with Brent D. Griffiths
Emergency economic relief considered hopeless just days ago suddenly has new life on Capitol Hill, as Democrats rally behind a $908 billion framework that some Republicans are also signaling they can support.
The measure still faces a tightening window for action and serious obstacles.
For one, while Democrats are cutting their preferred amount of aid roughly in half, Senate Majority Leader Mitch McConnell (R-Ky.) so far hasn’t expressed interest in the deal. Instead, he is hewing to a $550 billion package that twice failed to advance this fall.
But his No. 2, Senate Majority Whip John Thune (R-S.D.), sounded more amenable, telling my colleagues that Democratic leaders have “gotten reasonable.” He suggested a compromise between the Republican proposal and the measure Democrats are backing, which a bipartisan group of senators first rolled out Tuesday.
The big takeaway from the flurry of activity Wednesday, however, was the momentum building for action.
Top Democrats are wrapping their arms around the nearly $1 trillion offer.
House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) said in a joint statement it should be the “basis for immediate bipartisan, bicameral negotiations,” in probably the first instance after months of fruitless talks that “leaders from one party agreed to back a proposal that had substantial support of members of the other party,” Mike DeBonis, Jeff Stein and Seung Min Kim write.
President-elect Joe Biden likewise endorsed the effort, saying it “wouldn’t be the answer, but it would be the immediate help for a lot of things.”
From Bloomberg’s Jennifer Jacobs:
And more Republican senators embraced it, too: Per my colleagues, Sen. Shelley Moore Capito (R-W.Va.) said she would support the plan.
The bipartisan measure includes:
- A $300-per-week boost in federal unemployment benefits through at least March, down from the $600 per week benefit Democrats have pushed. It is not clear whether the benefit would begin in January or retroactively cover the final months of this year, when the enhanced aid expired
- $160 billion in support to state and local governments, a key Democratic demand
- Nearly $300 billion for small businesses, including another round of funding for the Paycheck Protection Program
- $82 billion for schools
- $45 billion for transportation systems
- And $25 billion in rental assistance, among other items.
It does not carry another round of $1,200 stimulus checks, a Democratic priority. It does include liability protection for businesses and other institutions, a Republican stipulation that Democrats oppose, though the language hasn’t been hashed out yet.
The aim, if lawmakers can reach an agreement, is to add the measure to a $1.4 trillion government funding bill that must pass before Dec. 11 to avoid a shutdown, barring a short-term extension.
Based on the latest action, Goldman Sachs chief U.S. political economist Alec Phillips forecasts that a $700 billion package, “roughly halfway between the Republican proposal and the bipartisan proposal that Democratic leaders appear to be backing,” will pass before the end of the year.
James Lucier, managing director at Capital Alpha Partners, is more skeptical. He pegs the odds for a measure between $500 billion and $1 trillion passing by the end of the year at no higher than 30 percent. The path to an agreement, he wrote in a Wednesday note, “does exist and has existed for months. However, it needs to be the right bill. The House and Senate are far apart on their relative senses of urgency, the necessary scale, and how funding should be targeted.”
The potential breakthrough on emergency relief comes as the economy shows new signs of stress.
Businesses slowed their hiring in November, “adding only 307,000 workers to their private payrolls — missing the benchmark that analysts had expected and probably heightening concerns that companies and households will continue to struggle without further action from Congress to deliver coronavirus aid,” Hamza Shaban writes.
That result, from the figures reported by the ADP Research Institute, marked a steep drop from the 405,000 new jobs recorded in October — an even bigger miss from the 475,000 added jobs some economists projected. The Labor Department’s monthly report, set for release on Friday, will offer greater clarity.
In the meantime, the Federal Reserve’s latest “beige book” found “little or no growth” in four of the central bank’s 12 districts, “and only modest growth in the others in recent weeks as a rapidly spreading health crisis and ongoing recession continued to devastate some U.S. businesses and families,” Reuters’s Howard Schneider and Ann Saphir report.
Latest on the federal pandemic response
PPP was a big boon to larger businesses.
New data shows most of the funding went to larger companies: “More than half of the money from the Treasury Department’s coronavirus emergency fund for small businesses went to just 5 percent of the recipients, according to data on more than 5 million loans that was released by the government Tuesday evening in response to a Freedom of Information Act request and lawsuit,” Jonathan O’Connell, Andrew Van Dam, Aaron Gregg and Alyssa Fowers report.
