As much of the economy melts down amid the coronavirus pandemic, many large corporations are lining up for financial bailouts from the federal government.
Assuming the right safeguards are put in place, these payments may be justified.
Yet there is a risk that big business may also seek another kind of assistance whose benefit is more dubious: relief from regulations.
Some loosening of restrictions make sense in a crisis. Federal regulators are already taking steps to address immediate needs. The FDA is changing rules so that private labs and state health departments can more readily use COVID-19 tests developed outside of the agency. HHS is allowing healthcare providers to bill Medicare for telemedicine sessions.
Those are the no-brainers. But what about the decision by the Federal Motor Carrier Safety Administration to relax restrictions on truck driver hours for those making emergency deliveries? Do we want sleepy drivers on the road, even if they are doing essential work?
And then there are the calls from big banks for lower capital requirements and the easing of periodic stress tests. The point of those requirements is to make sure banks are in a position to weather a downturn. Relaxing the rules is something the big banks were urging well before the pandemic. Their push now may be little more than an effort to exploit the crisis.
We are likely to see more calls for regulatory easing both from corporations and from Trump administration agencies such as the EPA that have already been trying to undermine existing safeguards.
There is also a debate on whether regulatory rulemaking should continue at a time when many regulators are working from home and many advocates may have a harder time monitoring current proceedings.
Since many of those proceedings involve efforts by industry and the Trump Team to roll back or eliminate current rules, delays would provide a welcome obstacle to the deregulatory juggernaut. On the other hand, agencies may use the pandemic as an excuse to reduce the opportunities for public interest groups to intervene.
Another gnarly question is how to handle bailouts for corporations that have less than stellar records for regulatory compliance. We don’t want to ignore the needs of employees of those companies who might otherwise lose their jobs. But it also doesn’t feel right to be handing over large sums to firms that have flouted the law.
If those payments happen, among the strings that need to be attached could be provisions requiring companies to strictly adhere to all applicable laws and regulations. Scofflaws would be compelled to repay the money and face other serious consequences.
Big business should not be allowed to use the pandemic as cover for undermining safeguards that protect us from the many other dangers in the world.