Center for American Progress Action

Corporate welfare and forced labor: A guide to the Trump Administration’s coronavirus response

Corporate welfare and forced labor: A guide to the Trump Administration’s coronavirus response

EyeEm via Getty/ Narongrit Sritana

President Trump says his administration is looking out for workers. “These are real workers. I love the workers. We’re doing a good job for the workers,” Trump said during a 2017 visit to Wisconsin. Since the pandemic began, this rhetoric persisted. “I want the workers to be taken care of,” he said during his recent visit to Pennsylvania.

His administration’s approach to reopening the economy, however, would force workers back to work during a health crisis without adequate protections or testing, or risk losing unemployment insurance. This after offering inadequate survival aid for most workers.

On the other hand, corporations are getting their wish lists fulfilled at the behest of the White House, such as $500 billion from an overflowing Treasury Department slush fund and a liability shield from workers who contract the coronavirus at dangerous workplaces.

Corporate handouts

Since March, 36.5 million Americans have filed for unemployment benefits in the last two months. That is an undercount, as it does not include the millions who could not take a job or the millions who were not actively looking for work.

White House trade adviser Peter Navarro dismissed concern about the pandemic’s effect on the economy last week, however, saying “this Great Depression pity party stuff I saw yesterday, this ain’t that.” On Monday, White House economist Kevin Hassett told reporters the administration had “a little bit of a luxury to watch and see” how the economic devastation unfolds before deciding whether more aid is needed.

Thus far, the Trump administration’s response to the economic fallout from the coronavirus pandemic has focused on helping large corporations at the expense of average workers.

$500 billion slush fund

On Tuesday, Treasury Secretary Stephen Mnuchin and Federal Reserve Chair Jerome Powell both testified before the Senate Banking, Housing, and Urban Affairs Committee about the federal disbursement of the funds in the stimulus package. Sen. Elizabeth Warren (D-MA) asked Mnuchin, “Congress placed nearly half a trillion in corporate bailout money in your hands. The law gives Treasury & Fed authority to write detailed rules determining which companies get taxpayer relief. Will you require companies to keep their workers on payroll?” The Treasury Secretary admitted that he would not.

Larger corporations with easy access to large banks also found it very easy to receive millions in taxpayer money intended for small businesses. A Washington Post analysis found that almost 300 publicly-traded companies received over $1 billion from the fund, initially meant to help small businesses stay afloat. Some of the recipients paid executives multi-million-dollar salaries. Over a dozen of the largest and most prominent said they would return the money after waves of public outcry.

The $500 billion fund, run by the Federal Reserve, had issued $37.5 billion as of Monday, according to a report from the Congressional Oversight Commission. Most had gone to purchase corporate debt. The administration has not disbursed any money from the Main Street Lending Program, which is meant to aid midsize businesses. The administration has also not released any names or documentation to the public about which companies have received funding, though it is expected to do so in the future.

One recipient that is known is a private jet company, Clay Lacy Aviation, founded by a Trump donor. The company, which services celebrities and rich business executives, received $27 million from the Treasury Department. Clay Lacey Aviation has said that the money will be used to protect the jobs of its employees. A second private jet company founded by a Trump donor, Jet Linx Aviation, received $20 million. While this pales in comparison to the billions received by the passenger airline industry, both companies’ bailouts were far larger than the average disbursement to other private jet companies.

CEOs and Banks Siphoned Off Billions Worth of Small Business Aid

The SBA loan program, meant to help small businesses, saw over $10 billion of its funding go toward bank fees to service the loans and hundreds of large publicly traded corporations — including several with CEOs that made over $2 million annually — received aid. It got off to a chaotic beginning as demand exceeded supply and the system was overrun. Over 80 percent of small businesses who applied failed to receive any aid after the first installment. Once things calmed down and even more funding was allocated, things did not improve for everyone. A survey by Global Strategy Group found that only 12 percent of minority-owned businesses who applied for aid received it.

