As Coronavirus-Hit Industries Request Bailouts, Not All Want To Oblige Them

Mar 20, 2020
Originally published on March 20, 2020 1:02 pm
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Stocks have come crashing down because of the coronavirus. The Dow is now 35% lower than its record high last month. It's no wonder companies all over the country are saying they need a bailout. Congress is preparing to spend hundreds of billions of dollars to help them, but not everyone thinks that's a good idea, as NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: Just in a matter of days, the bottom fell out of the U.S. airline industry. Here's Nicholas Calio of the trade group Airlines for America on CNBC today.

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NICHOLAS CALIO: I've never seen anything like it; no one has. The speed and degradation of the business has been just mind-boggling.

ZARROLI: And it's not just airlines under siege - cruise ships, restaurants, even Native American casinos have seen their revenue fall off a cliff, and they're lining up for help. President Trump says these companies aren't to blame for what's happened, and he's made clear he's ready to assist them.

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PRESIDENT DONALD TRUMP: We're also looking to help companies such as the airline industry within the airline industry, and we'll be doing that.

ZARROLI: For Republicans who bitterly opposed the Obama administration's auto bailout, the idea of extending federal largesse to companies hurt by this epidemic is hard to swallow. Here's Nebraska Sen. Ben Sasse this week.

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BEN SASSE: If you're an industry with a good lobbying team, you're told to line up at the door of the Treasury Department and get in line because bailout after bailout is probably in the offing.

ZARROLI: And former U.N. Ambassador Nikki Haley dislikes the idea of an airline bailout so much that she resigned from Boeing's board yesterday. Opposition notwithstanding, Congress is plowing ahead with a rescue bill. Republicans in the Senate have proposed a $150 billion plan for distressed companies. There would be a separate pot of money for airlines and air cargo companies says Senate Majority Leader Mitch McConnell.

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MITCH MCCONNELL: We're not talking about a taxpayer-funded cushion for companies that made mistakes. We're talking about loans.

ZARROLI: For their part, Democrats want conditions attached to any rescue money, like promises not to cut jobs. And they want more of it to go to fund unemployment insurance for the hundreds of thousands of people getting laid off. However the money is distributed, the rescue poses big problems, says Jeff Myron, director of economic studies at the Cato Institute.

JEFF MYRON: This is just going to end up being a big transfer to those industries that are politically well-connected and can paint a case that makes it look as though they were especially hard-hit by the epidemic.

ZARROLI: Myron says once Congress starts handing out money, where does it stop? Why not rescue universities or even sports teams? They've been hurt by the virus, too. Dennis Kelleher is president of the Wall Street reform group Better Markets. He says a lot of companies have been badly managed in recent years and may not deserve to be saved. They borrowed too heavily, for example. And, often, the money went not to their employees but to fund share buybacks that just made their stockholders wealthier.

DENNIS KELLEHER: Taxpayers should only have to provide aid to companies that are vital to the United States and only companies that otherwise act in a responsible manner.

ZARROLI: Kelleher points out that the big Wall Street bailout of 2008 proved to be especially unpopular with the public with lasting political effects. And he says the onus is on Congress to do a better job this time.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.