While lawmakers consider an immediate aid package for workers hashed out by Democratic leaders and the White House, Trump and his aides have been meeting with business leaders and industry groups to design an aid package — through tax relief and emergency loans — for the corporate sector.
Core to their challenge: Everyone can’t get special help, so the government must pick winners and losers from a downturn — with a focus on industries whose collapse could ripple through the system most. It’s a debate that will accelerate in the coming days as the economic consequences of the crisis become clearer.
Airlines were the first industry that came to mind for Douglas Holtz-Eakin, president of the American Action Forum, a conservative think tank.
While strong employment insurance systems and social safety net programs will take care of workers, he said it’s important to think about “what industries have a spillover value to the rest of the economy.”
“I think of transport — whether it’s trains or trucks or airplanes. You want to look at those and where there’s distress that you can help, you want to go in and do that because it spills over to every part of the economy,” said Holtz-Eakin, a former director of the Congressional Budget Office. “I don’t think the same case can be made for restaurants and hotels. I care about the workers and employees, but you know when you build restaurants and invest in hotels, you take business risk. And this will be a bad year for them.”
President Donald Trump has already vowed to help both the cruise line industry and the airline industry, and in a White House sit-down with top health insurance executives, said his administration is already “working very closely” with both.
Treasury Secretary Steven Mnuchin told lawmakers this week that the administration was considering loan guarantees and other measures to aid the airline industry amid the pandemic.
“I want to be clear: This is not bailouts. We are not looking for bailouts,” he said. Mnuchin added, “There may be specific industries that are highly impacted by travel that have issues with lending” — and “I would assume the airlines would be on the top of the list,” as well as hotels and cruise lines.
Josh Bivens, director of research at the Economic Policy Institute, a liberal think tank, said industry-focused measures aren’t the solution, yet.
Instead, he said the administration should focus on people and workers to attack the crisis. “If we don’t do much to respond to it, I think it’s very likely to cause a recession,” Bivens said.
If the administration does move to bail out industries such as airlines, Bivens said it should be done through loans — leaving direct fiscal aid for individuals.
Source: politico.com
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