“According to data on the government’s Paycheck Protection Program (PPP), about 600 mostly larger companies, including dozens of national chains, received the maximum amount allowed under the program of $10 million. Officials from the Treasury Department and the Small Business Administration (SBA) have argued the program primarily benefited smaller businesses because a vast majority of the loans ― more than 87 percent ― were for less than $150,000, as of August. But the new data shows more than half of the $522 billion in the same time frame went to bigger businesses, and only 28 percent of the money was distributed in amounts less than $150,000.”
The Trump Organization and Kushner companies benefitted: “Over 25 PPP loans worth more than $3.65 million were given to businesses with addresses at Trump and Kushner real estate properties, paying rent to those owners. Fifteen of the properties self-reported that they only kept one job, zero jobs or did not report a number at all,” NBC News’s Ben Popken and Andrew W. Lehren report.
“The loans to Trump and Kushner properties included a $2,164,543 loan to the Triomphe Restaurant Corp. at the Trump International Hotel & Tower in New York City. The company reported the money didn’t go to keeping any jobs. It later closed.”
Money on the Hill
Christopher Waller is expected to be confirmed later today.
After a string of failures, Trump will get one likely final addition to the Fed board: “A macroeconomist, Waller is the director of research at the Federal Reserve Bank of St. Louis. His main research areas include monetary theory and macroeconomic theory. Before joining the St. Louis Fed in 2009, Waller led the economics department at the University of Notre Dame, among other academic postings,” Rachel Siegel reports this morning.
“Waller’s nomination has often been framed in contrast to Judy Shelton’s, and he has largely stayed under the radar while Shelton’s confirmation battle has swerved from one direction to the next. Waller is viewed by lawmakers and economists as representing the mainstream sphere of the Republican Party, while Shelton is associated with the deregulatory views of more-conservative economists.”
- It’s unclear if Shelton will ever receive another vote: “On Wednesday, Mark Kelly (D-Ariz.) was sworn in to office, replacing Republican Sen. Martha McSally and narrowing the GOP’s Senate majority to 52-48 for the final days of the lame-duck session. Republican Sens. Susan Collins (Maine), Mitt Romney (Utah) and Lamar Alexander (Tenn.) oppose Shelton’s nomination.”
Sen. David Perdue (R-Ga.) trades more stocks than any other senator: “As a member of the Senate’s cybersecurity subcommittee, Perdue has raised alarms that hackers from overseas pose a threat to U.S. computer networks. Citing a frightening report by a California-based company called FireEye, Perdue was among the senators who asked this spring that the National Guard prepare to protect against such data breaches,” the New York Times’s Stephanie Saul, Kate Kelly and Michael LaForgia report.
“Not only was the issue important to Perdue, so was FireEye, a federal contractor that provides malware detection and threat-intelligence services. Beginning in 2016, the senator bought and sold FireEye stock 61 times, at one point owning as much as $250,000 worth of shares in the company.”
- His trading far surpasses his colleagues: “The Times analyzed data compiled by Senate Stock Watcher, a nonpartisan website that aggregates publicly available information on lawmakers’ trading, and found that Mr. Perdue’s transactions accounted for nearly a third of all Senate trades reported in the past six years. His 2,596 trades, mostly in stocks but also in bonds and funds, roughly equal the combined trading volume of the next five most active traders in the Senate.”
Democrats continue to slam Perdue on the issue before January’s Senate runoff: “Super PACs run by allies of Minority Leader Chuck Schumer are flooding the airwaves in the state. The Georgia Way and Georgia Honor — two newly formed super PACs affiliated with Senate Majority PAC — have spent more than $10 million so far since Nov. 3 on ads hammering Perdue and Sen. Kelly Loeffler (R-Ga.) over their portfolios,” Politico’s Marianne Levine and James Arkin report.
Rep. Katie Porter grilled another Trump administration official:
Treasury Secretary Steven Mnuchin began to lose his patience: “Porter and Mnuchin argued over details of the Cares Act at a House Committee on Financial Services hearing. Mnuchin has demanded that any unused funds from the $2.2 trillion bill should be returned to the Treasury Department if they remain unused at the end of the year. Porter challenged the legal reasoning behind the demand,” Newsweek’s Aila Slisco reports.
Biden economic pick faces allegations of mismanagement, verbal abuse.
