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Zirpoli: Limit bailouts to those in need

With Congress thinking about ways to help Americans deal with the financial emergency many are now facing due to the coronavirus and the disease it causes, COVID-19, let’s not make the same mistakes we made in 2008 and 2017 when we gave big tax cuts and loans to businesses and, instead of investing in their employees, they invested in their executives and stockholders.

It has been well-documented that the 2017 tax cut was used by major U.S. corporations to buy back $1.1 trillion of their own stock. Not much, if any, was passed on to their employees.

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Sen. Chris Murphy of Connecticut stated last week, “There is no straight-face justification to give no-strings-attached cash to an industry that had the chance to use massive profits and tax cuts to build a rainy day fund, but instead used the money to pad investors returns and executive pay.

The airline industry, for example, has made tens of billions of dollars in profits over the last 18 years. They should use this money to pay employees who help them make these profits. They should not need American taxpayer money for a bailout. Yet, the Trump administration has proposed giving them billions of dollars in loans and other handouts.

During the Great Recession of 2008, insurance companies gave their executives millions of dollars in bonuses using bailout money from the federal government. This can’t happen again. Any bailout money needs to go to employees of companies that are not able to operate. Our federal tax dollars should focus on employees, most of them paid hourly, who will be put out of work when businesses close.

Sen. Elizabeth Warren of Massachusetts put a list of eight contingencies for companies receiving federal aid. This includes keeping people on their payrolls and banning companies from using any of the money to enhance their own company stocks to enrich executives.

Many of these companies who will receive bailouts and loans pay their executives tens of millions of dollars. If we are going to bail them out or give them low-interest loans, their executives should not receive raises anytime soon and, in fact, be asked to contribute to staff payouts.

Warren stated, “Funds must come with strings attached to ensure that the money goes to maintain payroll, not to enrich shareholders or pay executive bonus.” I think most Americans, regardless of political affiliation would agree with these simple requirements.

Here in Maryland, many nonprofits who take care of people with disabilities and who can’t close their doors and send everyone home, are wondering who will take care of them. 

While some of these agencies can close some programs, residential programs must remain open. They can’t just send their clients home; the residential program is their home. And they need staff to work in these homes, regardless of the clients’ health status, with or without COVID-19.

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As stated by Don Rowe of the Arc of Carroll County, “In every state, there are hundreds of agencies that provide services to people with disabilities, to people who have mental health needs, and to those who serve the poor. All of these organizations share one thing in common, they employ people who are caring, dedicated, and who work for low wages.”

If any of these agencies need to close some of their programs for a month or two, they need to know that they will be financially taken care of until they can return to work because these agencies, already short-staffed prior to the virus breakout, will need every one of them back.

Unless our nation focuses on financial relief to workers, not executives, our economy will continue to fail, and the gap between the rich and poor will continue to grow.

We need to target financial assistance to those who did not benefit from the tax cuts of 2017, but to the hourly workers who keep our nation’s grocery stores open so that we can buy food, nurses and other hospital and health care providers who are taking care of our sick, direct care workers who keep our disability agencies operating, bank tellers who continue to serve us, and the other essential workers in America who we depend on today.

Rich people got a lot richer from the 2017 tax cuts. Most Americans did not. Let’s focus our federal assistance on the people who really need our help, not those who will merely enrich themselves with more bailouts and tax cuts.

Tom Zirpoli is the program director of the Human Services Management graduate program at McDaniel College. He writes from Westminster and his columns appear on Wednesdays. Email him at tzirpoli@mcdaniel.edu.

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