Durbin denies Congress is rescuing airline shareholders with $50 billion bailout
The law stipulates the companies have to use the grants exclusively for employee wages, salaries and benefits. They also have to temporarily stop stock buybacks and dividend payments to receive aid.
The legislation sets aside $8 billion for cargo carriers, half in direct payments and the other half in loans. It also provides $1 billion to $3 billion for the health costs of airline contract caterers.
But the structure of loans to airline carriers has yet to be determined, and airlines have until Friday to submit their proposals to the Treasury Department. Treasury Secretary Steven Mnuchin and others in the Trump administration have repeatedly said they want the government to make money off any aid to airlines, and that could be through equity stakes.
Members of Durbin’s party have questioned the wisdom of the airline aid. They worry the bill did too much to boost struggling corporations but not enough to help Americans scrambling to cover bills after losing their jobs.
Airline stocks have taken a drubbing during the coronavirus crisis. Shares of industry titans United, Delta and American had plunged 58%, 49% and 43%, respectively, in the past month ahead of Thursday’s stock market open.
While the companies’ shares climbed in the days leading up to passage of the relief bill, they tailed off again in trading early this week.
Lawmakers have started to look ahead to another coronavirus response bill after the stimulus package, the third piece of emergency legislation approved during the pandemic. COVID-19 cases in the U.S. have topped 200,000, and roughly 10 million people filed new jobless claims in the past two weeks as businesses across the country shutter.
Durbin unequivocally called for a new bill Thursday, even as Republican leaders in the chamber say they want to wait to see how effective the last rescue bill is.
“I’m prepared to vote for more, period. No ifs, ands or buts about it,” he said.
Article source: https://www.cnbc.com/2020/04/02/coronavirus-update-dick-durbin-says-airline-bailout-not-for-shareholders.html