The airline industry began begging for bailout money the moment it became clear that our country would need to put together a package to help Americans during the COVID-19 pandemic. Right away, one of the problems that most Democratic representatives saw was that every time big corporations like airlines get taxpayer money, whether through Republican tax giveaways, or the last economic bailout in 2009, they tend to spend it on buy backs and C-suite executives—not on their workforce or on creating a more robust business model. In fact, the airline industry spent 96% of its free cash reserves on stock buy backs over the past decade. They did this instead of making sure they could withstand a downturn in the economy, or say, a catastrophic global pandemic.
But, the CARES package went through with hundreds of millions of dollars held secretly by Treasury Secretary Steven Mnuchin, suspected of using the taxpayer reserves to make big corporations beg and cut deals behind the scenes. Sort of an incentive to pay to play. ProPublica reports that a House Select Subcommittee on the Coronavirus Crisis led an investigation, published Oct. 9, showing that the no-strings attached money given away by the Trump administration didn’t go to secure workers’ jobs during the economic downturn. Instead, airlines used the money in the same way Mnuchin used it, to hold onto, while shedding workforce, and then boosting management.
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Part of the CARES Act was $32 billion Payroll Support Program that was earmarked to help companies pay workers and therefore retain them and their health benefits during this emergency time. (Disclosure: Kos Media received a Paycheck Protection Program loan.) However, it turns out that companies were simply laying off workers during this time, while pulling in that sweet cash for the jobs they had gotten rid of. Steven Mnuchin and Donald Trump didn’t want there to be any oversight for the Payroll Support Program, and made no effort to create any real incentive for these companies to actually distribute the money through their workforce.
A Treasury spokesperson wrote to ProPublica that “the Payroll Support Program has supported hundreds of thousands of aviation industry jobs, kept workers employed and connected to their healthcare, and played a critical role in preserving the U.S. airline industry. Implementation focused first on the largest employers to help stabilize an industry in crisis and support as many jobs as possible for as long as possible.” Like everything in this administration this is a statement of things that are supposed to happen but evidence of greed and corruption contradict every fact free assertion the White House makes.
The evidence, as the report explains, shows that the Treasury Department either neglected, were incompetent, didn’t care, or (most likely) all of the above, in their handling of American taxpayer money. The report highlights that Mnuchin for one, allowed companies to fire workers right up until enacting the agreements. So instead of incentivizing companies to keep workers, Mnuchin and friends incentivized companies to furlough and fire as many workers as possible before signing the agreements.
These agreements were based on 2019 payrolls, and tens of thousands of workers were laid off by these companies in between asking for the money and receiving the deal for the money. This meant that Trump’s Treasury didn’t reduce the amount of cash being given out once it became clear that the aviation companies didn’t have the number of jobs they were asking assistance for.
The Treasury also did not require these companies to spend the money they were being given by a certain time. This meant that companies like Flying Food Fare just took around $85,000,000 from the government, fired a couple thousand workers, and continue to hold onto cash while not rehiring those workers.
And as the CARES Act expires, tens of thousands more airlines workers have been laid off, as well as thousands of workers in other industries that have been given hundreds of millions of dollars in no-strings attached bailout money. As the months go by it is guaranteed that oversight committees and investigative reports will show that big business after big business hoarded most of the taxpayer money given to them during the initial COVID-19 CARES Act. The guarantee comes from the fact that without regulation, big business does one thing: it collects money for the very few people on top that it makes money for.