Nel's New Day

May 19, 2020

Sour Notes Continue from the $2.3 Trillion COVID-19 Bill

As I wait for my $1,200 check—not knowing whether I’ll ever get it because “Get My Payment” says I don’t exist–I follow what’s happening with the taxpayers’ $2.3 trillion assigned to rescue the country. (And yes, I fit all the eligibility requirements.)

Checks are being sent to people who have died, and now the government is sending two $500 payments for just one child. The parent claiming a child on the 2019 return should get the $500, but in the case of divorced, separated, or never-married parents who alternate claiming the child in different years, the parent claiming a child for 2020—who might not be the same one as 2019—might also receive $500. A check was also sent to a wealthy British woman who lives in London, as well as a double payment—one to the person who owed child support and another to the ex-spouse who filed an “injured spouse” claim.

These cases, however, are just the tip of the $2.3 trillion. House Speaker Nancy Pelosi (D-CA) said that 83 percent of the money in that bill goes to the top one percent. 

A $500 billion Treasury Department fund from the Cares Act passed in March still hasn’t spent much money, according to the Congressional Oversight Commission. The group doesn’t have a chairperson because House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) disagree on the choice. The remaining four members issued a 17-page report, primarily questions about the process of the Treasury fund disbursements. The Treasury Department has created only one lending facility of $37.5 billion to purchase corporate debt. The department did set aside $46 billion for the airline industry but hasn’t disbursed any money. Guidelines for the Main Street Lending Program intended to help small and medium-size businesses—up to 15,000 employees and $5 billion in revenue—have changed. Loans are bigger; companies don’t have to claim they need the money because of the current health crisis; and applicants only need to make “commercially reasonable efforts” to maintain payroll and retain employees.

None of the $150 billion for state and local governments in the Municipal Liquidity Facility has gone out, and the Treasury Department has no response about how it and the Federal Reserve will assess success or failure of this program and the Main Street Program. Sen. Elizabeth Warren (D-MA) described the money as a “slush fund” for corporations. Democrats are skeptical of the nominee to oversee the $500 billion Treasury Fund because he won’t comment about DDT’s firing at least four inspector generals in fewer than two months or the part he played in the on-going purge. Brian Miller’s level of independence was also questioned because, as senior associate counsel at the Office of White House Counsel, he participated in protecting DDT during the impeachment trial.

Among the first 96 airline companies receiving taxpayer funds, owners of two private jet companies donated to DDT’s and GOP campaigns in 2016. Catering to well-to-do CEOs and executives, Omaha (NE)-based Jet Linx Aviation, whose owner gave $68,100 to DDT’s campaign, received $20 million. Clay Lacy Aviation in Van Nuys (CA), whose founder gave almost $50,000 to the RNC, got $27 million. The other private jet companies received about $110 million to share among 68 of them. United Airlines got $5 billion and then told employees to voluntarily leave the company while it cuts pay and organizes layoffs. Among workers moved to part-time are 15,000 airport employees. United asserts it is complying with the terms of the bailout to keep employees.

Friends with cruise line owners, DDT is adamant about protecting the companies.  To avoid paying U.S. taxes or following U.S. environmental and health regulations, cruise lines do not register as U.S. companies. The Fed, however, is offering them billions in loans. Carnival has promised to mitigate health issues, but the cruise industry avoids most U.S. regulations

Big oil is getting $1.9 billion in tax breaks designed for small businesses. Diamond Offshore Drilling, already headed into bankruptcy, received a $9.7 million tax refund and then asked a bankruptcy judge to authorize the same amount as bonuses to nine executives. Its tax refund was small compared to the $55 million for Antero Midstream, $41.2 million for Oil States International, $96 million for Devon Energy,  $110 million for Valero, $195 million for Oxy, and $411 million for Marathon. The oil industry was using its financial problems from before the health crisis to get generous subsidies. Three coal companies with ties to DDT are receiving $22 million.

In addition to $16 billion in direct subsidies for oil and gas, the industry is lobbying for another $100 billion in tax cuts—especially for Halliburton and ExxonMobil. The IRS Inspector General found that almost $1 billion in credits were fraudulently claimed so GOP senators demanded that the tax credit be expanded and made permanent in the next COVID-19 stimulus bill. The Interior Department is granting royalty relief by reducing or eliminating the share due to taxpayers for oil and gas extracted from public lands and waters.

The fossil fuel industry has been getting trillions, likely $20 billion or more a year for over a century. The cost of these subsidies could be as high as $649 billion a year. The Department of Education gets $68 billion, and the National Institutes of Health $42 billion for 2020. Oil and gas companies needed bailouts not because of the health crisis but because they took on massive debt to drill more wells, leaving a glut of oil. Their stock placed last in the S&P 500’s index for the last decade.  