A former employee of Heather Boushey went public with her account: “A former colleague of Heather Boushey, a top economic adviser to Biden, is publicly airing prior accusations that Boushey mismanaged the think tank she runs and verbally abused her and other subordinates, saying she wants to prevent future White House employees from enduring a similar experience,” Politico’s Alex Thompson and Theodoric Meyer report.
“Claudia Sahm, a former director of macroeconomic policy at the Washington Center for Equitable Growth, Boushey’s think tank, published an account of her and other former employees’ experiences working with Boushey on her personal website Tuesday night. She wrote that after her experience, ‘I learned that Heather’s abusive behavior was a pattern.’”
- More details: “Former subordinates and employees have alleged that Boushey was ‘phenomenally incompetent as a manager’ and had ‘frequent episodes of yelling and swearing.’ The complaints were serious enough that the think tank where she worked hired a management coach to work with her to improve her management style around 2015.” The transition team declined to comment to Politico.
- Companies urge Biden to address climate change: “A broad cross section of big U.S. corporations including Amazon.com Inc., Citigroup Inc. and Ford Motor Co. are calling on Congress to work closely with the president-elect to address the threat of climate change,” the WSJ’s Timothy Puko reports. (Amazon CEO Jeff Bezos also owns The Washington Post.)
- Transition team to meet with Latino lawmakers: “Top brass from are meeting with members of the Congressional Hispanic Caucus as the president-elect faces growing and critical pressure from various interest groups about who he nominates to run major agencies in his incoming administration,” the Guardian’s Daniel Strauss reports.
Muted day on Wall Street as stocks barely move.
The S&P 500 did notch a record close: “The broad market index ended the day up 0.2 percent at 3,669.01. The Dow Jones Industrial Average climbed 59.87 points, or 0.2 percent. The Nasdaq Composite dipped 0.1 percent to 12,349.37. It was the second straight record close for the S&P. The Nasdaq also reached an all-time closing high in the previous session,” CNBC’s Fred Imbert and Maggie Fitzgerald report.
“Energy and financials were the best-performing sectors in the S&P 500, advancing 3.2 percent and 1.1 percent, respectively. Boeing led the Dow higher with a gain of 5.1 percent. However, Boeing’s pop was slightly offset by an 8.5 percent drop in Salesforce after the cloud company confirmed its acquisition of messaging platform Slack for $27.7 billion.”
- Morgan Stanley’s downgrade of Palantir sent shares spiraling: “Shares of the company closed down more than 12 percent Wednesday after Morgan Stanley downgraded the stock to underweight from equal weight,” CNBC’s Jessica Bursztynsky reports. “The firm said Palantir is trading at a ‘significant premium’ compared with its peers, with its stock more than doubling since it went public Sept. 30.”
House approves bill to ease delisting of Chinese companies that resist transparency. “The bipartisan measure passed the Senate in May and could quickly become law with President Trump’s signature. The fight over China’s resistance to allowing overseas inspections of its companies’ audits has lasted for years but reached a fever pitch during the Trump administration,” WSJ’s Dave Michaels and Alexander Osipovich report.
“Under the measure, Chinese companies and their auditors would have three years to comply with the inspections before a trading prohibition could take effect.”
From the U.S.:
- Another day of grim milestones: “The United States counted more than 200,000 coronavirus cases in a day for the first time, while the number of people currently battling the virus in hospitals went over the 100,000 mark. This comes as the country is heading into what is predicted to be a difficult winter in the midst of the pandemic and flu season,” Meryl Kornfield and Jacqueline Dupree report.
- Wednesday saw a record number of covid deaths in a single day. There were 3,157 people who succumbed to the disease, “an increase of about 20% from the previous record of 2,603 set on April 15,” CNN reports.
- CDC says quarantines can be shorter: “The standard 14-day coronavirus quarantines potentially can be shortened to 10 days or even seven, according to revised guidance issued by the Centers for Disease Control and Prevention in an effort to boost compliance with one of the most important tools for limiting spread of the virus,” Joel Achenbach reports.
- Employers are exploring whether they could require a vaccine: “Once a coronavirus vaccine receives formal government approval, employment lawyers say it’s more likely to be treated like the flu shot, which can be mandated, even if it’s currently rare outside the health care field. But that comes with several important caveats. Employers must abide by any state or local laws, as well as provide ‘reasonable accommodations’ to people with qualified disabilities and to those who have religious objections, as required by the ADA and Title VII, respectively,” Jena McGregor reports.
