Senate leaders and White House officials just emerged from a marathon closed-door negotiation session with smiles on their faces. Both sides now fundamentally agree on a $2 trillion stimulus package aimed at boosting the American economy. Among the largesse is $50 billion for troubled U.S. airlines and potentially even more. Hotels and cruise lines are likely to benefit too.
The legislation will send $1,200 checks to many Americans (and $500 to children), provide expansive small business loans, fund hospitals and medical research, and help larger companies hit particularly hard by the COVID-19 virus, including airlines. All told, the rescue package nearly doubled in size to $2 trillion from its initial size of $1.2 trillion.
Per the Washington Post, a key White House concession means that the Senate will have far more scrutiny over how loans are distributed to private companies under this legislation. This scrutiny will come directly and also via an independent inspector general who will be appointed to carefully analyze how the money is spent. Of the $500 billion set aside for this purpose, $50 billion has been earmarked for passenger airlines and $8 billion for cargo airlines.
Although not directly mandated in the draft bill, President Trump has indicated he also wants aid to flow to hotels and cruise lines as well.
Airlines will no doubt applaud this news, but it isn’t clear yet what sort of strings Congress will attach to aid and whether such aid will flow exclusively in the form of loans or also grants. What is clear is that the Treasury Department, led by Secretary Steven Mnuchin, will not oversee the dispersement of these funds as originally planned.
Now the lobbying effort for airlines, hotels, and other hospitably companies truly begins, as each must convince Congress and the inspector general of their worthiness for a bailout. Expect quick, but contentious hearings and several conditions affixed to airlines aid, most centering on worker protection.
This story is developing as the Senate and House now embark upon final review of the bill ahead of a conference committee to iron out any final differences and a vote scheduled for Thursday. It looks like airlines will get the bailout after all…but there may be some extra strings attached.
Do airlines deserve this taxpayer bailout? Will it stave off an even greater calamity?