Energy Secretary Dan Brouillette admitted during a television appearance that the White House pushed the Federal Reserve to benefit fossil fuel companies by changing a lending program but that there was no encouragement to keep workers on the payroll. Bharat Ramamurti, a member of the Congressional Oversight Commission, has asked for an investigation after Brouillette said DDT personally told him and Treasury Secretary Steve Mnuchin to guarantee “access for these energy industries to those programs.”

A wealthy nonprofit think tank with a $115-million endowment and billionaire trustees, Aspen Institute, received $8 million in small business funds but decided to return it after negative publicity. The 72-person board includes Chairman James S. Crown, a member of one of America’s wealthiest families, and former Disney chairman Michael Eisner.

As the Federal Reserve gives out trillions of dollars in taxpayer money to large corporations, the recipients and amounts can be kept totally secret with no accountability. Terms, collateral, repayment, etc.—all these and more may never be revealed. Despite a 1976 law after Watergate that federal agencies’ meetings “be open to public observations,” closed-door meetings deliberating who and how much don’t need minutes until December 31, 2020. The record of votes can also be kept hidden during the COVID-19 crisis. Dispersing about $450 billion of the $500 billion bailout fund, the Federal Reserve can leverage that amount into $4.5 trillion.  Late last month, the Fed pumped $1 trillion a day into the banking system.

Small businesses—really small businesses with under 50 employees—are suffering around the country, but three-fourths of the 12,000 Catholic churches applying for money are thus far being given money from the stimulus law. Forty percent of Protestant churches applied for financial assistance and 59 percent of them also get funding. The bigger the church, the more likely it is to have applied. Among applications from Jewish organizations, 219 synagogues received over $50 million, and another 391 asking for $106 million are waiting for responses. Churches want money because their donations are down.

One goal of the Republicans is to use the COVID-19 crisis to cut Social Security benefits. Now that the huge corporations are getting trillions of dollars, Republicans are expressing concern about expenditures. One proposal, the Eagle Plan, pays individuals $10,000 in exchange for delays and/or cuts to Social Security benefits. The program is the brainchild of Jared Kushner and the State Department, odd because that agency isn’t in charge of domestic policy. DDT has said that he will not sign any future stimulus bill that doesn’t cut the payroll tax, money that pays for Social Security and Medicare.

Two months after the first COVID-19 relief bill went into law, it has been called insufficient, misguided, or both by a cross-section of lawmakers, economists, business groups, and labor advocates. One mistake was not paying companies directly to keep workers employed, a system used in some European countries. Instead, loans to companies went through the funnel of commercial lenders and were managed by the Small Business Administration. Black-owned businesses were disproportionately disadvantaged because tiny businesses with little credit and no relationship with lenders were bypassed for funding provided to firms with as many as 500 employees, also called a “small business.”

Banks didn’t receive guidance to prioritize rural businesses and those owned by veterans, women, and economically-disadvantaged people. The SBA didn’t provide a way to request this demographic information, but it did require that 75 percent of the money go to payroll although this was not part of the law.

Data shows that construction businesses, which didn’t stop during the crisis, got $45 billion more than any other sector. The second largest amount went to professional scientific and technical concerns whose lawyers, accountants, and financial planners worked from home. Publicly traded companies already doing poorly for decades did well in the bidding process.

As Republicans move forward with deregulation hidden under the health crisis, look for small bank failures as lawmakers and lobbyists push for the removal of financial safeguards. That will be the next need for bailouts.

May 19, 2020: 1,570,583 confirmed cases of COVID-19 (despite states concealing their numbers) in the U.S. with 93,533 deaths, and 37 states testing more than the U.S. based on numbers per million population.

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Mind-Cast

Rethinking Before Restarting

the way of improvement leads home

reflections at the intersection of American history, religion, politics, and academic life

© blogfactory

Freely reported with that local taste

Civil Rights Advocacy

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. -- Margaret Mead

AGR Daily News

Quaker Inspired, Evidence Based, Art And Science Of Sustainable Health Plus Success - How To Create Heaven On Earth - Education For Seventh Generation Rainbow Warriors

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Jennifer Hofmann

Inspiration for soul-divers, seekers, and activists.

Occupy Democrats

Progressive political commentary/book reviews for youth and adults

V e t P o l i t i c s

politics from a liberal veteran's perspective

Margaret and Helen

Best Friends for Sixty Years and Counting...

Rainbow round table news

Official News Outlet for the Rainbow Round Table of the American Library Association

The Extinction Protocol

Geologic and Earthchange News events

Social Justice For All

Working towards global equity and equality

Over the Rainbow Books

A Book List from Gay, Lesbian, Bisexual, and Transgender Round Table of the American Library Association

The WordPress.com Blog

The latest news on WordPress.com and the WordPress community.

%d bloggers like this: