about 2 weeks,” according to Treasury Secretary Steve Mnuchin.
But Mnuchin’s two weeks turned into “before the end of April” in a meeting with Senate Republicans immediately following the press conference. After that it went back to early April, but the payment — at least for poor Americans — became less generous.
According to a bill released Thursday, Republicans are now talking about prioritizing money for “taxpayers” (by which they mean only income tax, not things like sales tax which all Americans pay). Under this plan, Americans who make less than $75,000 would get up to $1,200 while poor families who pay less in taxes would get $600.
It’s also been reported that GOP Sen. Lindsey Graham and soon-to-be White House Chief of Staff Rep. Mark Meadows are actively trying to convince Trump to reject these cash payments all together.
This idea is ludicrous, stingy, and harmful to our economy and society in crisis.
In fact there are a bunch of ideas in this bill that would do nothing to help struggling Americans:
- The bill waives nutrition requirements for meals for senior citizens — the population most likely to get sick and end up needing care.
- The bill offers a pathetic $10 million for minority businesses, which Business Insider’s small business reporter Dominick Reuter roughly calculated, could round out to about $2 a business.
- And of course, in the Senate Republican bill big corporations get a huge tax cut. In fact, they would pay far less tax on their foreign entities. Making them bring cash home from abroad was one of the selling points of the GOP tax cut that was passed at the end of 2017. Corporate lobbyists have been working against it ever since. Now, in the middle of a crisis, they got it.
All of that is stomach churning, but the worst part is what will happen to low income families. Punishing Americas poorest at a time like this is not only callous, but would slow our economy’s recovery. If there’s anything we’ve learned from China’s experience with coronavirus, it’s that you want to keep the economy as going as normally as possible while people are practicing social distancing. That means ensuring that people can pay as many bills as possible and that, when the social distancing period is over, people have money in their pockets to spend again.
We need to be generous to *everyone right now. It’s the only way we’re going to get through this with minimal damage. Unemployment claims are about to explode, with data from only 15 states putting them somewhere around 600,000 and the possibility that as many as a million people could file for unemployment insurance over the next week. Wall Street is now coming to terms with the idea that this could be the worst global recession since WWII.
House Democrats are trying to put together a more generous plan, offering Americans $2,000 a month with an additional $1,000 for every child until the crisis is over. This is more like it. But all of this needs to move faster. We don’t have time for callous proposals, we have to do right by Americans right now.
Trump’s party should put our money where his mouth is and actually help all American workers through this calamity, not grandstand on ideology to hurt the poor.
- Except companies that spent all their cashflow on stock buybacks during boom times and are now asking for a bailout. The President said on Thursday that they should be treated differently from companies that invested their money. I agree. They shouldn’t be allowed to do stock buybacks if they accept taxpayer money, and their executive compensation should be regulated.
Reich on the Trump Bailout
It’s Morally Repulsive How Corporations Are Exploiting This Crisis. Workers Will Suffer
(March 23, 2020) — Societies gripped by cataclysmic wars, depressions or pandemics can become acutely sensitive to power and privilege.
Weeks before the coronavirus virus crushed the US stock market, the Republican senator Richard Burr apparently used information he gleaned from his role as chairman of the Senate intelligence committee about the ferocity of the coming pandemic to unload 33 stocks held by him and his spouse. They were estimated at being worth between $628,033 and $1.72 million in some industries likely to be hardest hit by the global outbreak.
While publicly parroting Trump’s happy talk at the time, Burr confided to several of his political funders that the disease would be comparable to the deadly 1918 flu pandemic.
Then the market tanked, along with the retirement savings of millions of Americans.
Even some pundits on Fox News are now calling for Burr’s resignation.
Using power and privilege to exploit the weak and vulnerable in the face of a common threat is morally repugnant. Call it ‘Burring’ after Richard Burr’s stock sell-off
When society faces a common threat, exploiting a special advantage is morally repugnant. Call it “Burring” However tolerable Burring may be in normal times, it isn’t now.
In normal times, corporations get special favors from Washington in exchange for generous campaign contributions, and no one bats an eye. Recall the Trump tax cut, which delivered $1.9tn to big corporations and the wealthy.
