Treasury Secretary Steven MnuchinSteven MnuchinConservatives are outraged that Sarah Bloom Raskin actually believes in capitalism Suspect in Khashoggi murder arrested The Hill's Morning Report - Presented by Facebook - Biden to tackle omicron risks with new travel rules MORE signaled on Thursday that the federal government could take stakes in airlines in exchange for the billions of dollars that have been set aside for the beleaguered industry in Congress's $2 trillion coronavirus stimulus package.
Per the version of the bill that passed the Senate late Wednesday night, passenger airlines would receive $25 billion in loans and guarantees, while another $25 billion would come in the form of direct grants. The bill, however, gives Mnuchin the oversight on how these grants are disbursed, and if some sort of compensation is required in return.
Last week, Mnuchin said that the final aid package could include an option for the government to gain equity in the companies that receive direct grants, though he wasn't specific on the form, The Wall Street Journal reports.
Under the bill, one of the possible forms is a warrant, which gives the buyer, in this case the federal government, the option to buy shares of stock at a certain price.
"The Secretary may receive warrants, options, preferred stock, debt securities, notes, or other financial instruments issued by recipients of financial assistance," section 4117 of the bill reads.
A source familiar with the mechanics of the bill told The Hill that while compensation for the grants would most likely be required, it wouldn't necessarily have to be an equity stake.
Mnuchin has repeatedly said the assistance given to the companies such as airlines isn't a bailout and that the massive stimulus package protects taxpayers.
"First of all, both the Republicans and Democrats supported full transparency in what we're doing," Mnuchin told CNBC's Jim Cramer on Thursday.
"So when we do take actions, either through our direct program or throughout programs with the Fed, there will be disclosures to the American public much faster than they would normally occur," he said.
Airlines have been hit particularly hard by the pandemic, with many forced to drastically slash their flights due to travel restrictions and lack of demand.
Earlier this month, Delta Air Lines announced it was temporarily grounding 300 of its planes, more than half of its fleet. In an internal memo to employees, company CEO Ed Bastian said the move was "the largest capacity reduction in Delta’s history" including after the Sept. 11, 2001, attacks.