Lobbyists are burning up the phone lines in Washington, D.C. as businesses from every sector rush to get their piece of the $2 trillion relief package, which includes $350 billion in forgivable loans. From private equity firms to venture capital, retail to hospitality, casinos, airlines and more, the coronavirus pandemic has unleashed a feeding frenzy.
“Companies don’t have an endless supply of cash, and many have thousands of employees,” Marc Lampkin of the lobbying firm Brownstein, Hyatt, Farber Schreck told the Financial Times (FT) in a Sunday (April 12) report. “That creates a sense of urgency. [They say] ‘we need help from our government and we need to understand how these programs work so we don’t have a cataclysmic interruption’”.
Lampkin’s recent clients have included Casino Wynn Resorts, the private equity firm Colony Capital, and the trade association National Retail Federation, FT indicated, citing lobbying registration forms. The COVID-19 relief package has been the focus of requests.
The airlines were awarded $50 billion — split evenly between loans and grants — but carriers fear that’s not enough.
“Carriers remain hopeful that the Treasury department will move swiftly, with as few restrictions as possible, to ensure airlines are able to utilize these funds to meet payrolls and protect the industry’s 750,000 jobs,” a spokesperson for the industry group Airlines For America said.
Revenues in the travel and hospitality sectors are anticipated to decline 78 percent, according to FT, citing Oxford Economics. Although losses this year could top $400 billion, the industry — including casinos and cruise lines — was not given special relief funds.
“From an economic standpoint this is seven times worse than 9/11, which took two years to recover from,” said Tori Emerson Barnes, executive vice president of public affairs and policy at the U.S. Travel Association. “If the public health crisis goes on for a fair amount of time longer, I just don't see that there is enough money there.”
Physical retail was falling into financial ruins due to eCommerce long before the coronavirus took hold. But the pandemic has driven even more people online to get basic necessities.
Retail lobby groups have been working towards wider access to the Federal Reserve’s liquidity facilities. They are also asking that the federal government develop a nationally consistent measure as far as what constitutes a non-essential business.
“That’s one of the things that retailers are grappling with: how it’s defined by each state, how it’s interpreted and enforced,” said Ed Pagano, a partner and lobbyist at Akin Gump. “One hope is the administration would eventually issue guidelines.”
Shale firms — along with U.S. oil and gas producers — have said that they have lost substantial income due to the pandemic but so far have not been able to benefit from the relief package.
Democrats blocked a $3 billion replenishment of the petroleum reserve, and Republicans are concerned fossil fuel producers will be left out of relief.
“Some outside groups have already advocated certain sectors of the economy be excluded from the loans made available under the Cares Act,” Republican senators said in a letter to the Fed and Treasury this week. “Acquiescing to these demands would be contrary to Congressional intent and would arbitrarily harm certain American workers.”
As nonessential retail continues to struggle, the federal funding picture remains cloudy. Companies that could apply for loans or relief from recent provisions in the COVID-19 relief package are awaiting final guidelines.