Corporate liability shield

As states and localities reopen and workers return, they may face workplaces that do not have adequate protection: social distancing, personal protective equipment, cleaning, and testing. Should a worker get sick and spread it to their coworkers because their employer failed to protect them, they could face legal consequences.

Unless the Trump administration succeeds in negotiations with Congress to put in place a liability shield for corporations that prevents workers from seeking justice for unsafe workplaces that get them sick.

Stephen Moore, a member of the White House council to reopen the economy, said he forwarded the idea to the White House after hearing from businesses, and recommended that a corporate liability shield must be a part of any package the president will sign.

Corporate Tax Breaks

Two years after signing into law a tax bill aimed at cutting corporate taxes and income tax rates for the wealthy, President Trump’s allies in Congress included $174 billion in tax breaks that go overwhelmingly to large corporations and the wealthy. This includes things like complicated tax loopholes that allow changes in how corporations offset losses. These loopholes have no preconditions that the companies keep workers on their payrolls, for instance.

The law also allowed huge tax breaks for the oil and gas industry. One offshore drilling company, moving toward bankruptcy, received a $9.7 million tax rebate thanks to the CARES Act, but then directed the same amount of money to nine executives in the form of bonuses. Thus far, according to an analysis by Bloomberg News, 37 fossil fuel industry corporations have raked in $1.7 billion from provisions in the law.

Threats to workers

Last month, as states like Georgia moved to reopen their economies as cases continued to rise, workers faced a difficult decision. Return to their workplaces and potentially get exposed to the coronavirus, or stay home and forfeit access unemployment benefits. As governors follow White House encouragement to open their economies early, reopening employers are technically offering people work. Turning down gainful employment is usually a disqualifying act for unemployment insurance, but that is premised on workplaces being safe, not operating in violation of the President’s own published guidelines for a pandemic.

Unemployment assistance under fire

Trump Administration Labor Secretary Eugene Scalia has used the authority he has to limit the number of people who can qualify for unemployment assistance. Gig workers face particular difficulty proving with burdensome paperwork they cannot work, thanks to the way the Trump Labor Department has defined the qualifications. On the other hand, businesses have an easier time proving they do not have to provide paid leave to parents caring for children out of school.

Other countries have relied on much stronger unemployment assistance programs which were utilized during the pandemic to nearly replace paychecks on an ongoing basis until the economy can open up safely. In the United States, many people were eligible for a one-time check of up to $1,200.

Unsafe workplaces

The Labor Department has also slowed down OSHA guidance that called for employers to require the use of face masks. The department could also make CDC guidance around social distancing and sanitizing work stations mandatory — including for health care workers — but chose not to do so.

Workers who are back at work, or never left their posts, are getting sick. An analysis from the Associated Press found that, “of the 15 U.S. counties with the highest per-capita infection rates between April 28 and May 5, all are homes to meatpacking and poultry-processing plants or state prisons.” These plants were generally directly forced to stay open by President Trump even as cases were running rampant.

Trying to take away the ACA

Even amid the pandemic, and with no health care plan of its own, the Trump administration still moved forward in its fight to end the Affordable Care Act. Earlier this month, The Justice Department filed a brief in support of a case the Supreme Court will hear in October that could completely throw out the ACA. The consequences of success in the Supreme Court would be catastrophic, throwing tens of millions off health coverage and sending health markets into chaos, all potentially in the midst of an ongoing pandemic.

Prioritizing Trump appointees and corporations over working people

But the Trump administration is looking after itself. After several staff members tested positive at the White House, President Trump implemented daily testing procedures and mandated visitors wear face masks to protect Trump and his staff. White House staff also enjoy paid sick leave and health insurance. And federal appointees and career officials will likely be able to telework for months.

The Trump administration has prioritized the corporations over the health and economic well-being of working families for years. This contrast is even sharper amid a pandemic that is affecting America more than anywhere else in the world, thanks to a lackluster federal response. It didn’t have to be this way.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.