The Coronavirus Outbreak

By Alan Rappeport

Senator Chuck Schumer and Speaker Nancy Pelosi are urging Treasury Secretary Steven Mnuchin not to deter companies from taking aid with aggressive negotiations.

Senator Chuck Schumer of New York, the Democratic leader, and Speaker Nancy Pelosi warned that it would not be in the public interest if the airlines chose to declare bankruptcy.
Senator Chuck Schumer of New York, the Democratic leader, and Speaker Nancy Pelosi warned that it would not be in the public interest if the airlines chose to declare bankruptcy.Credit...Erin Schaff/The New York Times
Alan Rappeport

WASHINGTON — Top Democratic lawmakers have urged Treasury Secretary Steven Mnuchin to quickly provide American airlines with direct payroll assistance and to avoid insisting on overly restrictive terms that could deter companies from taking the money.

Major airlines began submitting their applications for government support to the Treasury Department on Friday but there is growing concern within the industry that Mr. Mnuchin will demand strict terms to ensure that taxpayers are compensated, such as large equity stakes in the companies. Some of the airlines, which have seen demand plummet as the coronavirus pandemic has stalled global travel, are wary of giving the government too much control over their businesses and accepting strict conditions tied to the aid.

Democrats fear that if Mr. Mnuchin drives too hard of a bargain, airlines will balk and lay off more workers. In a letter to Mr. Mnuchin that was dated April 3 and sent on Sunday, Senator Chuck Schumer of New York, the Democratic leader, and Speaker Nancy Pelosi warned that it would not be in the public interest if the airlines chose to declare bankruptcy.

“Assistance must not come with unreasonable conditions that would force an employer to choose bankruptcy instead of providing payroll grants to its workers,” they wrote in the letter, which was reviewed by The New York Times on Sunday.

The lawmakers said that they recognized the Treasury Department’s need to protect taxpayer money being used to bail out industries and to seek warrants — options to buy stock in a company — in exchange for government assistance. But they said that the administration must ensure that the companies commit to protecting workers, which was the intent of the law signed by President Trump. The letter was co-signed by Senator Sherrod Brown of Ohio, the top Democrat on the banking committee, and Representative Peter A. DeFazio of Oregon, the Democratic chairman of the House Transportation and Infrastructure Committee.

“We urge you to quickly and fairly enter into direct payroll assistance agreements with each of the carriers and contractors provided for in the law,” they said.

The $2 trillion economic stabilization package that Congress passed last month earmarked $25 billion in grants and another $25 billion in loans for the industry. Airlines are expected to maintain their staffing levels through the end of September if they accept the money.

Last week, the Treasury Department laid out the application process for airlines and asked them to propose how they would compensate the government for aid. Mr. Mnuchin is working with investment banks to help negotiate the terms and said last Thursday that he had selected PJT Partners to work with the airlines and Moelis & Company to focus on cargo carriers.

The department has been under pressure to ensure that taxpayer money is protected and that the government does not just hand a blank check to companies, especially those that have spent several years using their cash to engage in stock buybacks, which reward shareholders. Major airlines spent $19 billion repurchasing their own shares over the last three years.

Mr. Mnuchin has insisted that companies will not be forced to hand over their stock, but that taxpayers must be compensated for offering relief.

“There is a specific line in the bill that says that the secretary, meaning me, will determine proper compensation,” Mr. Mnuchin said at a White House briefing last week. “Once we get our advice from our financial advisers, we get the applications from the airlines, I’ll be working very closely with the president, and we’ll make sure that we strike the right balance.”

The department had no immediate comment on the letter from lawmakers.

Airline executives have been hesitant to say whether they will let the government take stakes in their companies. Unions that represent flight attendants at several major airlines urged Mr. Mnuchin not to exercise his power to take stock in the airlines last week. They said it would deter executives from taking aid, leading to more job cuts.

“The public gets a huge return on investment in this deal,” said Sara Nelson, the president of the Association of Flight Attendants union. “It keeps two million hourly workers employed, paying taxes and able to spend, and it ensures that aviation is ready to fly again and restart our economy the moment we have the virus under control.”

  • Updated April 4, 2020

    • The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

    • If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

    • It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can be carried on tiny respiratory droplets that fall as they are coughed or sneezed out. It may also be transmitted when we touch a contaminated surface and then touch our face.

    • Unlike the flu, there is no known treatment or vaccine, and little is known about this particular virus so far. It seems to be more lethal than the flu, but the numbers are still uncertain. And it hits the elderly and those with underlying conditions — not just those with respiratory diseases — particularly hard.

    • If the family member doesn’t need hospitalization and can be cared for at home, you should help him or her with basic needs and monitor the symptoms, while also keeping as much distance as possible, according to guidelines issued by the C.D.C. If there’s space, the sick family member should stay in a separate room and use a separate bathroom. If masks are available, both the sick person and the caregiver should wear them when the caregiver enters the room. Make sure not to share any dishes or other household items and to regularly clean surfaces like counters, doorknobs, toilets and tables. Don’t forget to wash your hands frequently.

    • Plan two weeks of meals if possible. But people should not hoard food or supplies. Despite the empty shelves, the supply chain remains strong. And remember to wipe the handle of the grocery cart with a disinfecting wipe and wash your hands as soon as you get home.

    • That’s not a good idea. Even if you’re retired, having a balanced portfolio of stocks and bonds so that your money keeps up with inflation, or even grows, makes sense. But retirees may want to think about having enough cash set aside for a year’s worth of living expenses and big payments needed over the next five years.