The coronavirus should have altered business as usual. But last week’s Senate Republican relief package, giving airlines $58bn and billions more to other industries, is pure Burring.
The Senate majority leader, Mitch McConnell, tried lamely to distinguish it from the notorious bank bailouts of 2008. “We are not talking about a taxpayer-funded cushion for companies that made mistakes. We are talking about loans, which must be repaid, for American employers whom the government itself is temporarily crushing for the sake of public health.”
But the airlines are big enough to get their own loans from banks at rock-bottom interest rates. Their planes and landing slots are more than adequate collateral.
Why do airlines deserve to be bailed out? Over the last decade they spent 96%of their free cashflow, including billions in tax savings from the Trump tax cut, to buy back shares of their own stock. This boosted executive bonuses and pleased wealthy investors but did nothing to strengthen the airlines for the long term. Meanwhile, the four biggest carriers gained so much market power they jacked up prices on popular routes and slashed services (remember legroom and free bag checks?).
United’s CEO, Oscar Munoz, did his own Burring on Friday, warning that if Congress doesn’t bail out the airline by the end of March, United will start firing its employees. But even if bailed out, what are the odds United would keep paying all its workers if the pandemic forced it to stop flying? The bailout would be for shareholders and executives, not workers.
While generous toward airlines and other industries, the Republican bill is absurdly stingy toward people, stipulating a one-time payment of up to $1,200 for every adult and $500 per child. Some 64m households with incomes below $50,000 would get as little as $600. This will do almost nothing to help job-losers pay their mortgages, rents and other bills for the duration of the crisis, expected to be at least the next three months.
The Republican coronavirus bill is about as Burring as legislation can be — exposing the underlying structure of power in America as clearly as Burr’s stock trades. In this national crisis, it’s just as morally repulsive.
Take a look at how big corporations are treating their hourly workers in this pandemic and you see more Burring.
Walmart, the largest employer in America, doesn’t give its employees paid sick leave, and limits its 500,000 part-time workers to 48 hours paid time off per year. This Burring policy is now threatening countless lives. (On one survey, 88% of Walmart employees report sometimes coming to work when sick.)
None of the giants of the fast-food industry — McDonald’s, Burger King, Pizza Hut, Duncan Donuts, Wendy’s, Taco Bell, Subway — gives their workers paid sick leave, either.
Amazon, one of the richest corporations in the world, which paid almost no taxes last year, is offering unpaid time off for workers who are sick and just two weeks paid leave for workers who test positive for the virus. Meanwhile, it demands its employees put in mandatory overtime.
Here’s the most Burring thing of all: these corporations have made sure they and other companies with more than 500 employees are exempt from the requirement in the House coronavirus bill that employers provide paid sick leave.
At a time when almost everyone feels burdened and fearful, the use of power and privilege to exploit the weaknesses and vulnerabilities of others is morally intolerable.
We are all in this together, or should be. Whatever form it takes, Burring must be stopped.
Stop Trump’s Big Biz Bailout Scam
(March 21, 2020) — I am so furious that I need to shout from the rooftops. But we’re in lockdown, so I’m emailing you: No industry — not airlines, not hotel chains, not cruise ships — should be bailed out.
Congress is feverishly negotiating a sweeping economic stabilization bill that is expected to pass next week. The details of it are changing rapidly, but Donald Trump and Mitch McConnell are proposing hundreds of billions of dollars in bailouts for the airline industry and other industries that recklessly mismanaged their budgets by fattening the pockets of their CEOs. And now, these wealthy executives are begging Republicans for a taxpayer handout.
But guess how much the lowest-earning Americans will get if Trump and McConnell have their way? A measly $600. 1 It’s disgraceful.
We may have only a few days to pressure lawmakers to rise to the challenge of this unprecedented moment and make sure that our government bails out the American people, not corporations.
Think about all of the people across America who are constantly checking their local newspapers’ websites to learn the latest about how the pandemic is affecting their communities; that’s what I’m doing, and you might be, too. But what if, in addition to showing the much-needed news updates, the newspapers’ websites showed ads pressuring Congress to give a lifeline to people, not corporations, in the economic stimulus bill? These ads will make lawmakers, who I can assure you care about what’s said in their local papers, take serious notice.
