Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL-GOP cool to White House’s $1.6T coronavirus price tag: The latest White House coronavirus relief offer with a $1.6 trillion price tag received a cool reception Thursday from congressional Republicans.
The new offer from Treasury Secretary Steven Mnuchin, which exceeds the original $1.1 trillion Senate GOP package and the $1.5 trillion the White House signaled it could support last month, was made as part of renewed talks this week with Democratic leaders.
But Republicans, including influential chairmen and members of leadership, are warning they can’t support it, creating another potential obstacle for negotiators trying to strike a deal on emergency COVID-19 aid after nearly two months of stalemate.
- Asked about the prospect of supporting a $1.6 trillion measure, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) was direct: “No.”
- Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, also appeared unsure he could back a bill with that dollar amount and criticized the inclusion of a $400 per week federal unemployment benefit.
- “It depends on what’s in it. That’s more than I would want to spend, but I do think it’s important to get something done,” said Sen. John Cornyn (R-Texas).
- Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) said he “would support a rational compromise,” but declined to say if he thought $1.6 trillion met that definition. Instead, he said he wanted to see the specifics.
The Hill’s Jordain Carney has more here.
The background: The pushback comes as Republicans have struggled to unite behind a strategy on the coronavirus relief talks.
- Senate Republicans initially unveiled a $1.1 trillion package in late July but Senate Majority Leader Mitch McConnell (R-Ky.) warned that he could lose up to 20 of his 53 GOP senators with that measure.
- A GOP bill in August that cost roughly $500 billion garnered support from every Senate Republican except Sen. Rand Paul (Ky.). The measure was blocked by Senate Democrats.
But to get a deal with congressional Democrats, Republicans would have to increase their price tag.
LEADING THE DAY
Company layoffs mount as pandemic heads into fall: Major corporations are laying off thousands of workers as the U.S. heads into fall facing a resurgent pandemic and deepening economic damage.
- Disney, American Airlines and Allstate are among the prominent companies axing thousands of workers at a time when new federal aid and a vaccine are both unlikely anytime soon.
- The pain is even sharper among small businesses that have fewer resources or access to capital to weather the prolonged coronavirus recession.
“Companies held on to workers expecting a much more rapid recovery than has been possible,” said Julia Pollak, labor economist at job posting and recruitment website ZipRecruiter.
“It’s clear now to many of these companies that a swift recovery is not possible.”
I explain why here.
- Disney announced Tuesday that it would lay off 28,000 workers as the entertainment conglomerate suffers from a sharp decline in resort and theme park revenue.
- American Airlines and United Airlines announced Wednesday they would lay off a combined 21,000 workers the following day without a bipartisan agreement for further aid.
- Oil companies like Shell, Marathon and Halliburton have announced plans to cut thousands of workers as the energy sector reels from falling demand.
- And the damage has extended to the financial sector, where insurer Allstate plans to cut 3,800 jobs and Wall Street investment bank Goldman Sachs plans to cut staff by 400 workers.
The context: Those job losses will not be reflected in Friday’s employment report for September, the last one to be released before Election Day, but the pain they bring may be front of mind for voters as they head to the polls and mail in their ballots.
The rise in job losses comes as the labor market was already showing signs of weakness, and as millions of Americans who have already lost their jobs are in danger of losing government support systems.
“If you pull away someone’s flotation device, they usually don’t sink immediately,” said Martha Gimbel, senior manager of economic research at Schmidt Futures.
“But eventually, they’re going to start drowning, and you’re just seeing companies accepting the fact that they are not going to be able to get through another six months, year, year and a half – however long this takes – without permanent changes to staffing and how they do business.”
Read more: New jobs report expected to underscore slowing recovery
Initial jobless claims drop to 837,000: The number of people filing initial unemployment claims for the last full week of September dropped to a seasonally adjusted 837,000, a drop of 36,000 from the previous week.
- The weekly number remains elevated beyond the worst levels recorded before the COVID-19 pandemic, where it has been for over six months.
- But the drop also puts claims at the lowest level they’ve been since the pandemic arrested the economy in March.
- The unadjusted data also saw a significant drop of 40,263, reaching 786,942 in the week ending Sept. 26.
“New unemployment claims in the traditional programs administered by states were down in the latest week, whether looking at the seasonally adjusted or non-seasonally adjusted counts. Still, they remain historically elevated,” said Bankrate senior economic analyst Mark Hamrick.
The Hill’s Niv Elis breaks it down here.
GOOD TO KNOW
- Stocks closed slightly higher Thursday as Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin continued last-ditch efforts to agree on a COVID-19 relief bill.
- A group of high-profile directors – including Clint Eastwood, Sofia Coppola, Martin Scorsese, Christopher Nolan and Lee Daniels – is calling on Congress to help movie theaters hit by the coronavirus pandemic, saying without some financial relief the cinemas “may not survive.”
- Growth in the manufacturing sector unexpectedly slowed in September, adding to weakness in the economy as the coronavirus pandemic rages on in the U.S.
- Thirty-five House Republicans on Thursday called for Democratic leaders to bring up a bill to free up funding and extend the Paycheck Protection Program through the end of the year.