Column: The coronavirus bill is a big step toward stimulus that helps you, not corporate bigwigs

Michael Hiltzik, Los Angeles Times on

Published in Business News

Eagle-eyed analysts are still poring over the language of the bill, but one provision sheltering in place and unearthed by the Washington Post is a special $17-billion bailout for Boeing. The bailout, which takes the form of loans and loan guarantees, doesn't mention the company by name and is concealed behind innocent-sounding language referring to "businesses critical to maintaining national security."

Boeing would get this benefit even though it's one of the least deserving bailout candidates. The company has squandered its cash resources for years in stock buybacks -- $43 billion from 2013 until two fatal crashes of its 737 MAX aircraft in 2018 and 2019 awoke it to the idea that maybe it should conserve cash.

As recently as Tuesday, Boeing CEO David Calhoun was taking a truculent approach to the prospects of a bailout, telling Fox Business Network that he would refuse government money if it required turning over an equity stake to the government, an idea that had been floating around in Washington.

"I don't have a need for an equity stake," Calhoun said. "If they forced it, we'd just look at all the other options, and we have got plenty."

Fine. Let Boeing chose among its "plenty" of other options.

--The uncertain: At the insistence of Democrats, the Senate Republicans abandoned their plan to grant Treasury Secretary Steven Mnuchin extraordinary discretion over the $500-billion corporate bailout. The proposal would have allowed the Treasury to keep secret for six months the identities of the recipients or their terms, and failed to provide for any public oversight.


The final bill eliminates the secrecy and creates an oversight process comprising a special inspector general empowered to audit the disbursement of pandemic bailout funds and charged with reporting quarterly, as well as a five-member Congressional oversight board.

These provisions conform, superficially, to the process established in 2018 to oversee the financial industry bailout of that era. As that progam's former inspector general, Neil Borofsky, told me this week, oversight and transparency is indispensible for ensuring that taxpayer funds aren't misused.

Borofsky also warned that the overseers should expect considerable pushback from the government officials, who won't appreciate being second-guessed. A lot will depend on the character of the special inspector general, who will be appointed by the President and confirmed by the Senate. If he or she is just a front for the Treasury, the public interest will be left in the gutter.

That's especially so since there don't seem to be provisions granting the overseer subpoena power or any method of enforcing a request for documents other than filing a complaint with Congress. That's not enough.


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