SUMMARY
Donald Trump was slow to see the economic dangers posed by the Coronavirus pandemic. When he could no longer ignore the crisis, he shifted his focus to helping big corporations and the wealthy, while regular Americans and small businesses continue to suffer the worst impacts.
2019: Roughly A Quarter Of American Workers Did Not Have Paid Sick Leave, Including 49 Percent Of Workers In The Bottom Quartile By Wages, And 69 Percent Of The Bottom Tenth. According to The Pew Research Center, “For working people, though, that’s a lot easier to do if you have access to paid sick leave – which 24% of U.S. civilian workers, or roughly 33.6 million people, do not, according to the federal Bureau of Labor Statistics. (“Civilian workers” refers to private industry workers and state and local government workers combined.) The bureau’s 2019 National Compensation Survey (NCS) found that, for civilian workers, paid sick leave, while nearly universal at the upper ends of the wage distribution, becomes scarcer the less money one makes. For instance, 92% of workers in the top quarter of earnings (meaning hourly wages greater than $32.21) have access to some form of paid sick leave, versus only 51% of workers earning wages in the lowest quarter ($13.80 or less). Among the lowest-earning tenth – those whose wages are $10.80 an hour or less – just 31% have paid sick leave.” [Pew Research Center, 03/12/20]
The Trump Administration Supported A Lawsuit That Could Invalidate The Affordable Care Act In Its Entirety. According to Politico, “A panel of federal appeals judges aggressively questioned whether Obamacare can survive during Tuesday afternoon oral arguments in a case that could upend the 2010 health care law. Two Republican appointees on the three-judge panel frequently interrupted attorneys to question whether the Affordable Care Act’s individual mandate is unconstitutional and if not whether the entire law could stand without it. The ACA’s future appeared murky after two hours of oral arguments at the 5th U.S. Circuit Court of Appeals, but it’s not clear if the judges were ready to uphold a federal judge’s earlier decision invalidating the law. The lawsuit, which is supported by the Trump administration, puts at risk coverage for 20 million people covered by the ACA, as well as the law’s popular protections for insurance protections. The closely watched case is expected to eventually move to the Supreme Court, which has saved the law twice already, and could ultimately decide Obamacare’s fate next year in the height of the 2020 campaign.” [Politico, 7/9/19]
The ACA Required All Individual Marketplace Plans To Cover Treatment For Pre-Existing Conditions And Prohibits Insurers From Rejecting Or Charging More To Applicants With Pre-Existing Conditions. According to Healthcare.gov, “All Marketplace plans must cover treatment for pre-existing medical conditions. - No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started. - Once you’re enrolled, the plan can’t deny you coverage or raise your rates based only on your health. - Medicaid and the Children’s Health Insurance Program (CHIP) also can’t refuse to cover you or charge you more because of your pre-existing condition.” [Healthcare.gov, accessed 7/11/19]
March 2020: Trump’s Agriculture Department Said It Would Appeal A Judge’s Ruling Freezing Its Food Stamp Work Requirements Due To Coronavirus. According to PBS, “The Agriculture Department said Wednesday that it would appeal a judge’s ruling that it would be “arbitrary and capricious” to move forward during a global health crisis with food stamp changes that could force hundreds of thousands from the program. Federal Judge Beryl Howell, in a ruling late last week, stopped a set of changes that would have taken effect on April 1. On Wednesday, an Agriculture Department spokesperson responded to an Associated Press query with a terse email saying only that ‘USDA disagrees with the court’s reasoning and will appeal its decision.' [...] Estimates from the Agriculture Department set the number of people who would be removed from the program at approximately 700,000.” [PBS, 03/18/20]
January 2020: Trump’s Commerce Secretary Wilbur Ross Claimed The SARS-Covid-2 Outbreak Would Benefit The American Economy, “I Think It Will Help To Accelerate The Return Of Jobs To North America. According to the BBC, “US commerce secretary Wilbur Ross has said the deadly coronavirus outbreak in China could be positive for the American economy. During a TV interview Mr Ross said: ‘I think it will help to accelerate the return of jobs to North America.’ The rapid spread of the disease has raised fears about its impact on the Chinese economy and global growth. The comments have come under fire from critics of President Trump's administration. In response to a question on Fox Business News about whether the outbreak is a risk to the US economy Mr Ross said: ‘I don't want to talk about a victory lap over a very unfortunate, very malignant disease.’ ‘The fact is, it does give business yet another thing to consider when they go through their review of their supply chain... So I think it will help to accelerate the return of jobs to North America,’ he went on to say.” [BBC, 01/31/20]
