Disney Lobbies for Cut of $500 Billion CARES Act Emergency Economic Aid Package In Light of Extended COVID-19 Closures
Faced with incredible financial difficulty in light of extended park, resort, and film studio closures due to the ongoing Coronavirus (COVID-19) pandemic, The Walt Disney Company is seeking economic relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act economic aid package that will be issued by the government in order to help subsidize loans to cities, states, or any other U.S. businesses that have “otherwise not received adequate economic relief” through other government programs.
The $500 billion “stabilization fund” — the most controversial element of Congress’ $2.2 trillion COVID-19 emergency economic aid package known as the “CARES Act” — will be used to backstop as much as $4 trillion worth of loans to large employers.
Decisions about how to deploy that money will be largely up to U.S. Treasury Secretary Steven Mnuchin and the Federal Reserve. Congress set relatively few conditions: $25 billion is set aside for passenger airlines, $4 billion is reserved for cargo airlines, and $17 billion is ticketed for “businesses critical to maintaining national security” — a carve-out widely believed to be primarily for beleaguered airplane-manufacturer Boeing Co.
The remaining money — at least $454 billion — is to subsidize loans to cities, states or any other U.S. businesses that have “otherwise not received adequate economic relief” through other government programs.
The U.S. Travel Association, the American Hotel & Lodging Association, the Asian American Hotel Owners Association and the International Franchise Association are lobbying for a dedicated fund just for travel-dependent businesses, urging loans for theme park entities like The Walt Disney Company, which is a member of the U.S. Travel Association, and other travel brands, like Marriott International Inc. Other travel-dependent entities include shopping, transportation, and hospitality-based companies.
In a letter addressed to the Federal Reserve and the Department of the Treasury, these companies covered the extent of losses impacting all travel-dependent businesses:
“Unlike other sectors of the economy, the government’s wide-spread quarantines, travel restrictions, and social-distancing measures related to COVID-19 are having a devastating and direct impact on travel-dependent businesses. Without customers, sales and revenue, travel-dependent businesses of all sizes are unable to meet labor and benefit obligations, rents, loan payments, and other basic operational costs. According to a recent study by Oxford Economics, these government-mandated limitations will lead to:
• 5.9 million jobs lost by the end of April, increasing the unemployment rate to 7.1%;
• $400 billion in revenue losses resulting from lost travel spending in the U.S., which will translate into a total loss of $910 billion in economic output; and
• A protracted recession of the U.S. economy, based on the travel sector losses alone.”