Business Groups to Press Trump for Virus Response to Curb Damage
The travel, energy, manufacturing and consumer product industries are pressing the Trump administration and Congress to take decisive action to contain the economic damage from the coronavirus and plunging oil prices.
Business lobbies are pushing a range of proposals such as extending unemployment insurance, broadening business entertainment tax breaks and offering tax credits to employers of quarantined workers, according to representatives interviewed by Bloomberg News. Many of the ideas are in a preliminary state as President Donald Trump’s advisers weigh their options.
“Right now we’re in the spaghetti-on-the-wall phase of this conversation,” said David French, senior vice president of government relations at the National Retail Federation, the industry’s largest trade association.
Investors and the public are looking to the Trump administration for a more decisive response to the virus outbreak and to a sharp drop in oil prices touched off by a breakdown in talks between Russia and Saudi Arabia aimed at cutting output. U.S. stocks plunged more than 7.5% on Monday in the worst day on Wall Street since the financial crisis, crude sank 20% and credit markets showed signs of intense strain.
Trump said at a press conference Monday evening that he would seek “very substantial relief” for the economy, including discussing with Congress a payroll tax and help for hourly wage earners.
But the president’s economic package would leave out, for now, any aid for the travel industry, people familiar with the matter said Monday night.
The White House is hosting a parade of industry executives this week. On Monday, the National Retail Federation, the International Franchise Association, and the American Hotel and Lodging Association, among others, met with White House officials, according to people familiar with the gathering.
“What we’re looking at are things that are going to help employees, and things that are going to help businesses,” said Jennifer Myers, a spokeswoman for the American Hotel and Lodging Association. The group is pushing for expanded unemployment insurance to help blunt the impact of a potential long-term downturn that would lead to layoffs.
The National Association of Manufacturers issued a policy action plan with more than 30 recommendations, including tax credits for employers and credit leniency for small- and medium-size businesses.
“Neither government nor industry can solve this challenge alone,” said President and Chief Executive Officer Jay Timmons in a statement.
The U.S. Chamber of Commerce, one of Washington’s most powerful lobbying presences, and the Business Roundtable, which counts top chief executives as members, have set up task forces to respond to the coronavirus crisis.
The chamber is exploring whether those who can’t work because of the virus should benefit from unemployment insurance, according to Neil Bradley, the group’s chief policy officer. He said the plan could allow companies to respond “more nimbly” than by offering paid sick leave because it’s a policy already in use, a view shared by the NRF.
But Democratic leaders in Congress have said they want to see paid sick leave and warned that any package should give priority to workers’ needs over corporate interests. They have also called for enhanced unemployment insurance.
Pence to Meet Insurers
Vice President Mike Pence is scheduled to meet with top executives of some of the largest insurance companies on Tuesday, according to two people familiar with the matter. Invitations have been extended to UnitedHealth Group Inc., Anthem Inc., Blue Cross Blue Shield Association, Aetna Inc., Humana Inc. and America’s Health Insurance Plans, a trade group for health insurers, according to one of the people.
White House task force member Debbie Birx also will be at the meeting.
Pence has also met with executives from the cruise, airline and consumer product industries within the past week.
House Democrats have announced a hearing on legislation that would require some employers to provide paid sick leave. The Senate Finance Committee said Monday that Republican Chairman Chuck Grassley of Iowa was “exploring the possibility of targeted tax relief measures” to respond to the virus.
Oil and Energy
Oil industry leaders and lobbyists are rushing to develop policy plans for dealing with a double whammy from the coronavirus -- which has spurred the first contraction in oil demand since 2009 -- and a crash in crude prices touched off by a breakdown in talks between OPEC and Russia over cutting output.
So far, oil companies and trade groups haven’t coalesced around ideas or sent a lot of them to the White House for consideration, said two industry lobbyists who asked for anonymity discussing internal deliberations. Industry officials are still trying to figure out what levers can be pulled, including possible lending help, one of the people said.
It may be difficult to persuade the administration to single out the oil industry for aid in any targeted relief package, given that the president sees lower oil prices as a benefit for consumers.
Trump highlighted his view of the price drop as a boon for motorists on Monday. “Good for the consumer,” he said on Twitter. “Gasoline prices coming down!”
The administration could seek to delay a planned selloff of crude from the U.S. emergency stockpile -- dictated by Congress before the current price rout. But otherwise, “it’s not likely he will intervene,” said Rapidan Energy Group’s Leslie Hayward.
The oil industry could benefit from broader relief efforts, pointed out Jim Lucier, of Capital Alpha Partners. “The same sorts of policies that are being considered for aviation may also apply to the oil industry,” he said, such as delays to tax deadlines.
Independent oil producers that are heavily invested in shale without the balance sheets to weather a long-term price dip could benefit the most from any government initiative.
Although the industry has a broad list of standing requests for the administration and Congress -- including tariff relief, faster permitting times and more options to drill offshore -- those changes wouldn’t yield an immediate cash infusion or provide instant help.
Bradley, the chief policy officer of the Chamber of Commerce, also talked about the possibility of unlocking lending authority for bigger businesses, similar to loans to small businesses that were authorized by Congress in supplemental funding last week.
Travel and Hospitality
The travel industry, which represents sales of about $1.1 trillion annually, has discussed requesting a bigger tax deduction for business entertainment, which was curtailed in Trump’s tax cuts, according to Tori Barnes, executive vice president of public affairs and policy at the U.S. Travel Association, which represents transportation, local attraction sites, tourism bureaus and other parts of the industry.
The industry, which is facing escalating conference cancellations and company travel curbs, has also looked at delaying payroll tax deductions and grants to states and municipalities to support tourism, Barnes said.
The Consumer Brands Association is focused on how to ensure products get to consumers if items like face masks, toilet paper, cleaning supplies, canned food and hand sanitizer disappear from store shelves with the spread of the coronavirus.
If access to certain ingredients imported from other countries is restricted, it could have a domino effect that affects the availability for consumers. Procter & Gamble Co. alone has nearly 400 suppliers in China that ship thousands of ingredients that end up in 17,600 different products, according to Jon Moeller, a top executive at the company.
“We can’t play catch-up when disaster strikes,” said Bryan Zumwalt, executive vice president of public affairs for Consumer Brands, whose members include 3M Co., Clorox Co., Procter & Gamble, and Hormel Foods Corp. “The government must be proactive in its supply chain policy.”
The group and some of its members met with Pence at the White House last week and wrote to Attorney General William Barr urging the Justice Department work with federal, state and industry officials to crack down on price gouging on these products.
Barr said Monday that the department “stands ready to make sure that bad actors do not take advantage of emergency response efforts, health-care providers, or the American people during this crucial time.”
©2020 Bloomberg L.P.