March 2020: In A Back And Forth With A Reporter, Trump Repeatedly Claimed People Staying In The Country Would Benefit The Economy. According to the White House’s Transcript Of Trump’s Remarks at the signing of the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020, Question, “How big a hit to the economy are you expecting?” Trump, “Well, job numbers just came out and they’re incredible. The job numbers were tremendous. And we picked up close to 80,000 new jobs from the last report.And if you add that up, it’s over 350,000 jobs. The job numbers just came out a little while ago, and they were shocking to the people that were analyzing them.” Follow up question, “Do you expect more gyrations in the stock market?” Trump, “No, I think — I think, you know, a lot of people are staying here and they’re going to be doing their business here. They’re going to be traveling here. And they’ll be going to resorts here. And, you know, we have a great place. That’s where — so, foreign people come, but we’re going to have Americans staying home instead of going and spending the money in other countries. And maybe that’s one of the reasons the job numbers are so good. We’ve had a lot of travel inside the USA.” Follow up question, “Do you think Congress or your administration needs to take more action to diminish the risks of recession?” Trump, “Well, all we can do is do what we do.I mean, we’re getting a lot of business from people staying. In other words, they’re — it’s — I’ve always liked anyway; you’ve known that for a long time. But people are staying here and spending their money here, as opposed to going to Europe and other places. Now, that’ll change when this goes away, and hopefully that will be sooner rather than later. But people were — I would say virtually everybody — you saw the job numbers, I guess — people were shocked, because you add another 80 or whatever it is, a lot of — a lot of numbers from last month, where they upgraded. So the job numbers were at a level that nobody thought possible. They were really incredible.” [White House, 03/06/20]
March 2020: As The Number Of Jobs Lost Due To Coronavirus Mounted, The Trump Administration Asked States Not To Report Their Own Unemployment Statistics Until After The Federal Government Had. According to The Wall Street Journal, “The Trump administration asked states to abstain from releasing unemployment-claims figures prior to the publication of a national compilation of weekly U.S. jobless claims, according to a state labor department official. The official cited an email sent on Wednesday from Gay Gilbert, an administrator at the U.S. Labor Department. The message, sent as states across the nation started reporting surges in claims tied to the coronavirus pandemic, said jobless claims are closely watched by policy makers and financial markets during a time of fast-changing economic conditions. The emailed message asked states to keep the numbers embargoed until the national claims figures are released each Thursday, the state official said. The number of Americans applying for first-time unemployment benefits jumped last week in a spike tied to the coronavirus pandemic, increasing by 70,000 to 281,000, the fourth-biggest weekly increase on record going back to 1967. State-level anecdotes suggest jobless claims could hit more than 2 million in next Thursday’s report, an unprecedented level, according to a note from Goldman Sachs.” [Wall Street Journal, 03/19/20]
Almost 300 Publicly Traded Companies Took More Than $1 Billion Meant For Small Businesses. According to the Washington Post, “Publicly traded companies have received more than $1 billion in funds meant for small businesses from the federal government’s economic stimulus package, according to data from securities filings compiled by The Washington Post. Nearly 300 public companies have reported receiving money from the fund, called the Paycheck Protection Program, according to the data compiled by The Post. Recipients include 43 companies with more than 500 workers, the maximum typically allowed by the program. Several other recipients were prosperous enough to pay executives $2 million or more.” [Washington Post, 5/1/20]
Hundreds Of Millions Of Dollars Meant For Small Businesses Went To “Big Companies.” According to The New York Times, “The Los Angeles Lakers are not what most people think of as a small business. Yet the basketball franchise is the latest example of a large company that managed to qualify for small-business loans from a hastily devised government program intended to help barbershops, restaurants, dry cleaners and other mom-and-pop shops. Now, the Treasury Department is frantically trying to figure out how to recoup hundreds of millions of dollars from big companies that applied for loans and received them under the program’s initial terms.” [New York Times, 04/28/20]
