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Coronavirus sets off industry scramble for aid from Washington

Coronavirus sets off industry scramble for aid from Washington
© Greg Nash

The coronavirus outbreak is prompting a wide range of industries and companies to press Washington for financial relief from the economic fallout.

The calls for aid started with airlines, quickly followed by the tourism and entertainment industry and others who are being hit hard as officials close public events and spaces and urge Americans to stay home. The long list of industries seeking help has exploded to include associations representing restaurants, retailers, manufacturers, alcohol distributors and casinos.

CEOs from major trade groups and representatives for companies like Boeing are now aggressively lobbying Congress for relief checks for often staggering amounts.

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The airline industry, through Airlines for America, is requesting $50 billion in the form of grants, loans and tax relief as the coronavirus pandemic devastates the travel industry. U.S. airlines have taken drastic steps to cut back on flights in recent weeks. Passenger bookings on carriers have taken an extreme hit, and cancellations are rapidly outpacing new bookings.

Boeing is also pleading with Washington for $60 billion for the company and its aerospace suppliers. The company was already in a fragile state before the coronavirus pandemic after the grounding of its 737 Max jets and setbacks to fixing and delivering KC-46 military tankers for the Pentagon. President TrumpDonald John TrumpFox News president, top anchors advised to quarantine after coronavirus exposure: report Six notable moments from Trump and Biden's '60 Minutes' interviews Biden on attacks on mental fitness: Trump thought '9/11 attack was 7/11 attack' MORE vowed this week to aid the defense giant.

Similar to airlines, the tourism industry is also taking a blow. The U.S. Travel Association and the American Hotel and Lodging Association called for $150 billion in assistance this week.

The retail industry, through the National Retail Federation, asked for a direct, government-based loan program as Americans are increasingly staying at home and resorting to online shopping, and the restaurant industry, through National Restaurant Association, is seeking loans to help businesses as cities and states force restaurants to close or limit them to delivery service.

But the political calculus is complicated, with some pushing back on the idea of big-ticket bailouts for companies. Former U.S. Ambassador to the United Nations Nikki HaleyNimrata (Nikki) HaleyGraham says SC people of color can go anywhere in the state but 'need to be conservative, not liberal' 'The soul' versus 'law and order' Author Ryan Girdusky: RNC worked best when highlighting 'regular people' as opposed to 'standard Republicans' MORE this week resigned from the board of Boeing, citing her opposition to bailing out the aircraft maker. GOP lawmakers have also been quick to push back on the idea of bailouts, focusing on giving relief to sectors in the form of loans that will be paid back to the federal government. Democrats, meanwhile, have balked at a $1 trillion stimulus package proposed by Senate Republicans, arguing that it provides too much help for businesses and not enough for American workers.

That opposition and the sheer number of companies and industries dealing with the coronavirus fallout is certain to only intensify the fight for government help, as industries press the government and compete with each other for a slice of the pie.

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Experts predicted the most connected voices — and the biggest industry players — will move to the front of the line.

“You don’t want to build your lobbying relationship when you actually need something, you want to build your lobbying relationship well before you need something,” Mark Fagan, a lecturer in public policy at Harvard Kennedy School, told The Hill.

“Is your particular industry, or your sub-industry or your particular company, really going to get the support you need? ... [For] companies that have built relationships, this might well be a time when the dividends of their investment comes forward.”

With the broad fallout from the outbreak, the has been no limit to the kinds of businesses seeking Washington's aid.

Companies such as ticketing and live events firm Eventbrite are seeking help as concerts, conventions, sports games and other large events have been canceled.

Eventbrite CEO Julia Hartz wrote to lawmakers on Thursday requesting loans and direct payments to the event creators and venues most affected.

The candy industry, through the National Confectioners Association, called for $500 million in federal assistance, and the alcohol beverage producers asked for a stabilization fund of $5 billion.

Other asks have trickled in, including from the casino industry through the American Gaming Association, which predicted casino closures will cost the U.S. economy $21.3 billion in direct consumer spending, and from the franchise industry via the International Franchise Association, which asked for the creation of a $300 billion fund to provide liquidity.

The manufacturing industry has had the biggest ask yet: The National Association of Manufacturers is seeking a $1.4 trillion loan fund. 

Steven Billet, associate professor of legislative affairs at the George Washington University Graduate School of Political Management, said that activity would only spur other groups to also seek help.

“The cynical approach is you never pass up the opportunity to take advantage of a crisis. That’s maybe cynical and realistic at the same time of how these interest groups look at these situations,” he said.

Groups are pressing Congress to move quickly, with Democrats and Republicans still divided over the stimulus package. Senate Democrats on Sunday blocked a massive GOP stimulus bill after talks deadlocked.

The scramble also poses a unique challenge for smaller business

The American Enterprise Institute said $1.2 trillion will be needed to replace the economic impact of revenue loss from private-sector companies with fewer than 500 employees alone — excluding the manufacturing, health, education and financial industries, according to a new report.

Some trade associations have highlighted the impact the economic turmoil will have on smaller members, but many small businesses lack lobbying muscle in Washington and don't hire lobbyists to represent them beyond their associations.

“Typically, those organizations have less opportunity, less resources, to be active lobbyists in D.C. and so for them, the association is clearly the way to aggregate their voice and be heard,” Fagan said.

Billet also noted that focusing on small businesses is a good strategy for lobbyists to appeal to everyday Americans as they seek help from taxpayers.

“That particular approach is very effective because people can look outside their front door and look at all the places that are closing, closed, working on reduced hours,” he said. “There’s enough evidence on the street to suggest that this is probably a pretty good idea.”

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Companies that do not have their own lobbying presence will also need to rely heavily on trade associations.

“I suspect what you’ll see is the companies who have not built relationships with policymakers will come as part of their industry,” Fagan said.

For K Street, the coronavirus is an unprecedented challenge, with lobbyists saying they had never faced a situation of this degree where every sector of the economy was being affected.

The requests for relief from corporations and industry groups are only expected to grow as the virus spreads and as countermeasures such as social distancing, lockdowns and travel restrictions intensify. Goldman Sachs predicted that unemployment insurance claims could hit a record-breaking 2.25 million Americans this week alone.

“Just about every other element of the economy can legitimately walk in and make a case. I think they’re in a much stronger place this time than they were in the Great Recession and certainly during 9/11 because this is an existential threat to the economy since it’s so pervasive,” Billet said. “Anybody can make a pretty legitimate case right now, from the restaurants, to the tourism people, to the airlines.”

Fagan said there would be winners and losers, drawing a parallel with the scramble over the GOP tax bill.

“There were some who gained more than others and I suspect we will see something similar where literally every business is being affected," he said. "How the bailout or the relief gets distributed, I suspect there'll be a correlation between the degree to which organizations have strong relationships and the degree to which the needs are met."