Trump says government could take equity in bailed-out companies
President Trump said Thursday that he supports the federal government taking an ownership stake in corporations seeking financial support as they struggle to stay afloat during the coronavirus pandemic.
“I do. I really do,” Trump said during a Thursday press conference when asked if he would support taking equity as a condition for federal economic rescue funds.
The president also implied that corporations that invested in new workers and facilities could avoid having to surrender equity to the government, while companies that used tax savings to purchase their own stock may be viewed less favorably.
“People are coming in for money. In some cases, no fault of their own, but in some cases where they did certain things over the course of the years including by buying back stock,” Trump said. “They bought back stock and they paid a high price for it as it turned out. But maybe I view that as a little bit differently than somebody that didn’t, than somebody that built plants all over the United States, of which there were plenty of them, too.”
Trump in 2017 signed a tax-cut law that slashed the corporate income tax rate from 35 percent to 21 percent.
The administration intended for companies to use the savings to expand their workforce and invest in productivity-boosting equipment and facilities. But many corporations instead used the money to buy back stock, boosting their share prices, while business investment declined steadily throughout 2019.
Trump’s comments come as the administration and lawmakers negotiate over a $1 trillion stimulus package to protect the economy from the toll of the coronavirus pandemic.
Restaurants, bars, entertainment venues, retailers and other businesses across the U.S. have closed for weeks, if not months, as public health officials urge Americans to avoid gatherings of more than 10 people and stay at least 6 feet away from each other.
While Democrats and Republicans alike have committed to supporting industries facing financial peril, each group has raised concerns about the implications of bailing out or supporting certain industries and companies — particularly Boeing.
The U.S. aircraft maker was already facing deep financial and legal trouble after it was forced to halt production of the 737 Max airliner after two fatal crashes. But analysts say that allowing Boeing to go bankrupt could seriously damage the U.S. economy amid an unprecedented shutdown.
Trump said Thursday that the airline, cruise and hotel industries will likely receive federal support to stop further layoffs from weakening the economy.
“You don’t want to lose industries like this. These are incredible industries, you can’t lose them,” Trump said.