The coronavirus rescue bill includes $450 billion in loans and loan guarantees for any and all businesses suffering from the coronavirus and the accompanying shutdowns. This is right and just because it could reduce the number of unemployed people and provide some restitution to businesses harmed by government-imposed shutdowns of commerce.
The bill also earmarks $25 billion in loans and loan guarantees for “passenger air carriers.” Airlines have been incredibly harmed by this unpredictable event, and their operations disrupted by government restrictions on travel. So government aid to make up for this is sensible.
The bill also provides $4 billion in loans and loan guarantees for cargo air carriers.
Boeing, the aircraft giant, will benefit from all three of these government aid programs. Boeing is as eligible as a mom and pop or any other business to get federal financing to help them meet payroll. Their thousands of small suppliers are also eligible for this aid.
Boeing benefits from the $25 billion because that money goes to their customers, such as Delta Air Lines, American Airlines, and United Airlines. Helping Boeing’s customers, in turn, helps Boeing.
Boeing benefits from the $4 billion because that money goes to their customers who buy their freighters.
But of course, Boeing has troubles that predate the coronavirus. Namely, Boeing made airplanes that crashed.
In response, Congress included in this massive coronavirus bill a special $17 billion bailout for Boeing — on top of all those other lines of credit. Sec. 4003, (b)(3) provides up to $17 billion in “loans and loan guarantees for businesses critical to maintaining national security.”
This is widely understood to be a thinly veiled handout to Boeing, the No. 2 defense contractor in the United States, pulling in $34 billion in Pentagon contracts.
Boeing doesn’t need the bailout, and our government shouldn’t give Boeing one. Let them have the same access to emergency aid that any other business has. They would get among the largest awards in the country because Boeing is among the largest companies.
But don’t give Boeing its own special line of taxpayer cash.
Whenever lobbyists and lawmakers defend Boeing subsidies, such as the Export-Import Bank, folks point to the thousands of vendors who supply Boeing with parts. All of those companies will have access to the nearly $500 billion for businesses. We don’t need to feed the horse to feed the birds here.
But doesn’t Boeing need extra financing just to stay alive these days? Sure. But they can get it from the private sector. How do we know? Because Boeing’s CEO has said he could!
Some nationalists and some socialists have argued that if the U.S. government bails out Boeing, the government should take an ownership stake in the company. Boeing honcho David Calhoun objected.
“I want them to support the credit markets, provide liquidity,” Calhoun explained on Fox Business. “Allow us to borrow against our future, which we all believe in very strongly, and I think our creditors will too. It’s really that simple.”
“If you attach too many things to it, of course you take a different course,” Calhoun continued, warning Washington that Boeing would only take a bailout on its own terms.
What if Congress or the administration insists on taking a stake in Boeing in exchange for the bailout? “If they force it,” Calhoun warned, “we just look at all the options — and we’ve got plenty of them.”
A taxpayer bailout is supposed to be a last resort, but Boeing has just made it clear that it’s not. Instead, Boeing’s executives simply find Uncle Sam often provides favorable terms.
This is the story of Boeing’s relationship with the federal government: The government is the preferred financier, but the private sector is always available as a perfectly fine backup.
Consider the Export-Import Bank. Ex-Im is a federal agency that subsidizes U.S. exports by extending taxpayer-backed financing to foreign buyers. It’s nicknamed “Boeing’s Bank,” because about 40% of all its financing subsidizes Boeing exports.
From mid-2015 until mid-2019, though, Ex-Im was barred by various congressional obstacles from financing Boeing jets. In that time, Boeing assembled a historic and award-winning consortium of lenders and insurers who happily and profitably financed Boeing’s exports, innovating along the way.
Yet Boeing kept lobbying the whole time to restore its taxpayer-backed financing.
Most of this coronavirus bill is helping people harmed by the coronavirus or the effort to fight the coronavirus. It is not a stimulus package.
Yes, Boeing should have the same access to coronavirus funds as everyone else. But once you start picking special winners who also get their own dedicated line of aid to make up for Boeing’s own wrongdoing, then you’re not reacting to a tragedy — you’re exploiting one.