This powerful ad campaign is exactly what MoveOn plans to implement, but only if they can raise $200,000 by Monday.
As former secretary of the US Department of Labor, I can tell you that there is no justification whatsoever to bailing out corporations right now. The airline industry certainly doesn’t deserve a bailout: The biggest US airlines spent 96% of their cash flow over the past decade to buy back shares of their own stock in order to boost executive bonuses and please wealthy investors. American Airlines alone repurchased more than $12.5 billion of its shares over the past 10 years.
But McConnell expects us to bail them out to the tune of $50 billion?
The airlines can stay in business by borrowing at rock-bottom rates, using their assets as collateral. Regular Americans living paycheck to paycheck don’t have that same option.
We need to come together right now to demand Congress put people first and pass an economic stimulus bill to support Americans in need, not provide bailouts for big businesses.
Just three weeks ago, Trump claimed that the coronavirus was “going to disappear. One day — it’s like a miracle — it will disappear.” 2
And on that same day, Republican Senator Richard Burr warned wealthy constituents in a private meeting of the dire consequences that would arise from the crisis. He advised the well-connected group to prepare to alter their travel plans, warned that schools will probably close, and predicted that the military may be mobilized to combat the outbreak.3 When addressing the general public, however, he followed Trump’s lead and minimized the severity of the crisis.
And then, Burr sold $1.5 million of his stock holdings, right before the market nosedived.
This is outrageous, and yet another example of Republicans serving their own interests and those of the wealthy over the needs of the American people. Unless we hold GOP lawmakers’ feet to the fire, the economic stimulus bill won’t help everyday Americans who urgently need help the most.
Seemingly overnight, so many people in every community in America have lost their jobs or are facing a severe cutback in hours due to the pandemic.
Congress has to do the right thing in this unprecedented moment: It must put people first, small businesses second, and big business last.
Thanks for all you do.
P.S. My new book, out this Tuesday, March 24, explores the power dynamics that left us with a system that puts corporations before people and leaves so many behind, especially in times of crises. Please order a copy today to understand how we got into this mess, and how we get out.
1. “Senate Republicans’ cash assistance
plan is far too limited, Vox, March 20, 2020
2. “A Complete List of Trump’s Attempts to
Play Down Coronavirus,” The New York Times, March 15, 2020
3. “Weeks Before Virus Panic, Intelligence Chairman Privately Raised Alarm, Sold Stocks,” NPR, March 19, 2020
If We’re Bailing Out Corporations, They Should Bail Out the Planet
(March 21, 2020) — One of the best chances to make some positive use of the coronavirus pandemic may be passing swiftly. As the economy craters, big corporations are in need of government assistance, and, on Capitol Hill, the sound of half a trillion dollars in relief money is bringing out the lobbyists.
On Thursday afternoon, Senator Sheldon Whitehouse, Democrat of Rhode Island, described the scene as a “trough” and mentioned a quote from a lobbyist in The Hill: “Everybody’s asking for something and those that aren’t asking for something only aren’t because they don’t know how.” Whitehouse added, “I fear that enviros don’t know how to ask, because, so far in this scrum, we haven’t heard much from them.”
The corporations will get assistance, but the Democrats have enough legislative power to insure that it comes with at least a few strings attached. If they attach those strings with even a modicum of care, they will have used this emergency to help solve the looming climate crisis in ways that were unimaginable just a few days ago.
For busy legislators looking for a principle to enforce in handing out relief to corporations, here’s a shorthand: any bailout depends on your industry promising to meet the targets set in the Paris climate accords, and demonstrating in the next few months what that plan looks like.
Consider, say, the airline industry. It obviously is in need of relief, even if the biggest airlines spent ninety-six per cent of their proceeds over the past decade buying back stock, instead of, say, preparing for the future. On behalf of the flight attendants and pilots and mechanics the airlines employ, they should get it. But everyone who has to live on a rapidly heating planet should get something back in return. And since, at current rates of growth, by 2050, air travel threatens to eat up a quarter of the entire carbon the world can still emit and meet the climate targets set in Paris, that something should be a wholesale change in direction.
