Why The Election Results Mean No Government Bailout For Travel

Conventional wisdom was that airlines would get a second bailout. J.P. Morgan analysts said last week it’s a question of when, not if. The drive for a bailout was led by labor, and their candidate is increasingly looking to have won the Presidency. But a bailout for airlines – and other sectors of the travel industry – is now far less likely.

  • It won’t happen in the lame duck session. President Trump no longer needs a deal – any deal – to show a win before the election, since the election has already happened. He’s no longer over a barrel where the starting point is the House Democrats’ bill and their priorities.

  • A Biden victory means Republicans oppose spending. Senate Republicans now find religion on the size of government, deficits and overspending. They also point to an economic recovery that ‘started under Trump’ so stimulus is unnecessary, lest Biden point to his spending package as the cause of recovery.

  • Negotiations start from scratch since it’s no longer Trump and Pelosi as chief negotiators, Trump trying to get any deal so he can send out checks under his name and declare victory while giving the Democrats their full list of priorities, a new package is going to have to get through a Republican Senate that’s no longer trying to get re-elected themselves and no longer under the thumb of President Trump.

    The baseline for size of any deal is smaller. Republicans won’t put a deal up for a vote that doesn’t have the backing of their own caucus and there isn’t Republican support in the Senate for a trillion dollar-plus bill.

    That means spending priorities have to get jettisoned. $15 billion for the Post Office; aid to states sufficient to bail out their pensions; $12 billion for wifi hotspots in schools and libraries; $250 million to discourage recidivism by ex-prisoners; $175 million for PBS. All of these items go back on the table, along with $25 billion for airlines, in looking to negotiate a deal that the Senate can pass.

Despite about $100 million spent to defeat Lindsay Graham and $100 million spent to defeat Mitch McConnell, the two were re-elected by a combined 35 points. McConnell’s view of the Senate’s agenda presumably matches what he outlined early in the Obama presidency:

Two years from now Republicans will be torn between a newfound fiscal conservatism and looking to defend about 20 seats versus the Democrats’ 12. The President’s party usually loses seats in a midterm, but Republican seats that are potentially vulnerable include Marco Rubio (Florida), Ron Johnson (Wisconsin) and seats where incumbents are retiring in North Carolina and Pennsylvania. And with the Democrats’ House margin smaller after the 2020 elections, they may be on the defensive in 2022 as well.

Assuming Joe Biden is in fact the next President, he may not have the honeymoon that Presidents once received and to the extent he does he’ll need it for Senate confirmations of his cabinet and other similar appointments. Any new or additional federal bailout for travel probably gets caught in the gridlock of divided government.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I think you’re right, Gary. Assuming Biden wins, Senate Republicans will suddenly find fiscal-restraint religion. Cynically hilarious.

  2. Weren’t several $1200 stimulus checks totaling $1.4 billion sent to dead people a few months ago? I wonder what happened to that money and whether congress could redistribute it to real people.

  3. Stimulus checks sent to the previous occupant of my home ended up in the trash. They hadn’t lived there for well over a year. (I’m not eligible to get any stimulus checks.)

  4. Poetic for the the airlines, both senior management and the gullible unions, after they backed Biden!!
    If/when there is some sort of second round, the money should be directed to the individuals and businesses who got short sheeted in the last one.

  5. So your saying Pelosi screwed the airlines and it’s unions by not agreeing with Trumps last offer?

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