Americans Could Each Receive $2,000 in Emergency Aid. Corporations Might Get A Bigger Bailout.

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By Keya Vakil

March 18, 2020

The proposed emergency aid package is intended to combat the economic damage of the coronavirus outbreak, which has led to mass layoffs.

The federal government is now considering sending $2,000 to most Americans in addition to $300 billion to small businesses, $50 billion in loans to airlines, and $150 billion for other “severely distressed industries,” the Washington Post reports.

The latest phase of the government’s coronavirus emergency response plan is intended to combat the economic damage of the coronavirus outbreak, which has led to mass layoffs and crushing stories of workers worried about how they’ll afford basic necessities.

The new proposal comes the same day the Senate approved the government’s first coronavirus relief bill, which passed the House last week and is expected to be signed into law by President Trump. The initial bill provides free coronavirus testing, paid emergency leave for qualified workers, expanded unemployment insurance, and additional funding for food security initiatives and Medicaid.

The White House is now negotiating its new $1 trillion proposal with Republican politicians in the Senate, but will also need to gain approval from Democrats.

Many Democrats have expressed support for efforts to send cash payments to Americans and some, including Rep. Ilhan Omar and Sens. Cory Booker, Michael Bennet, and Sherrod Brown, have written their own proposals. Ilhan’s measure would provide $1,000 to every American adult and $500 for every child, without exceptions. The Bennet-Booker-Brown proposal, meanwhile, would immediately send $2,000 to every American adult and child in the U.S. below a certain income level, with another $1,500 to follow in July and $1,000 in October, if the coronavirus outbreak is still a public health emergency then. 

Sen. Bernie Sanders has gone even further, calling for emergency payments of $2,000 to every household in the U.S. every month for the duration of the crisis. That differs from the White House proposal, which would be a one-time, $2,000 stimulus for every American, split between two checks, with the first arriving in April and the second in May.

There appears to be growing consensus among leaders of both parties that Americans need immediate help. While Democrats have also made helping small businesses a priority, there could be a split between the two factions on bailouts for airlines and other industries. The new White House proposal does not specify which industries it considers “severely distressed,” but they could include the hotel, casino, and natural gas industries, all of which have lobbied for bailouts.

Democrats like Rep. Alexandria Ocasio-Cortez and Sen. Sherrod Brown have sounded the alarm about how these funds would be used, insisting that they be tied to restrictions on stock buybacks and other measures ensuring that employees aren’t let go while executives receive large bonuses.

Sen. Elizabeth Warren of Massachusetts issued a statement Tuesday including her own demands for any bailout packages to big industries. Those demands include:

  • Companies must keep their payrolls and use bailout funds to keep people working or on payroll. 
  • Companies must provide a $15 minimum wage within one year of the coronavirus national emergency declaration ending.
  • Companies are permanently banned from engaging in stock buybacks
  • Companies are prohibited from giving executive bonuses or dividends or while they are receiving any relief and for three years thereafter. 

The Trump administration’s proposed airline bailout would impose “limits on increases in executive compensation” until loans were repaid, according to Jeffrey Stein of the Washington Post. That falls short of what progressive leaders like Sen. Warren and Rep. Ocasio-Cortez have called for. 

Warren did not mince words about where she stood on the bailouts. “Let me be clear: We’re not doing no-strings-attached bailouts that enrich shareholders or pay CEO bonuses. Period,” she wrote on Twitter.

Some Republicans, such as Sen. Rick Scott and Rep. Matt Gaetz, also said they oppose corporate bailouts, and there’s concern among some White House advisers that helping some industries and companies but not others could set a bad precedent. 

“Every industry is affected. Every restaurant is affected. How are you going to draw the line between who gets government aid and who doesn’t?” one person briefed on internal White House deliberations told the Post. “It becomes a real corporate welfare scramble.”

In a note-perfect example of the issue at hand, Boeing announced Tuesday it was seeking a $60 billion bailout. The company was valued at $73 billion prior to its announcement and has made more than $43 billion in stock buybacks since 2013.

Editor’s Note: This story has been updated to reflect the Senate’s passage of the first coronavirus relief bill.


CATEGORIES: Coronavirus | Economy


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