Former Vice President Joe Biden on Friday urged "every CEO in America" to commit to a year of no stock buybacks as the coronavirus pandemic wrecks the U.S. economy.
As Congress and the White House hash out an economic relief plan expected to easily top $1 trillion, Democrats have pushed for a proposal to specify that companies receiving aid must stop share repurchases. The suggestion by the Democratic presidential front-runner appears to go even further — to all public companies.
"As workers face the physical and economic consequences of the coronavirus, our corporate leaders cannot cede responsibility for their employees," Biden said in a tweeted statement.
Workers and businesses have already taken massive blows as efforts to slow the spread of the virus have frozen activity across the country. With layoffs already hitting restaurants, bars and hotels, and with industries such as airlines worried about solvency, lawmakers are trying to swiftly throw together a massive package to blunt the economic damage.
President Donald Trump said Thursday that barring companies that receive bailout money from buying back stock "would be okay with me."
Companies buy back their stock from either the open market or shareholders. Through the purchases, businesses can return money to shareholders and potentially raise their stock prices.
Such buybacks use money that businesses could use instead for other purposes: capital expenditures, paying down debt or investing in workers. Some Democratic lawmakers have criticized a wave of stock buybacks announced after the 2017 Republican tax cuts.
They now argue banning buybacks as a condition of federal government relief will help to make the corporate response to the pandemic more worker-friendly. Heading into talks about the latest response package Friday, Senate Minority Leader Chuck Schumer said he would not back a bailout without forbidding share repurchases.
"We are not going to go for any bailouts unless they are worker-friendly. The money goes to workers, employees, and no stock buybacks," said the New York Democrat.
Biden, who has expanded his pledged delegate lead over Sen. Bernie Sanders in recent primaries, has repeatedly criticized Trump's response to the coronavirus outbreak. He released his own plan to combat the pandemic earlier this month.
The U.S. now has more than 14,000 cases of the coronavirus disease COVID-19, and it has killed at least 205 people, according to data compiled by Johns Hopkins University.