Here in Washington we are about to give America a bailout of unprecedented size, in order to stop what may be the most sudden shock to our economy in history. But the negotiations have stalled in part on the issue of what Democrats are calling a “slush fund,” half a trillion dollars that, if Republicans get their way, would be under the sole discretion of Treasury Secretary Steven Mnuchin to distribute to companies as he saw fit.
Put simply, Democrats don’t trust Mnuchin, and by extension President Trump, to pass out that enormous sum of money in a manner that isn’t run through with cronyism and even outright corruption. And why should they?
Some of that money would be earmarked for specific industries, including $50 billion for airlines. But as Republicans wrote their original bill, Mnuchin would have almost unlimited power to decide which companies do and don’t get this assistance.
There were also specific provisions in the administration proposal that set off alarms for Democrats. Mnuchin would be able to keep the identity of the companies receiving assistance secret for six months, and companies would be required only to keep workers on the payroll “to the extent possible,” which means if businesses wanted, they could take the money, then fire their workers anyway.
Economists are in agreement that it’s vitally important to keep as many people as possible on payrolls, because it will be much easier for the economy to ramp back up if workers can quickly return to their current jobs rather than having to find new ones. So in effect the government will take over the companies’ payroll for some period of time.
This is being done in many other countries as well. For instance, in Denmark, the government is picking up 75 percent of salaried workers’ pay and a maximum of 90 percent for hourly workers.
But if you want that to happen, you have to require companies getting bailouts to do it, not suggest that they should.
Democrats also want full transparency in real time on which companies are getting help. They want restrictions on how the money can be used, including limiting the compensation of top executives and stopping companies from making stock buybacks, which benefit wealthy shareholders (even Trump has expressed support for that). And they’re asking for strict oversight to monitor the spending.
Which brings us to a question that is monetarily small in the scope of all this money, but symbolically large: Trump himself, and how much of a bailout he’ll get from taxpayers.
The president, as you might have heard, owns some hotels, golf clubs and other resorts. Indeed, he has spent nearly a third of his presidency at one of his own properties. Every time, you and I pick up the tab for travel costs, rooms, even the golf carts.
So does anyone seriously believe that the president who tried to give himself a multi-million dollar federal contract to host the Group of Seven meeting and who charges the Secret Service hundreds of thousands of dollars to accompany him to his clubs wouldn’t try to get an ample chunk of this money?
Of course not. We all know he will.
On Saturday, Trump was asked whether he’ll seek assistance from this fund for his properties, and this is what he said:
I don’t know. I mean, I just don’t know what the government assistance would be for what I have. I have hotels. Everybody knew I had hotels when I got elected. They knew I was a successful person when I got elected. So it’s one of those things.
Yes, it is indeed one of those things. “Everybody knew I had hotels when I got elected,” he says, which seems to imply that we should have known that if an eventuality like this occurred, he’d be getting his piece of the pie. I might remind you that other presidents have been so concerned about even the appearance of a conflict of interest that Barack Obama refused to refinance his mortgage after interest rates dropped because “when you’re president you have to be a little careful about these transactions.”
On Sunday, Trump was asked again whether he’d commit to not taking public money for his properties, and he answered by going on an aggrieved rant about how not enough people had publicly thanked him for giving up his $400,000 salary. He finished by saying, “Let’s just see what happens.”
One might argue that if other hotels and resorts are getting help, Trump’s should, too. But given his record as a businessman — the scams, the alleged pyramid schemes, the tax cheating, the bankruptcies, the hiring of undocumented workers — he would require extra oversight to make sure he didn’t bilk the system.
But if the fund is under Mnuchin’s complete control without guardrails or oversight, not only would Trump get a bailout, but there would be pressure to give money to Trump’s friends, his donors and anyone else the president deems worthy — and to deny help to those companies Trump dislikes.
Is anyone going to be surprised when Trump tweets that some company he doesn’t like shouldn’t get this help? Or when he picks up the phone, calls Mnuchin, and says, “Hey Steve, I was just talking to Bob Dufferson, great guy, owns American Widget, fantastic company, really top-notch. Once this is over they’re going to do great. Don’t forget about them”? In fact, you’d be surprised if it didn’t happen.
Any time the government starts giving away hundreds of billions of dollars, the potential for the assistance to be abused is enormous. Even with a normal administration, we’d need transparency and oversight to make sure the system isn’t corrupted. With the Trump administration, we can’t do without it.