What are the objections to Mitch McConnell's COVID-19 Bill?

Question

In the US Senate on Sunday, March 22nd, Democrats blocked the Coronavirus Aid, Relief, and Economic Security (CARES) Act in a 47-47 vote that was split along party lines. McConnell indicated that he would try to pass the bill again on Monday, ostensibly so that Senators could see how markets would react to the lack of financial measures so far:

We're going to vote at 9:45 in the morning (1345 GMT) ... 15 minutes after the markets open and see whether there's a change of heart,

This timing was not agreed to, with the debate continuing later in the day than planned, seemingly with no further bilateral progress made.

The first article also notes that Democrats "decried the Republican proposal as prioritising the needs of Wall Street and corporate America over those of average people.", and would "benefit corporate interests at the expense of hospitals, healthcare workers, cities and states". Senator Elizabeth Warren, until recently a 2020 presidential candidate, told reporters that "We're not here to create a slush fund for Donald Trump and his family, or a slush fund for the Treasury Department to be able to hand out to their friends".

The summary of the bill, however, states that it provides funding for small businesses and individuals, which would seem to benefit the average person, and includes a raft of healthcare provisions, including "additional funding for the prevention, diagnosis, and treatment of COVID-19", and "limits [on] liability for volunteer health care professionals" in order to help fight the disease.

Which provisions in the bill specifically are opponents of the bill objecting to? Which measures are seen as benefiting corporate America over individuals?

Answer 1

Democrats have been trying to make the case that the stimulus package contains within it a corporate "slush fund" controlled by the Treasury Department and headed by Steve Mnuchin, and Democrats believe there is a high risk of mismanagement or outright corruption. From NYMag:

The central flash point concerns a $500 billion corporate bailout. [...] Its requirements that bailed-out firms protect their workers are too weak. (Protecting the workers is the whole rationale for bailing them out, after all — at least from the Democrats’ point of view.) More disturbing, it’s designed as a pool of money to be doled out by the Treasury secretary. That is to say, the money is, for all intents and purposes, personally controlled by Donald Trump, who selected the Treasury secretary, Steve Mnuchin, and could replace him on a whim. [...] One obvious outcome of this financing arrangement would be to create the all-but-certain outcome that the Treasury would select the Trump Organization as one of the worthy recipients of its largesse. Trump’s vacation properties have indeed been forced to shut down, and while an unbiased manager might not select the Trump Organization over needier coronavirus victims, Trump himself probably thinks differently. Indeed, at his press conference, the president did not even bring himself to deny that he might. “Let’s just see what happens,” he replied, as if the outcome might contain any mystery.

They also make the argument that the restrictions on the bailout fund that are in place to prevent some of the excesses by executives after the bailout of 2008 are weak, as are protections for workers who become unemployed. From Politico:

According to a senior Democratic aide, the party's concerns with the GOP proposal center on $500 billion for corporations; stock buyback language that can be waived by the Treasury secretary; only a two-year time frame on executive compensation limits; and no provisions to protect individuals from eviction. [...] Democrats also object to what they say is an insufficient amount of money for state and local governments and providing only three months of unemployment insurance. Democrats initially asked for $750 billion in state aid, and Republicans have countered with far less.

A further complication for the bill is the behavior by many of these firms and how they chose to spend money saved by the GOP tax cut. Instead of using that money to create rainy day funds, they instead used that money to repurchase stock in order to inflate executive compensation to the detriment of their workers.

Answer 2

For two thoughtful critiques, see e.g. Stop the coronavirus corporate coup by Matt Stoller, or, from around when the bill had just emerged, this interview of AOC and Stephany Kelton.

To raise but one quibble raised in the first piece:

Take Boeing. The aerospace giant of course wants a $60 billion bailout. Financial problems for this corporation predated the crisis, with the mismanagement that led to the 737 Max as well as defense and space products that don't work (I noted last July a bailout was coming). The corporation paid out $65 billion in stock buybacks and dividends over the last ten years, and it was drawing down credit lines before this crisis hit. It is highly politically connected; the board of the corporation includes Caroline Kennedy, Ronald Reagan’s Chief of Staff Ken Duberstein, three Fortune 100 CEOs, a former US Trade Representative, and two Admirals, one of whom is the board’s only engineer. Using the excuse of the coronavirus, Boeing is trying to get the taxpayer to foot the bill for its errors, so it can go back to making more of them.