Despite The Paycheck Protection Program’s Stated Goal Of Helping Businesses Employing Fewer Than 500 People, It Explicitly Allowed Larger Restaurant Or Hotel Companies To Apply For Loans. According to The Wall Street Journal, “While the new $350 billion Paycheck Protection Program is aimed at businesses with 500 or fewer employees, language in the $2 trillion federal stimulus bill allows big restaurant and hotel chains to participate regardless of how many people they employ.” [Wall Street Journal, 04/06/20]
March 6, 2020: Monty Bennett Gave $50,000 To Trump Victory. [Federal Election Commission, 03/06/20]
October 2019 – March 2020: Bennett Gave The Official Trump Campaign, Trump Victory, And The Republican National Committee $214,500. [Federal Election Commission, accessed 04/23/20]
2016 Election Cycle: Bennett Gave The Official Trump Campaign, Trump Victory, And The Republican National Committee, $262,050. [Federal Election Commission, accessed 04/23/20]
March 16, 2020: Ashford Inc Laid Off Or Furloughed 95 Percent, Or More Than 6,600 Of Its 7,000 Workers, With About One Third Of Them Being Laid Of Permanently. According to CBS News, “ Hotel operator Ashford Inc., which owns or runs more than 130 properties around the country, has laid off or furloughed 95% of 7,000 workers to conserve cash in the wake of the growing novel coronavirus-driven economic swoon. CEO Monty Bennett said the staff reductions started last week, but most of the company's employees were contacted on Monday and told they were either being let go or they wouldn't be receiving paychecks for the time being. Bennett said about one third of the company's salaried staff has been permanently let go.” [CBS News, 03/18/20]
Ashford Inc Suspended Its Debt Service Payments, Citing An Inability To Make “The Numbers Work.” According to CBS News, “‘There is no money to make our debt service,’ Bennett said. ‘We can't make the numbers work. No one can.’” [CBS News, 03/18/20]
March 2020: While Ashford Drew Down $75 Million In Credit, It Could Not Spend It Because It Could Owe It By April 1, 2020. According to CBS News, “Bennett's most pressing problem now is negotiating with lenders. Ashford has cash. The company has drawn down its $75 million bank revolving loan and now has that sitting in its accounts. Bennett is reluctant to spend it, though, because the terms of the revolving loan require Ashford to hit a certain income level. If it doesn't deliver on the income level, it has to pay back the revolver immediately. Now that nearly all of his income has temporarily dried up, he could have to pay back the $75 million in full as soon as April 1.” [CBS News, 03/18/20]
March 20, 2020: Ashford Paid A Dividend To Its Preferred Shareholders Of $0.461 Per Share. [Preferred Stock Channel, accessed 04/23/20]
April 2020: Ashford Received $30 Million In PPP Funding Through 42 Separate Loans, Eight Times More Than The Average Public Company. According to The Wall Street Journal, “Ashford Hospitality Trust, a real-estate investment trust, has been an active participant in the federal government’s Paycheck Protection Program. The company’s subsidiaries have received about $30 million from 42 loans and expect to receive more, according to an April 21 public filing. That amount is the largest of the more than 100 public company disclosures related to these loans reviewed by The Wall Street Journal. The $30 million was about eight times the average amount a public company received, the Journal’s analysis shows.” [Wall Street Journal, 04/22/20]
May 2020: After Public Scrutiny And “Recently Changed Rules And Inconsistent Federal Guidance,” Ashford Announced It Would Return The $76 Million It Had Received In PPP Funding. According to The Washington Post, “Another large recipient of federal aid for small businesses is returning the funds, days before a deadline the Treasury Department set for certain borrowers to pay back the money. The publicly traded Ashford Group, which runs 130 hotels, said it met all requirements to apply for the loans but will return them because ‘recently changed rules and inconsistent federal guidance’ have put the company at risk. Congress and the Trump administration created the $349 billion Paycheck Protection Program to aid small businesses hurt by the coronavirus crisis. The rules didn’t prohibit publicly traded companies from applying, but after some public firms reported receiving loans, Treasury Secretary Steven Mnuchin said they weren’t the intended recipients and advised them to return the funds by May 7. Ashford Group’s companies used more than 100 filings to seek $126 million total and received $76 million, according to a Washington Post review of securities filings. That made it one of the largest known recipients of the funds.” [Washington Post, 05/03/20]
