A diverse coalition of nearly 30 progressive advocacy groups is demanding that House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer act quickly to bar companies from using Covid-19 bailout money to finance a “tsunami of corporate mergers that will devastate workers, small businesses, and the communities they support.”
In a letter (pdf) to the Democratic leaders on Friday, the groups specifically demanded that the next coronavirus stimulus package include legislation by Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) that would impose a moratorium on corporate mergers and acquisitions by large firms for the duration of the coronavirus crisis.
“Amid a growing economic crisis in which 26 million people have filed for unemployment insurance, the Federal Reserve and Treasury programs constitute the largest financial response to the coronavirus crisis and they represent a massive, enduring transfer of power to billionaires and big corporations,” reads the letter.
“Passing the Pandemic Anti-Monopoly Act, which is supported by an overwhelming, bipartisan majority of Americans, is the very least Congress can do.”
—Sarah Miller, American Economic Liberties Project
“Yet for the most part, large corporations and financiers with access to this credit still have free rein not only to fire workers, enrich their CEOs, or buy back their own stock, but also to merge or buy up their smaller competitors,” the letter continues. “Without safeguards like Senator Warren’s and Congresswoman Ocasio-Cortez’s Pandemic Anti-Monopoly Act, the problem of monopolies and corporate power will become even more dire.”
The CARES Act, which President Donald Trump signed into law in late March, handed the Treasury Department and Federal Reserve control over a $450 billion corporate bailout fund, which the central bank can leverage into $4.5 trillion. Under the law, the Fed and Treasury have wide discretion over how the taxpayer funds are used—and what, if any, conditions are attached to them.
Bharat Ramamurti, a member of the congressional oversight panel tasked with monitoring how the Trump administration uses the CARES Act funds, pointed out on Twitter earlier this week that there is currently “nothing stopping big companies from taking taxpayer support” while continuing to lay off workers and reward their shareholders.
Advocacy groups said Friday that a moratorium on corporate mergers is essential to prevent a “monopoly free-for-all.”
In a statement, American Economic Liberties Project president Sarah Miller said that “passing the Pandemic Anti-Monopoly Act, which is supported by an overwhelming, bipartisan majority of Americans, is the very least Congress can do.”
Evan Weber, political director of the youth-led Sunrise Movement, warned that “the unchecked power of monopolies is quite literally killing the planet.”
“We can’t afford to allow big corporations to further consolidate power in this moment of crisis.”
Today, with 26 national and state orgs, we sent a letter to @SpeakerPelosi @SenSchumer calling on them to include @ewarren & @AOC's Pandemic Anti-Monopoly Act in the next #COVID19 relief package. https://t.co/k3z3AH8CMg pic.twitter.com/jNpoYgVPIN— American Economic Liberties Project (@econliberties) May 8, 2020
In a separate letter (pdf) sent Thursday, nine advocacy groups—some of which were signatories to Friday’s letter to Congress—called on the Fed and Treasury Department to require a “freeze on all mergers and acquisitions activity” by corporate beneficiaries of taxpayer bailouts in order to avoid a repeat of the “merger wave” that followed the 2008 financial crash.
David Segal, executive director of the Demand Progress Education Fund, said in a statement that “corporate concentration begets and exacerbates crises, and the Federal Reserve must put strings on the bailout to make sure that recent trends towards increased concentration don’t accelerate during and after the pandemic.”
“Too-big-to-fail firms helped cause the 2008 crisis,” said Segal, “and lending practices by big banks are making it harder to address needs of small businesses and ordinary people as we confront the coronavirus.”
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