In the middle of the night Wednesday, on a 96-0 vote, Senate Democrats and Republicans passed an emergency spending bill meant to shore up the economy against the growing coronavirus catastrophe. The $2.2 trillion price tag makes it the biggest such legislation in history, equivalent in size to about half of all current annual federal spending, more than three times what we spend on national defense each year, and four times the cost of the Medicare.
As you might imagine with any bill of this magnitude, it includes many valuable measures that Democrats, led by Senate Minority Leader Chuck Schumer, fought against the Republican majority and President Trump to include: a tripling of unemployment benefits, hundreds of billions of dollars to help hospitals buy personal protective equipment and testing, and increased funding for community health centers, Medicare payments, and the CDC—which Trump infamously tried to cut just prior to the pandemic.
Democrats and a few likeminded Republicans also managed to stop some bad ideas, most notably a widely-panned GOP proposal to shortchange the poorest Americans in provisions that call for sending checks to most Americans.
But new data from Navigating Coronavirus, a project I help run with the polling team at Navigator Research and other partners, indicates serious trouble brewing around one key component of the plan—the one that has been Trump’s top priority since the day this legislation became necessary.
Since the crisis began, and even before, the president has been fanatically obsessed with Wall Street and the Fortune 500 CEOs who give him marching orders. He notoriously ignored and played down the coronavirus risk to keep the tally of infections artificially low, and goose the stock market. He’s surrounded himself with Big Bankers, Big Pharma, Big Oil, and hospitality and retail CEOs. As one columnist put it, “They play their part by showing up on command, praising his wisdom and foresight, getting their pictures taken and expressing confidence in the future into the microphones. Then they leave Washington and do what they please.”
So it’s no surprise the single biggest provision in the rescue package is a half-trillion dollar bailout program for large corporations. The $550 billion fund is bigger than Trump’s budget proposed to fund the Departments of Health and Human Services, Veterans Affairs, Education, Homeland Security, State, Energy, Justice, Transportation, Agriculture and Labor combined. It promises taxpayer-funded loans and loan guarantees from the Trump administration to “severely distressed” sectors, as well as direct subsidized giveaways to certain industries.
Take, for example, the airlines. The plan essentially cuts a $25 billion check to giant companies like Southwest, American, Delta, and United, all in the form of a federal grant. These companies are important to our economy, sure. But these “Big Four” airlines also spent the past five years spending more than $40 billion to enrich shareholders through so-called stock buybacks.
These massive corporations also reaped huge benefits from Trump’s 2017 corporate tax cuts. An Institute on Taxation and Economic Policy report from March 10 lays it out: “In the two full years since the Trump corporate tax cuts took effect, seven large U.S.-based airlines reported $30 billion of U.S. pretax income and paid an average effective federal income tax rate of 2.3 percent. One of these companies, Southwest Airlines, accounts for most of the income taxes paid by this group of companies. The other six—Delta, American, United, Alaska Airlines, Spirit and Jetblue—paid effective rates in the single digits or negative during this two-year period.”
American’s CEO was so cocky about the company’s financial situation that he vowed in 2017: “I don’t think we’re ever going to lose money again.”
He was wrong, and now taxpayers are delivering them billions.
Democrats fought hard to prohibit companies that receive bailout funds from buying back stock, and giving their executive lucrative bonuses. But, according to the Washington Post, “those provisions last only a limited time.” And worse, for most companies the legislation does not actually prohibit bailout recipients from laying off their workers; it simply says they must keep workers employed to “the extent practicable.” The entire point of giving them money should be to prevent them from firing employees.
This provides just a glimpse of what Democrats should expect to see in a few months. The rescue package is loaded up with special interest loopholes, including one that could even let Trump himself get a bailout for his hotel company. And Democrats need to be ready for the fallout.
New Navigator Research data carries an ominous warning. By a 12-point margin (49-37), Americans believe Trump’s policy response to coronavirus’ economic impacts favors the wealthy and big corporations instead of workers and families, and the sentiment is rising: it is up seven points from just a few days ago. Notably, Independents believe this by an even larger 26-point margin (48-22). These numbers and swings are particularly alarming because we’re only days into the national conversation about this rescue bill. As large companies receive billions in federal funds, the coming months almost guarantee damning revelations about CEOs and executives using taxpayer money to do damning and unpopular things. The New York Times already reported Thursday that CEOs could still receive millions under the U.S. aid plan.
We saw this movie before, just over a decade ago, and it ended with a slow recovery and high rates of waste, fraud, and abuse. The investigative journalists at ProPublica are still trying to track down funds from the 2008 bailout.
We can’t fault Democrats for taking swift, needed action to shore up the economy, and it’s Democrats who deserve credit for making sure the rescue bill included more layers of oversight after Republicans wanted to give Trump and his administration an unaccountable secret slush fund. It’s especially admirable since we know from experience that Republicans would not have been there to help if coronavirus had struck under a Democratic president.
But Democrats who supported the bill should speak up now—and consistently over the coming months—about their opposition to the unaccountable corporatism Trump and his Republican allies pushed. Throughout his term, and during this crisis, Trump seems intent on rewarding the wealthy for their wealth, and bailing them out with no questions asked when they want help. Particularly when they praise and do political favors for him. Democrats need to offer a firm contrast by standing up for people who work for a living.
Immediately, we need to communicate the need for bigger, more structural economic reforms that exclusively help working and middle class Americans. They’re the ones who need a bailout. Over three million have already lost their jobs; a cataclysm even Trump’s team thinks it’s no big deal.
The good news for Democrats and progressives is that Americans are with us. They agree we need big, sustained federal intervention in the economy. The new Navigator data finds 57 percent of Americans want the federal government to do more to improve the economy, including half of independents. Even Republican support has increased five points just this week. Two-thirds of Americans, including six in 10 Republicans and independents, say the federal government shouldn’t just respond to near-term effects of coronavirus but also help people economically over the long term.
Democrats must begin communicating our values and our criticisms of the economic response to this crisis right away. We should channel the public’s evident concern about the wealthy benefiting from Trump’s response and oppose his big-business bailouts that could allow CEOs to walk away with millions of taxpayer dollars while leaving their employees stranded. We need to immediately pivot to new demands for long-term economic policies that advantage workers and their families, not those at the top.