On Friday, some environmental groups proposed that “Congress must cap total lifecycle greenhouse gas emissions from the US airline fleets at 2020 levels, and overall emissions must fall at least 20% per decade thereafter.” (The Trump Administration has so far sidestepped Clean Air Act calls to regulate aircraft emissions.) And the airlines should act not by pledging to plant trees but by burning less jet fuel—by making flight routes more logical, and designing more efficient planes.
Or take the banks: if they want a bailout, they should pledge an end to funding for expansionary fossil-fuel projects. They don’t seem willing to rein themselves in—on Wednesday the Rainforest Action Network released an updated version of its “Banking on Climate Change” report, which shows that the four biggest US banks continue to lead the way in funding global warming, with JPMorgan Chase reportedly having handed over more than a quarter of a trillion dollars to the fossil-fuel industry since the end of the Paris talks.
Or take the fossil-fuel industry itself. It’s been dropping in value for a decade, as renewable energy takes most of the growth in demand, but the coronavirus crisis has hammered the price of oil. Trump promised to fill the Strategic Petroleum Reserve “right up to the top,” but the drillers will doubtless want more.
Yet, as Michael Brune, the head of the Sierra Club, told me, on Thursday, “the fossil-fuel industry is already heavily subsidized by the federal government, and they should not get yet another giveaway in any form, whether it’s low-interest loans, royalty relief, new tax subsidies, or filling the reserve.” More assistance should come only if these companies pledge to stop exploring for new oil, since climate scientists have made it clear that we can’t burn what we already have in our reserves.
None of this is ideal. In an ideal world, we’d use this moment to quickly enact a Green New Deal, employing all the suddenly unemployed Americans in building out our renewable-energy system and laying the high-speed rail tracks that would help curtail the need for short-haul aviation. But, for now, here’s a list of “5 Principles for Just COVID-19 Relief and Stimulus” that dozens of environmental groups have signed on to (350.org, which I helped found, is a signatory), which offers a guide for thinking about the “choices being made right now will shape our society for years, if not decades to come.”
These sorts of conditions are not without precedent: after the 2008 financial crisis, President Barack Obama used the government bailouts of General Motors and Chrysler to force them, and by extension the rest of the automobile industry, to accept stringent new fuel-economy standards, which may have been the single biggest blow he struck against climate change during his tenure in office. (Needless to say, the Trump Administration has been hard at work wrecking this achievement.)
The principle is clear: taking money from society means that you owe society something. Trump and the Senate Republicans aren’t likely to enforce that principle, but, since the Democrats control the House, they will have a big say in the outcome. The question that climate-minded voters will ask for years to come is: Did you strike a useful bargain when you had the leverage?
Our goal can’t be simply a return to the status-quo ante, because that old normal was driving a climate crisis that will eventually prove every bit as destructive as a pandemic. With just a little courage from Democratic legislators, we could actually be building a world that is safer on every front.
The ‘Plan’ Is a Disaster
Robert Weissman / Public Citizen
Public Citizen Action Alert Senate Republicans just announced their long-awaited plan to help people and businesses weather the impending economic storm. Their scheme — burped up by Mitch McConnell in league with Donald Trump’s sycophantic Treasury Secretary, Steve Mnuchin — would be a dream come true for Big Business but a nightmare for everyday Americans.
Here’s just some of what’s in the Republicans’ disastrous proposal:
- Mnuchin gets to dole out hundreds of billions to Corporate America — without revealing which companies got bailed out for half a year.
- Businesses are not required to keep workers on their payrolls.
- There are NO meaningful oversight mechanisms to prevent fraud and waste by the companies that get bailed out.
And on and on.
Thankfully, Senate Democrats have — for the moment — forced Republicans back to the drawing board.
But a new plan, which may well be no better, could come up for a vote as early as tomorrow. So stay tuned, and be ready to spring to action on short notice. Because we can’t let Donald Trump and Mitch McConnell use the coronavirus emergency as one more excuse to further plutocracize our country.
Thanks for staying engaged.
Robert Weissman is the president of Public Citizen
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.