A stimulus package introduced by Senate Republicans last Thursday to help soften the blow from the burgeoning coronavirus pandemic includes loans and loan guarantees that would benefit the aerospace manufacturing sector and wall as other businesses.
The proposed Coronavirus Aid, Relief, and Economic Security Act contains $208 billion in loans and loan guarantees, including $50 billion for airlines, $8 billion for air cargo carriers, and $150 billion for other eligible businesses, which would cover aerospace manufacturers and other entities in need.
The $150 billion provision is in line with a plea from Boeing [BA] last Tuesday seeking at least $60 billion in access to loans from the public and private markets for aerospace manufacturers, and the company itself.
“Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain,” Boeing said on March 17 as the COVID-19 pandemic was roiling global air carriers suffering from a cliff dive in passenger demand. “The long term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole.”
The Aerospace Industries Association and the American Institute of Aeronautics and Astronautics last week also called for government help in supporting the aerospace and defense industries.
Under the Senate Republican’s proposals, the loans and loan guarantees that would be provided by the Treasury Department must be to U.S. entities that have incurred losses due to impacts from COVID-19 so they can continue operating. The bill would also prohibit the department from making grants and direct cash payments to these entities.
Boeing’s support for the government to provide the aerospace manufacturing sector with liquidity during the crisis prompted one of its directors, former South Carolina Gov. Nikki Haley (R), to resign from the board last week, saying she can’t support the company’s request “for a stimulus or a bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position.”
The Senate Republican’s stimulus package will need support of Democrats for passage as well as the Democratic controlled House. Senate Majority Leader Mitch McConnell (R-Ky.) directed bipartisan negotiators in the Senate to reach a deal last Friday night on a final bill with plans for a vote on Monday.
The new package follows two related bills already signed into law, one an $8.3 billion appropriation to help several federal departments respond to the coronavirus pandemic and the second providing paid sick leave, free coronavirus testing, expanded food assistance and unemployment benefits, and protections for health care workers.