After Sen. Mitch McConnell introduced the $2 trillion coronavirus economic rescue package last week, Democrats balked at the bill for a variety of reasons. But the main issue was oversight.
On March 25, just before the updated deal passed into law, Senate Democratic Leader Chuck Schumer highlighted how Democrats “secured tough new requirements on federal grants and loans to any industry,” but then added later in the day that “neither side can be completely happy with the final product.”
That appears to be the case among at least some of his Democratic colleagues.
Sen. Kirsten Gillibrand, a fellow New York Senator, joined Yahoo Finance and expressed some of her concerns about the oversight provisions in particular.
“We have some oversight,” she said. “It’s not everything I would have wanted, but it’s at least the beginning of oversight.”
Other Democrats, like Rep. Alexandria Ocasio Cortez on Gillibrand’s left, have also raised concerns,
Republicans put more strings and means-testing on single parents and struggling mom + pops than they do on multibillion dollar corporations that don’t pay taxes.
— Alexandria Ocasio-Cortez (@AOC) March 26, 2020
A possible focus on executive pay
One area that could get more focus as the money rolls out in the weeks ahead is existing executive pay.
On that front, “there’s not a lot of restrictions on the money,” Gillibrand said. “They could still be paying a CEO $10 million a year and that’s outrageous. So there, I would have preferred some restriction on CEO pay.”
The bill does contain restrictions on increasing CEO pay, Gillibrand supports.
Comparing this bill to TARP, which she opposed, she said, “this smells different, that’s for sure.”
“Sunshine is always a good disinfectant,” said Gillibrand, highlighting the restrictions on dividends and stock buybacks as well as increasing CEO pay.
‘The Secretary may waive the requirement’
One section within the 880-page bill has received some attention. On page 518, it lays out a series of restrictions on stock buybacks, dividends, and limitations on compensation for businesses receiving direct loans from the new $50 billion credit facility established by the bill.
Then, on page 519, it notes that the Treasury Secretary “may waive the requirement under clause (ii) with respect to any program or facility upon a determination that such waiver is necessary to protect the interests of the Federal Government.”
Similar language is present throughout the bill to give flexibility to officials as all this money gets distributed.
Schumer’s argument, made recently on the Senate floor, is about transparency. “If any of these loans look untoward, if any of these loans don’t look right, if any of these loans shouldn’t go to where they’re going, the public, the Congress, will know quickly and that will put pressure on the Treasury Secretary not to do them, and certainly not to repeat them.”
The question is whether that will be enough for Democrats on the left who remain deeply suspicious of the Trump administration’s motives. David Sirota, a senior advisor and speechwriter for Sen. Bernie Sanders, has been particularly vocal online, highlighting this provisions.
Sen. Elizabeth Warren has promised to keep pushing on oversight:
This bill provides immediate, necessary aid—but it’s insufficient. Tomorrow, we keep fighting for more aid for families, hospitals, and small businesses. And I’ll do everything I can to hold the Trump administration accountable for how it spends this $450 billion taxpayer fund.
— Elizabeth Warren (@ewarren) March 26, 2020
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.
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