COVID-19 $2.7 Relief Bill Could Create Corporate Slush Fund, Increase Inequality

U.S. Senate leaders have reached a deal with the White House on an unprecedented $2 trillion stimulus package to battle economic freefall caused by the coronavirus pandemic. The Senate deal would send $1,200 checks to most American adults, with another $500 per child. It would create a half-trillion-dollar program to loan money to U.S. corporations and municipal governments, overseen by an inspector general and an oversight board. Another $367 billion would go toward a small business loan program. Hospitals would receive $130 billion, and state and local governments would get $150 billion in assistance.

Progressive critics are calling for grants — not loans — to small businesses and warn that the bailout’s centerpiece, the $500 billion loan program, could become a “slush fund” for corporate America. This is New York Congressmember Alexandria Ocasio-Cortez, speaking on MSNBC. 

Rep. Alexandria Ocasio-Cortez: “If we do not get this right, we risk small businesses across the country shutting down and big businesses experiencing a total pay day with lack of accountability, further consolidating our economy. And that will create a generational issue. If we think income inequality is bad now, we really need to make sure that we get this right to prevent the worst possible outcome.”

An unemployment provision added to the Senate bill by Vermont Senator Bernie Sanders would see laid-off workers receive 100% of their salary up to $75,000 a year, with tipped and gig economy workers covered. Economists at Morgan Stanley and Goldman Sachs estimate the U.S. gross domestic product could plummet by 30% next quarter, driving unemployment to nearly 13%.

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