- Life insurance companies are trying to avoid people with covid: “Millions of people who survived Covid-19 are expected to be dealing with medical issues including heart, kidney, and lung damage long after the pandemic subsides. But the long-term effects on mortality are unknown, even for those who had mild or asymptomatic cases. That’s left life insurance companies without the risk data they typically rely on in deciding who to cover, meaning survivors could have a harder time getting coverage or have to pay more for skimpier plans,” Bloomberg News’s Lydia Wheeler reports.
From the corporate front:
- UPS slaps shipping limits on Gap, Nike and other big companies: “The delivery giant on Cyber Monday notified drivers across the U.S. to stop picking up packages at six retailers, including L.L. Bean Inc., Hot Topic Inc., Newegg Inc. and Macy’s Inc. …The temporary limits, which some drivers say they haven’t seen during previous holiday seasons, are a sign that UPS is metering the flow of packages into its network to preserve its performance during one of the busiest shipping weeks of the year,” the WSJ’s Paul Ziobro reports.
- CVS, Walgreen gear up for vaccines: “The two retailers will deliver most vaccine doses for the nation’s approximately 15,600 nursing homes and 29,000 assisted-living communities,” the WSJ’s Jared S. Hopkins and Anna Wilde Mathews report.
- $1.1 billion may be returned to some T.V. customers: “Pay-TV providers like AT&T Inc., Verizon Communications Inc. and Charter Communications Inc. kept collecting sports-programming fees even as the pandemic canceled sporting events like college basketball tournaments and disrupted pro leagues like the MLB, NBA and NHL,” Bloomberg News’s Scott Moritz and Gerry Smith report. Rebates may start appearing soon.
Around the world:
- U.K.’s quick vaccine authorization leads to grumbling elsewhere: “Some foreign officials complained about a sense of British patriotism and accomplishment over a product by two non-British companies … Despite concerns that the U.K. emergency authorization could put pressure on regulators in the United States and Europe to speed up their own approval processes, there were no immediate signs of that on Wednesday,” Rick Noack, Michael Birnbaum and Ruby Mellen report.
American Airlines starts 737 Max flights.
The airline wants to boost confidence in the beleaguered jet: “American is flying its employees, including top executives, and reporters on its Boeing 737 Max planes this week in hopes of boosting confidence in the jetliners that were grounded for 20 months after two crashes that killed 346 people,” CNBC’s Leslie Josephs reports.
“American is set to become the first commercial airline to resume flights with paying passengers on the 737 Max. It plans to start commercial flights between Miami and New York’s LaGuardia Airport on Dec. 29.”
Gary Cohn is playing hardball with Goldman: “When Goldman Sachs declared its intent to reclaim $67 million from five former top executives over the sprawling 1MDB corruption scandal, it made clear it had already pocketed the money from all but one of them,” Bloomberg News’s Sridhar Natarajan reports.
“The lone holdout — Gary Cohn. Six weeks later, Goldman is still waiting on its former president to pony up the cash. The bank has failed to persuade Cohn to part with over $10 million in pay he’s already received … And there’s little the firm can do if he simply refuses or offers up a discounted sum, they said.”
Salesforce CEO sets his company on competing with Microsoft: “Salesforce and Slack might be the underdogs here, if you can consider a $220 billion company an underdog. But they have a not-so-secret weapon in Marc Benioff. He learned some lessons in showmanship from his mentor, the Apple co-founder Steve Jobs, including how to turn news conferences into events and how to become the human embodiment of a company,” the Times’s David Streitfeld reports after the Salesforce acquisition of Slack.
M.B.A. applicants brace for extremely competitive year: “Getting into an M.B.A. program might be tough in 2021, following an admissions cycle that U.S. business schools and consultants say is shaping up to be the most competitive in recent memory,” the WSJ’s Patrick Thomas reports.
“B-school applications for fall 2020 surged at the start of the pandemic as students sought ways to ride out a tenuous job market. Now, full-time residential M.B.A. programs continue to report higher application volumes for next fall and expect to have fewer spots to offer than in years past, since schools have allowed many international students to defer enrollment due to virus-related travel restrictions.”
Elizabeth Holmes’ trial to play out before face-masked jurors in socially distanced courtroom (CNBC)
- The Labor Department reports the latest weekly jobless claims
- Kroger, Dollar General, Ulta Beauty, Smith & Wesson, Lands’ End and Cracker Barrel Old Country Store are among the notable companies reporting their earnings
- The Labor Department releases the November jobs report
- AT&T chief executive John Stankey speaks at a Post event about the future of broadband access