President Donald Trump said Friday he supports restricting companies from using bailout money to repurchase their own stock, a condition congressional Democrats have pushed to include in any government aid for businesses dealing with the coronavirus.
Trump addressed the topic during a news conference on the COVID-19 pandemic. Stock buybacks would violate the intention of bailouts, which is to support workers, he said.
“I don’t want them taking hundreds of millions of dollars and buying back their stock. That does nothing,” he said. “The workers are my No. 1 concern. The way we take care of the workers is, we have to keep the companies going.”
Senate Republicans on Thursday released a proposed bill that would include $58 billion in collateralized loans for U.S. airlines but no grants.
Trump offered the assurances in response to a question about airlines that had used savings from the 2017 tax cut to buy back stock. The practice allows companies to remove shares from the market, boosting share prices that executives consider too low.
Share repurchases soared to record highs after passage of the tax law, which left companies with extra money on hand.
“There were some companies that used the money to buy back stock, driving up the prices artificially, in many cases. I don’t like that,” Trump said.
Democrats have railed against the practice, which they say favors shareholders over workers. Now, some see COVID-19 aid as an opportunity to curtail buybacks.
Democratic Sens. Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, ranking member of the Senate Banking Committee, have conditioned their support for a stimulus package on banning share repurchases.