A Trump Donor Received Roughly $27 Million In Coronavirus Stimulus Support For His Private Jet Company. According to NBC Philadelphia, “A private jet company founded by a donor to President Donald Trump received nearly $27 million in government funding under a program run by the Treasury Department, according to government filings. Clay Lacy Aviation, a private jet charter company based in Van Nuys, California, that serves wealthy executives and celebrities, received the government grant as part of the CARES Act, a $2 trillion federal stimulus package aimed at supporting jobs during the coronavirus crisis. The company appears to have received the largest grant of any private jet company on the list. The vast majority of the other 96 recipients of government funding or loans on the list are major commercial airlines, regional carriers or support companies. Other large private jet operators such as NetJets are not on the list. The funding is a grant rather than a loan, and doesn’t need to be repaid to the government. The money is part of the CARES Act program to "compensate aviation industry workers and preserve jobs." […] According to election filings, Lacy gave $2,700 to the Trump campaign in 2016 — the maximum for an individual to give to the campaign — and he gave $47,000 to the Republican National Committee after Trump became the nominee. According to its website, Clay Lacy Aviation manages, maintains and operates a large fleet of private jets for charter. The company said it serves ‘business and world leaders, Fortune 500 companies, government agencies, professional athletes, sports franchises, celebrities and dignitaries.’” [NBC Philadelphia, 5/14/20]
April 2020: The Small Business Administration’s System To Distribute The $350 Billion In Support From The Stimulus Bill Crashed Repeatedly. According to Politico, “Banks on Monday struggled to assist thousands of small businesses vying for $350 billion in government-backed loans as lenders reported that a Small Business Administration system used to process the applications was crashing. The small business aid program — a crucial part of the government's record $2 trillion plan to rescue the economy from the coronavirus pandemic — has been snarled since it was launched Friday in large part because of technical problems with the SBA's ‘E-Tran’ system, which banks must use to authorize the loans. ‘Throughout the course of the day, it's been up and down,’ Independent Community Bankers of America President and CEO Rebeca Romero Rainey said Monday afternoon. ‘That's been the experience since this all went live.’ This week will be the biggest test yet for the so-called Paycheck Protection Program, which Congress created to get money as quickly as possible to small businesses to stave off mass firings as the economy shuts down. A key feature of the plan is that the government will forgive the loans if businesses maintain their payrolls. The Trump administration pressed banks to launch the program Friday to rocky results after waiting until the night before the rollout to issue guidelines to the industry. Even after working through the weekend to shore up their systems and work on loan applications, lenders on Monday continued to report significant problems standing in the way of the small business rescue.” [Politico, 04/06/20]
Without Sufficient Lead Time And Guidance, Banks Found It Much Easier To Loan To Businesses They Already Had A Relationship With. According to Politico, “The effort appeared to be in real jeopardy earlier this week as banks warned that they didn't have the necessary guidance from the administration to start the program and begin issuing waves of loans. A day before the launch, lenders were still unsure about how cumbersome the applicant verification process would be and what legal protections they would have if they mistakenly issued loans to fraudulent borrowers. On Thursday night, the Small Business Administration and Treasury Department released new guidelines that appear to have put many lenders at ease, in large part because of streamlined loan-processing requirements. But for many banks it was too late to launch the program Friday morning, the deadline set by Mnuchin that many lenders called unrealistic. And while the new guidelines offered relaxed loan-verification rules, they were still structured in such a way that banks would have the easiest time offering loans to existing borrowing customers that had previously been vetted.” [Politico, 04/03/20]
April 2020: Community Bankers Warned The Trump Administration That Shortcoming With The Small Business Administration’s Loan System Could Preclude Their Clients From Getting Access To The Loans. According to Politico Pro, “The Independent Community Bankers of America is urging the Trump administration to take immediate action to address problems plaguing the launch of the $350 billion small business lending program that got off to a rocky start Friday, with the lenders worried that their customers may miss out on the aid. In a letter Saturday night to the Treasury Department and Small Business Administration, Rebeca Romero Rainey, president and CEO of the association of small lenders, said banks were experiencing "massive delays and inability to process loans" via critical SBA systems as they tried to handle applications for the ‘Paycheck Protection Program.’ Community banks were frustrated, she said, ‘with failed technology links and portals.’ ‘We recognize that these systems were not created to handle the volume of applications they are seeing today, but we must work with the systems we have,’ she said. ‘Without a more robust intake process, American small businesses in many parts of the country will not receive and deploy the funds intended for them.’ With community banks facing ‘a myriad of unanswered questions and lack of clear instruction on how to complete loans through the SBA,’ she said small lenders were growing concerned that the $350 billion will be depleted rapidly as large banks come online. Romero Rainey said the administration should make an immediate request to Congress for additional funding. For now, she said, at least 25 percent of existing funds should be allocated for banks with $50 billion in assets or less. ‘Community banks serve markets not served by the large banks,’ she said. ‘To ensure program access to all communities and regions of the nation, we must not allow program funds to be used nearly exclusively by the largest banks.’ Romero Rainey called on Treasury and the Federal Reserve to launch a secondary market facility to purchase the loans from banks to ensure they have the necessary capacity on their balance sheets during the pandemic.” [Politico Pro, 04/05/20]
Many High School And College Students, As Well As Disabled And Elderly Adult Dependents May Be Left Out Of The $2 Trillion COVID-19 Stimulus Bill. According to The Wall Street Journal, “The government is preparing to send one-time payments to most Americans to help them cope with the coronavirus outbreak, but that is little comfort for many college students and adult dependents who are left out. The economic-relief law signed by President Trump on Friday provides $1,200 to most adults and $500 for children under age 17. That money—$292 billion—will start flowing within weeks from the Internal Revenue Service into bank accounts. People with little or no income can qualify, which means money will flow to retired people and people who don’t normally file tax returns. The benefit phases out for individuals with income above $75,000 and married couples with income above $150,000. However, the plan excludes anyone who isn’t a child and who can be claimed as someone else’s dependent. Who is in that group? Some high-school students, college students and some disabled and elderly people, many of whom show up on the tax returns of the people they live with who provide most of their support.” [Wall Street Journal, 03/28/20]
Trump’s Labor Department Faced Criticism For Limiting Access To Unemployment Benefits And Making It Easier For Employers To Not Pay For Family Leave Benefits. According to The Washington Post, “The Labor Department is facing growing criticism over its response to the coronavirus pandemic as the agency plays a central role in ensuring that the tens of millions of workers affected by the crisis get assistance. The criticism ranges from direct actions that the agency has taken to limit the scope of worker assistance programs to concerns that it has not been aggressive enough about protecting workers from health risks or supporting states scrambling to deliver billions in new aid. In recent days, Labor Secretary Eugene Scalia, who has expressed concerns about unemployment insurance being too generous, has used his department’s authority over new laws enacted by Congress to limit who qualifies for joblessness assistance and to make it easier for small businesses not to pay family leave benefits. The new rules make it more difficult for gig workers such as Uber and Lyft drivers to get benefits, while making it easier for some companies to avoid paying their workers coronavirus-related sick and family leave.” [Washington Post, 04/10/20]
Trump’s Treasury Department Allowed Banks To Divert Stimulus Payments To Private Debt Collectors. According to The American Prospect, “Banks would be first in line to grab the payments to offset a delinquent loan or past-due fees. Even if the individual thinks their account with that bank is closed, if the payments post there, the bank could conceivably use them to cover old debts. The Treasury Department effectively blessed this activity on a webinar with banking officials last week. In audio obtained by the Prospect, Ronda Kent, chief disbursing officer with Treasury’s Bureau of the Fiscal Service, can be heard explaining that banks had posed questions to her about ‘whether these payments could be subject to collection from the bank to which the money is deposited, if the payee owes an outstanding loan or other payments to the bank.’ She responded—twice—that ‘there’s nothing in the law that precludes that action,’ while counseling that the banks’ compliance officers should consult with their legal offices about what policies their banks will implement. ‘You will want to know for your bank what your bank has decided to do,’ Kent said.” [American Prospect, 04/14/20]