The New Gold Rush
$2,000,000,000,000. That’s a lot of stimulus and thank God for Chuck Schumer or $500,000,000,000 of it would be the private piggy bank of one of the worst businessmen of all time and would undoubtedly go to all the wrong places. As it is, The Democratic senators managed to put in a provision forbidding that any of this loan money for corporations can go to companies owned by Federal employees. Any idea who that was aimed specifically at? Yes, that means that Trump can now bemoan that in addition to the billions of dollars he has foregone by being President, he can now add that everyone else got some honey from the Federal honeypot except him and his family. I’m sure he thinks that is patently unfair that he does not get to benefit from the pork-barrel to beat all pork-barrels. It must be killing him.
While it is hard to know which summary of the new bill is accurate, the elements that seem to be in this astounding $2T subsidy program designed to prop up the virus-sagging economy, are taking shape. Some 10% of that $500B for corporations is pre-destined for specifically designated industries like airlines and other deemed critical industries. $450B is TBD. There is $350B earmarked for a special CARES (Coronavirus Aid, Relief and Economic Security) Act. That is a very complicated Small Business Loan and Forgiveness program. There is about $250 billion that will be sent out as direct deposits or checks to about 80% of Americans that earned “modest” incomes (limited to $75-200k depending on filing status). That’s $1,200 per eligible adult and $500 per dependent child. $117 billion is going to hospitals, which seems sensible under the circumstances. By my count that represents about 60% of the $2T, leaving some $783 billion between increased unemployment benefits, mortgage subsidies, tax benefits, healthcare subsidies, student loan support and state and local government assistance. There is even a $100 million provision for the Arts (including $25 million for the Kennedy Center, something Trump has regularly vetoed).
Yes, there was some partisan finagling to slide in a few things like the Kennedy Center that has nothing to do with Coronavirus. But most of the bill does what it was billed as providing, a serious shot in the arm for the economy which risks falling out of bed altogether in an election year. Unlike the bailouts in the last fiasco of 2008, this subsidy bill is far more oriented toward the common man both in terms of the direct subsidy checks being sent out and the support being provided to businesses on the condition that they keep people on payroll. And then there is the popular “socialistic” areas like student loan support, money for state and local education, and healthcare and mortgage support. This should tell us all something. The bill that Moscow Mitch laid down and that Chuck Schumer rejected last Sunday was the usual trickle-down bill that did little or nothing for common people and focused mostly on corporate bailouts. Clearly the appetite for a repeat of the last program of corporate largess which has led to significant numbers of stock buybacks and executive bonuses is very low. Despite the centrist view that Joe Biden rather than Bernie Sanders is to be the Democratic candidate, the progressive agenda must have enough currency in Congress to force a lot of these common man provisions to force their way into the bill. It also means that the Republicans must be desperate to get a bill out there to prime the economic pump quickly. Much of what the Democrats have added to this bill is offensive to the Administration and the Republicans, but still they held their noses and signed.
Naturally, the Trump Administration is already hedging themselves saying that many of the provisions and limitations in the bill are not mandatory, but are hortatory. If you don’t know what that means, what do you think the odds are that Donald knew the word? You know what it means without even looking the word up. You know it means “we don’t have to do anything we don’t want to do, no matter what the bill says.” What’s the bet that one of the things the administration says that the Federal Employees that are prohibited does not apply to Trump since he doesn’t take a salary and is thus not really an employee. A King is not really an employee after all. You watch.
Well, while Trump is scheming and figuring out how to get his spoon into the honeypot, so is every other business person and non-business person in the nation. I have been reading program summaries all day and on the phone to multiple people to understand what the CARES program has in it for my company. I know I get $2,400 since the last tax filing year was a terrible operating income loss year for me because of a tragic investment. Anyone who hears that is shocked and feels I should donate it, which I will. But that miscarriage of a slapdash program pales by comparison of what the small business honeypot rules look like. It is all based on payroll and restricted to payroll of under $100k per person, but subsidized loans that may be eligible for forgiveness are really sweet things for a start-up business, so we will go straight after them if we qualify. Fast programs never discriminate as much as they should, but one thing is for sure…someone will get the money if its allocated, so we should try to get our share.
We are a multinational company with half our staff in the U.S. and half in Scotland. We have programs in the U.K. to apply for and specifically in Scotland to apply for in addition to the programs we are applying for in the U.S. I will insist that we do things totally by the book and cut no corners nor shade any application material, but that doesn’t mean that there won’t be opportunities to apply smartly for more rather than less. Our job at this moment is to do the best we can to maximize our “as-of-right” applications for each and every program we might qualify for. I believe that will be 2-3 programs in the U.S., 2-3 programs in the U.K. and at least one Scottish program. We will not double dip, because that would be wrong, but we will try to maximize the gold in our pan during this gold rush. And why is that OK? There are little restaurants all over that are suffering and that may not have the agility to do what we are doing. But that is where I believe we deserve all we can get. We are trying to solve a big climate change problem that the world faces. Yes, we do well while doing good, but the important thing is that world really does benefit if we achieve our goals and that beats the hell out of another burger restaurant even with fries and a shake