Congress To Bail Out Firms That Avoided Taxes, Spent Billions On Stock Buybacks
Airlines, hotels, cruise lines, coal companies and more have asked the federal government for help weathering the coronavirus crisis, but labor advocates, some economists and many everyday Americans are struggling to conjure up sympathy for their plight.
As The Washington Post noted, “many of these companies behaved in ways before the current economic crisis that are making a bailout tough to swallow,” including skipping out on paying taxes, investing in stock buyback programs, and otherwise failing to return their excesses to the workers they employ.
But Congress is looking to bail out those companies as part of a $2 trillion aid package funded by American taxpayers.
The problem with not moving forward with the bailout, The Post noted, is that these companies employ hundreds of thousands of people, like servers, flight attendants, housekeepers, janitors, security guards, and others — and unemployment is already projected to his 20 percent this year.
“You don’t want to reward companies for doing shortsighted, short-term things the past 11 years. You don’t want to reward them for stock buybacks and excessive CEO compensation,” Greg LeRoy of Good Jobs First, an advocacy group that tracks corporate subsidies, told the newspaper. “The trouble is a lot of the companies that are in trouble right now are the ones that have been doing that.”
Even President Donald Trump, who gifted corporations a massive tax break in 2017, addressed the issue this week, saying Monday that he “may be a Republican” but wants to see companies using their money to invest in workers.
“I don’t want to give a bailout to a company and then have somebody go out and use that money to buy back stock in the company and raise the price and then get a bonus,” the president said.
And many of these companies are good at the stock buyback game.
The Post reported that hotel giant Hilton just announced a $2 billion stock buyback on March 3 — well after the coronavirus crisis had begun affecting the hotel industry. “Hilton Worldwide has purchased roughly 55 million shares since 2017 for $4.3 billion, including the stock buyback announced March 3,” the newspaper reported.
It remains unclear what stipulations, if any, Congress will place on stock buybacks for companies receiving relief from the government.