According to a letter from Minority Leader Charles E. Schumer laying out some of the provisions in the package, “laid-off workers, on average, will receive their full pay for four months.” In addition, self-employed and gig workers, who are normally not covered by the unemployment insurance system, will receive benefits.
Now let’s talk about that “slush fund.” At $500 billion, it’s the single largest component of the package.
In the administration’s original proposal, Treasury Secretary Steven Mnuchin would have had the sole discretion to decide which companies get assistance and how much — and he would have been able to keep that information secret for six months.
There would have been no oversight. At one point, when asked about it, President Trump said, “I’ll be the oversight,” which was not exactly reassuring.
So Democrats forced Republicans to accept the appointment of an inspector general within the Treasury Department solely devoted to monitoring the distribution of this money, as well as a five-member bipartisan oversight board appointed by Congress. There will also be “real-time public reporting of Treasury transactions under the Act, including terms of loans, investments or other assistance to corporations,” according to Schumer’s letter.
In addition, Democrats secured a provision to “Prohibit businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs.” Which means that the Trump Organization will not be getting help to make up for its lost business at Mar-a-Lago and all the other Trump hotels, golf clubs and resorts.
What’s so disturbing is that this was even necessary. But, of course, it was. No one, Republican or Democrat, could say with a straight face that if such a measure had not been in place, Trump wouldn’t have made sure to get his own piece of the pie.
In the scope of a $2 trillion aid package, what does or doesn’t go into the president’s own pocket is substantively trivial, even if it has great symbolic value. But that doesn’t mean the potential for corruption has been eliminated.
If you think companies with connections to Trump and his family won’t still try to use their influence to maximize their payouts, you can’t be familiar with how things work in Trump’s Washington.
Even for companies that aren’t well-connected, there will be a temptation to fudge the numbers and ask for more than they may need. And even with public reporting, an inspector general and an oversight panel, there will still be a mad rush from companies to get as much of that $500 billion as they can.
So yes, we’ll be able to know who’s getting the money and how much they got. But sunshine only goes so far, if the rules are written so corporations don’t have many constraints on what they do with the money. The inspector general may be on the lookout for outright fraud, but the real problem could be what’s legal.
From what we know right now, while we await the bill text, the protections and restrictions don’t seem all that strong.
Schumer’s letter says the bill will “add a retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis,” and if they’re given an extra tax credit for doing so, that suggests that keeping workers on the payroll might not be a requirement of the larger bailout fund.
That could mean companies could take the loans, then lay off their employees anyway (if they haven’t already). Again, we’ll need the details.
Democratic lawmakers have pushed for more limits on the funding, including protections for workers’ health-care benefits and pension funds, but have largely been rebuffed, according to one person with knowledge of the deliberations.
Boeing, however, did get a $17 billion carve-out for companies deemed “critical to maintaining national security,” which seems to have been created mostly for them.
There are some things Democrats got in the negotiations, such as a provision banning corporations from making stock buybacks for as long as they’re getting the assistance plus one year. And while Schumer refers to “robust worker protections attached to all federal loans for businesses,” he doesn’t specify what they are, so we don’t know if they really are robust or trivial.
But, at bottom, the biggest portion of this package is a corporate rescue. One could argue that even if it was managed well and implemented with integrity — a near-impossibility in this administration — it would still be problematic because it lays spectacular amounts of money at the feet of large corporations that have spent years making enormous profits while doling out peanuts to the people who do the work.
Yes, the government is spending hundreds of billions on people, in the form of checks, boosted unemployment insurance and other measures. But one thing’s for sure: As usual, the corporations are getting what they want.