President Donald Trump said on Thursday that he would not oppose barring companies that receive federal assistance during the coronavirus pandemic from conducting stock buybacks.
“It takes many many people in this case to tango, but as far as I’m concerned conditions like that would be okay with me,” Trump said during a White House press conference when pressed on whether he would support a provision forbidding stock buybacks in a bailout bill.
Trump said he was “never happy” with stock buybacks, but that it was difficult to prevent companies from doing them. “It’s very hard to tell them not to, but I would tell them not to, I would say I don’t like it,” he said.
The comments come as the White House and Congress are hammering out the details of a stimulus package expected to top $1 trillion in spending.
U.S. airlines, which are at the epicenter of the coronavirus outbreak as bookings crumble and cancellations outpace bookings, are seeking more than $50 billion aid, including direct grants from the government.
Some lawmakers, however, say that any bailout must ban on buybacks.
The four biggest U.S. carriers — Delta, American, Southwest and United — have collectively spent about $39 billion over the last five years buying back shares, according to a tally from S&P Dow Jones Indices.
Those carriers’ shares are now trading at multiyear lows. Boeing, which is also seeking government aid, spent more than $35 billion in that period.
Proposals to put conditions on federal bailouts have come from progressive lawmakers including Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y.
Warren has proposed that companies receiving federal assistance should be barred from buybacks permanently, and prevented from issuing dividends or executive bonuses for three years.
Warren has also proposed requiring those firms to boost their minimum wage to $15 an hour within a year of the end of the crisis, and provide a board seat to workers.
“If there is so much as a DIME of corporate bailout money in the next relief package, it should include a reinstated ban on stock buybacks,” Ocasio-Cortez tweeted earlier this week.
Billionaire entrepreneur Mark Cuban has also weighed in, saying that bailed out firms should be barred from buybacks forever.
“Not now. Not a year from now. Not 20 years from now. Not ever,” Cuban told CNBC on Wednesday. “Because effectively you’re spending taxpayer money to buyback stock and to me that’s just the wrong way to do that.”
Airlines for America, the sector’s lobbying group, argued Tuesday that “U.S. carriers have invested heavily in their employees, who are the backbone of the industry, to increase salaries and pensions over the last decade,” saying that between 2010 and 2018 airline worker compensation rose about 41% on average.