Jake Johnson, Nomi Prins

[This article has been edited by us, using additional inputs from the following articles:

• Alana Abramson, Philip Elliott, March 25, 2020, President Trump Signs $2.2 Trillion Coronavirus Stimulus Package Into Law, https://time.com
• Jack Rasmus, “US Senate’s Final Stimulus Bill: Why It Won’t Be Enough”.]

President Donald Trump signed a historic $2.2 trillion relief package into law on Friday. The bill, the biggest economic stimulus package in United States history, was passed unanimously by the Senate on Wednesday and by voice vote with near-universal support in the House on Friday.

Here’s what the terms of the stimulus package looks like, according to initial summaries by the Washington Post and CNN:

• Middle class and worker households would get $500 billion in the form of direct checks ($250B) and increased unemployment insurance benefits for the next four months ($250B)
• Corporations and businesses would get $867B–$367B of which would go to small businesses, and another $500B to large corporations like airlines, defense companies, cruise lines, hotels and other companies.
• Additional funding of $130B would go to hospitals to purchase needed medical supplies.
• State and Local governments get $150B.
• Other funds would be provided by the government’s Small Business Administration  ($10B) to help pay their debt. Reference is made in the package as well for another $20 in farm bailout, raising that total from the $30B spent to date during the US-China trade war to $50B.  While it appears the $130B for hospitals and $150B for local governments is in addition to the $867B to business and $500B to households, it’s not clear if the $20B farm bailout and $10B additional SBA are included in the $867B or not.

[The above spending totals approximately $1,650 billion! It is being reported as a $2.2 trillion stimulus effect and increase in US GDP overall.  As Trump’s advisor, Larry Kudlow, has said on a previous occasion, the $2T represents the spending plus the ‘multiplier effect’. $2T is not therefore the actual spending. That is less, around the $1,650T estimated here. The difference is a multiplier effect of about $400B.]

The biggest beneficiaries of the relief bill are the corporates – a  quarter of it, $500 billion, goes to them. Of this, $50 billion is to be dedicated to the airline industry. But the biggest chunk, at least $454 billion, will be to back Federal Reserve-based corporate loans. The Fed has the magical power to leverage, or multiply, money it receives from the Treasury up to 10 times over – this means effectively a funding of up to 44.5 trillion for corporations. Who gets what will be largely Treasury Secretary Mnuchin’s choice. And mind you, we may never know the details since President Trump is committed to making this selection process as non-transparent as possible.

Bloomberg has also confirmed that the NY Fed has outsourced picking the lucky recipients for this slushy cornucopia to a private contractor, BlackRock, the world’s largest asset manager (Goldman Sachs apparently has done enough of “God’s work” this time).

It is because of this that President Trump noted while signing the bill into law, that total government coronavirus aid could, in the end, reach $6.2 trillion.

So you have $4.5 trillion is for support for big banks and corporate entities versus something like $1.4 trillion for regular Americans, small businesses, hospitals, and local and state governments. That 3.5 to 1 ratio signals that, as in 2008, the Treasury and the Fed are focused on big banks and large corporations, not everyday Americans.

Progressives didn’t mince words in criticising the bill.

“We oppose the Senate’s looting of America by big corporations,” the Progressive Change Campaign Committee (PCCC) said in a statement. “Over and over, the American people are told there is ‘no money’—for student debt relief, for Medicare for All, for a Green New Deal, to create millions of jobs and save our planet. And now, at the moment when the American people are most in need, our coffers are being looted by the wealthy and well-connected.”

“COVID-19 emergency spending bill: $250 billion for direct payments to Americans, $250 billion for expanded unemployment benefits, $4 trillion to bail out corporations,” tweeted Judd Legum, author of the Popular Information newsletter. “Seems like the balance is off a bit.”

While Democratic lawmakers touted restrictions on corporate bailout funds that they won in negotiations with the White House—such as a ban on stock buybacks and limits on executive compensation—the version of the bill that was passed includes language that analysts said would allow Mnuchin to simply waive those restrictions at his discretion.

“Jaw-dropping corruption,” Public Citizen said in response to that section of the legislation.

Consumer advocacy group Allied Progress highlighted the waiver language and other striking provisions—such as one that would allow bailed-out companies to axe up to 10% of their workforce—in an analysis of the bill.

In a scathing assessment of the Senate legislation before it passed the chamber Wednesday, HuffPost senior reporter Zach Carter wrote that the bill “represents a transfer of wealth and power to the super rich from the rest of us, with the support of both political parties—a damning statement about the condition of American democracy.”

“The new law would establish a $4.5 trillion corporate bailout fund overseen by Treasury Secretary Steve Mnuchin, with few substantive constraints,” noted Carter. “Bailout money will flow to the shareholders of large corporations, otherwise known as rich people. The oversight terms that Democrats secured are purely cosmetic, replicating the toothless provisions of the 2008 bank bailout that enabled watchdogs to report abuse but not actually prevent or rectify it.”

The final bill would provide a one-time $1,200 means-tested payment to people earning less than $75,000 a year and an additional $500 per child. The government will also provide people who are unemployed with a $600 weekly stipend for up to four months, on top of benefits already provided by states. These payments will go to people who have been laid off or furloughed, and to out-of-work members of the gig economy.

People who don’t have direct deposit information on file with the Internal Revenue service could face significant delays in receiving the $1,200 payment, Democratic aides warned.

Ultimately, critics said the bill’s benefits for people struggling to cope with the massive coronavirus-induced economic fallout are nowhere near sufficient to match the scale of the crisis.

“Giving a one-time $1,200 check to some families and telling them ‘good luck’ is not going to cut it. It’s like handing them a leaky bucket to deal with a flood,” said Kyle Herrig, president of advocacy group Accountable.US. “And what about the millions of struggling borrowers who don’t know how they’ll pay their next private student loan bill or those who fall victim to predatory lenders during these desperate times?”

(Jake Johnson is a staff writer for Common Dreams, a nonprofit, US-based, news website; Nomi Prins is a former Wall Street executive and author.)