{
  "id": "R46277",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R46277",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 620498,
      "date": "2020-03-19",
      "retrieved": "2020-03-22T17:39:17.040750",
      "title": "Federal Assistance to Troubled Industries: Selected Examples",
      "summary": "Serious disruptions for certain industries caused by the COVID-19 (coronavirus) pandemic have led to calls for federal government assistance to affected industries. Direct federal financial assistance to the private sector on a large scale is unusual, except for geographically narrow assistance following natural disasters. Nonetheless, assistance to business sectors affected by COVID-19 would not be the first occasion on which the federal government has aided troubled or financially distressed industries. Historically, aid\u2014sometimes popularly referred to as \u201cgovernment bailouts\u201d\u2014has taken many forms and has occurred under a wide variety of circumstances. Past assistance has involved such instruments as loan guarantees, asset purchases, capital injections, direct loans, and regulatory changes, with the specific mix of policies varying significantly from case to case. These differences make it somewhat subjective as to what should be defined as a \u201cbailout.\u201d\nTo help inform congressional debate, this report examines selected past instances in which the government has aided troubled industries, providing information about the way in which such assistance was structured, the role of Congress, and the eventual cost. In order to provide greater detail, the examples all involve cases in which federal assistance was (1) widely available to firms within an industry rather than being targeted to a particular firm; (2) extraordinary in nature rather than a type of assistance that is routinely provided; and (3) motivated primarily by a desire to prevent industry-wide business failures. The coverage is not exhaustive, and excludes cases in which assistance was targeted at individual firms rather than at entire industries. In some of these cases, the government was able to recoup much or all of its assistance through fees, interest, warrants, and loan or principal repayments. In others, there were no arrangements made for recoupment or repayment. The episodes considered include the following:\nRailroad Restructuring (1957-1987)\nFarm Credit System Crisis (1980s)\nSavings and Loan Crisis (1980s-1990s)\nAirline Industry (2001-2014)\nAuto Industry (2008-2014)\nTroubled Asset Relief Program (TARP) Bank Support (2008-present)\nMoney Market Mutual Fund Guarantee (2008-2009)\nAgricultural Trade-Aid (2018-2019)\nAssessing extraordinary assistance can be difficult as particular episodes may play out over decades and full data about assistance may be difficult to collect and analyze. Congress has sometimes included particular oversight and reporting requirements in statutes authorizing aid. In addition, there are broader policy concerns raised by government assistance that may be impossible to quantify and do not get captured in tallies of the government\u2019s income and expenses. \nPossible benefits of assistance may include avoiding potentially long-lasting disruptions to consumers, workers, local communities, and the overall economy; averting losses to federally guaranteed retirement funds; and maintaining federal tax revenues. Potential drawbacks to assistance include the possibility that it may reduce competition by rewarding incumbents over new entrants and distort the affected product market by causing (or prolonging) overproduction; that it may cause \u201cmoral hazard\u201d if firms respond to government assistance by acting with less financial prudence in the future; and that it can delay an industry\u2019s adjustment to structural problems such as high production cost and excess capacity. In every case, federal assistance to certain industries may raise questions about the fairness of providing assistance to some businesses but not to others.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
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          "url": "https://www.crs.gov/Reports/R46277",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4766,
          "name": "Aviation"
        },
        {
          "source": "IBCList",
          "id": 4767,
          "name": "Freight"
        },
        {
          "source": "IBCList",
          "id": 4803,
          "name": "Financial Stability"
        },
        {
          "source": "IBCList",
          "id": 4806,
          "name": "Manufacturing Policy"
        },
        {
          "source": "IBCList",
          "id": 4919,
          "name": "Farm Support"
        }
      ]
    }
  ],
  "topics": [
    "Agricultural Policy",
    "Economic Policy",
    "Industry and Trade",
    "Transportation Policy"
  ]
}