Matt Stoller followed up in a second piece yesterday:

On Saturday, I went over the Christmas wish list of corporate lobbyists in this process, everything from Adidas letting people deduct gym costs to candymakers seeking a $500 million loan to Jeff Bezos and Elon Musk seeking $5B in loans for their space corporations. Of course what Wall Street sought, and got, dwarfed all of these requests.

Here’s how you can tell. A lot of reporters have been talking about how this is a $2 trillion deal, with a bunch of spending for hospitals and whatnot. But last night White House advisor Larry Kudlow announced it is actually a $6 trillion deal. And business reporter Charlie Gasparino said he’s hearing chatter that the total will be $10 trillion! Say what?!? [...]

Temporary Distressed Positions

Numbers like $6 trillion or even $10 trillion of government-backed credit to Wall Street are so large they don’t mean anything Fortunately, a major law major firm with a big mergers and acquisitions practice put it into context for us, with a memo to clients about how to prepare for this moment.

As stock prices decrease in response to market uncertainty, directors of public companies should be prepared to respond to increasing levels of shareholder activism and unsolicited takeover offers, as opportunistic parties with strong balance sheets look to take advantage of companies in temporary distressed positions.

In other words, millions of small and medium sized businesses are going to have no access to cash and revenue freezes, because of the pandemic and economic restrictions. And while there are provisions in the bill to get these businesses money, the reality is that neither our government nor our banks have the operational competence to write and direct checks quickly enough to avoid distress. Much of the cash out the door provisions for small businesses will actually be stolen by the payday lender-style ‘fintech’ operators authorized in the bill to make loans, a provision stuck in there by Senator Mark Warner.

The cash freeze to small business is already causing a crisis. FTC Commissioner Rohit Chopra made these points on Tucker Carlson last night. First, he noted, small business loan sharks are “crippling cash-strapped companies” with onerous contracts. Second, powerful corporations are using their position to cut off small businesses from supply chains. And third, corporate raiders are planning to buy up these businesses cheap. “Corporate raiders and PE firms are already sharpening their knives,” said one Goldman Sachs associate.

And that’s where this legislation comes in. Wall Street, with this bill, will now have $4-6T of government guaranteed low cost credit to go shopping for businesses in trouble. We could see the mother of all roll-ups, as small and medium sized businesses desperately try to get whatever they can from deep-pocketed private equity investors and monopolists. If that happens, America could look like a very different country after this pandemic is over.

(In case anyone worries about the amount of quoting, both articles end with "P.S. I am releasing all copyright claims on this essay. Take it! It’s yours!".)

Answer 3

The New York Times published a critique today, "The Coronavirus Bailout Stalled. And It’s Mitch McConnell’s Fault."

Its critique is mainly that all the money goes to businesses, with no provisions for the workers who are currently unable to afford groceries and utilities.

But Republicans are proposing different rules for big businesses. Recipients of government bailouts would be required to avoid job or wage cuts only “to the extent practicable” — a loophole so large it amounts to a lack of any meaningful obligation.

Secondly, Democrats want to increase health care funding, which is reasonable, given this is a health crisis.

They are pushing to deliver more funding for health care, and for state and local governments, and to expand unemployment benefits. These are worthy goals that deserve bipartisan support. Bringing the spread of the coronavirus under control remains the single best way to limit damage to the economy, and health care providers and local governments are on the front lines and running low on money.

Furthermore, it has been criticized as a slush fund that would allow Republicans to funnel billions to friendly companies.

[Democrats] argue the measure would give [Treasury Secretary Steve] Mnuchin too much discretion to decide which companies receive the funds, calling the proposal a “slush fund” for the administration. As the legislation is currently written, Mr. Mnuchin would not have to disclose the recipients until six months after the loans were disbursed.

In short, the Senate bill ignores workers and funnels money to executives instead of addressing what needs to be addressed in the crisis.

Answer 4

In addition to the reasons listed in the other answers:

Hopes for quick coronavirus stimulus deal break down

A Democratic aide said that the small business provision was drafted to exclude non-profits who receive Medicaid from being eligible for Small Business Administration assistance offered under the bill. That, according to the aide, would impact Planned Parenthood but also community health centers, rape crisis centers and disability service providers.

Answer 5

In addition, the Democrats are trying to include in this "must pass" bill a number of items that could almost certainly not pass otherwise and which have nothing to do with fighting the coronavirus or its economic effects. For example: requiring airlines to publish the carbon emissions of their flights and mandating election-day voter registration.

Source is the Wall Street Journal, citing the bill put out by Nancy Pelosi on Monday. The Hill also quoted Rep. Jim Clyburn as saying this was a "tremendous opportunity to restructure things to fit our vision."