Southwest Airlines Co. dramatically expanded its furlough warnings, telling employees that 6,828 jobs are at risk as the company and its labor unions have failed so far to agree on how to cut $500 million in costs, Bloomberg News reported. Pilots, flight attendants, baggage handlers and other workers got notices yesterday that they may be furloughed, Southwest said. The new warnings boosts the number of people at risk of being cut between January and April 1 to 7,273, or nearly 13 percent of the workforce. Southwest’s inability to secure a 10 percent reduction in 2021 spending for each work group means the company is on the brink of its first involuntary job cuts in its 49-year history. With the coronavirus pandemic keeping travel demand at about 40 percent of last year’s levels, the airline says it has 20 percent more employees than it needs -- at an expected cost next year of $1 billion. “We are willing to continue negotiations quickly to preserve jobs if we can achieve the support that allows Southwest to combat the ongoing economic challenges,” said Russell McCrady, Southwest vice president of labor relations. The latest notices were the third batch in four weeks that Southwest has sent warning of potential layoffs. The earlier letters went to 445 mechanics, employees who manage parts inventory, technicians who clean aircraft and other workers. Talks began in October, with the goal of securing agreements by the end of that month. The carrier earlier reached deals with two small work groups.
House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) on Wednesday threw their support behind using a bipartisan, compromise plan as the basis for COVID-19 relief talks, The Hill reported. “While we made a new offer to Leader McConnell and Leader McCarthy on Monday, in the spirit of compromise we believe the bipartisan framework introduced by Senators yesterday should be used as the basis for immediate bipartisan, bicameral negotiations,” the Democratic leaders said in a joint statement, referring to Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Kevin McCarthy (R-Calif.). Prior to November’s election, Pelosi turned down a $1.8 trillion offer from Treasury Secretary Steven Mnuchin, who was negotiating on behalf of the Trump administration, citing major differences on policy details. McConnell has insisted on a “targeted,” $500 billion approach. The stakes for passing a relief bill during the lame-duck session are monumental. Two crucial unemployment programs are set to expire on Dec. 31, which would leave an estimated 12 million people with no income during the worst phase of the pandemic so far. The move to put a $908 billion compromise bill at the center of talks is a significant retreat from the $2.2 trillion HEROES Act that Democrats have been pushing in recent months, and will add pressure on McConnell to respond in kind. Other key programs, such as $600 in supplemental unemployment insurance and a forgivable loan program for small businesses called the Paycheck Protection Program (PPP) expired in the summer. While McConnell has repeatedly spoken of the need for relief, he said yesterday that he was sticking to his plan with the backing of the White House. Read more.
In related news, U.S. Treasury Secretary Steven Mnuchin said on Wednesday he backs another $20 billion in additional government payroll support for U.S. airlines, Reuters reported. “I think that would be very meaningful in terms of employment and saving the industry,” Mnuchin said at a House hearing. A bipartisan proposal released Tuesday called for $17 billion in payroll support for airlines to extend the program for four months. In October, American Airlines and United Airlines furloughed more than 32,000 workers after a prior $25 billion payroll assistance program expired. Airlines spent months seeking a new bailout and have won overwhelming support in the U.S. Congress, but lawmakers have been reluctant to support airlines, while other transportation modes like transit, buses, and rail railroad Amtrak are also seeking emergency aid. The Treasury separately offered $25 billion in loans to airlines; to date it has approved more than $21 billion in loans, including $7.5 billion for both American and United. Mnuchin also said that he backed aid for the struggling private motorcoach industry. The bipartisan proposal released on Tuesday would extend $8 billion to bus companies. Read more.
A bipartisan group of lawmakers yesterday introduced a coronavirus aid proposal worth about $908 billion, aiming to break a months-long partisan impasse over emergency federal relief for the U.S. economy amid the ongoing pandemic, the Washington Post reported. The new plan came amid a flurry of congressional jostling about the shape of economic relief, with House Democrats assembling a new proposal, Senate Majority Leader Mitch McConnell (R-Ky.) creating a new plan and President-elect Joe Biden calling for a massive government response. The plan circulated by the bipartisan group of senators is light on details but seeks to reach a middle ground on numerous contentious economic issues. It would provide $300 a week in federal unemployment benefits for roughly four months — a lower amount than the $600 per week Democrats sought, while still offering substantial relief to tens of millions of jobless Americans. The agreement includes $160 billion in funding for state and local governments, a key Democratic priority opposed by most Republicans, as well as a temporary moratorium on some coronavirus-related lawsuits against companies and other entities — a key Republican priority that most Democrats oppose. The measure also includes funding for small businesses, schools, health care, transit authorities and student loans, among other measures. Read more.
In related news, U.S. airlines would receive $17 billion for four months of payroll support under a new $908 billion bipartisan Senate COVID-19 relief proposal, Reuters reported. A bipartisan group of lawmakers announced a package of $45 billion in transportation assistance, and the offices of Senators Mitt Romney and Mark Warner said the plan includes $15 billion for transit systems, $4 billion for airports, $8 billion for private buses and $1 billion for passenger railroad Amtrak. The $45 billion in transportation assistance is designed to provide assistance for four months. Congress and President-elect Joe Biden can decide next year if more funds should be approved beyond March, Senator Joe Manchin (D-W.Va.) said. The White House has not yet said it supports the plan, and neither have Congressional leaders. A separate Senate Republican leadership relief plan summary sent to lawmakers later on Tuesday had no reference to additional transportation assistance. Read more.
Additionally, Senate Majority Leader Mitch McConnell (R-Ky.) yesterday circulated a new coronavirus relief proposal that could garner support from the White House among Senate Republicans, The Hill reported. McConnell said that he had been speaking with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows about what President Trump could sign. Congress is quickly running out of time to pass lame-duck legislation with the House poised to leave as soon as next week. Congress faces a Dec. 11 government funding deadline and McConnell said any coronavirus relief will ride on that. McConnell previously twice offered a roughly $500 billion coronavirus relief bill that was rejected by Democrats. McConnell's new proposal would provide protections against coronavirus-related lawsuits, extend unemployment insurance for roughly a month and provide another round of Paycheck Protection Program (PPP) small business assistance. It would also provide more money for the Postal Service, schools, testing and vaccine distribution. If Congress is going to pass additional relief, McConnell said he expected it would be folded into a must-pass government funding bill. Read more.
A bipartisan group of senators is holding discussions to try to get a deal on a fifth round of coronavirus relief amid a months-long stalemate between congressional leadership and the White House, The Hill reported. The talks are one of the first signs of life for a potential coronavirus agreement as congressional Democrats, Senate Majority Leader Mitch McConnell (R-Ky.) and the White House have remained far apart on both the price tag and the policy details. The group includes Republican Sens. Mitt Romney (Utah), Rob Portman (Ohio) and Susan Collins (Maine) as well as Democratic Sens. Chris Coons (Del.), Joe Manchin (W.Va.), Mark Warner (Va.), Michael Bennet (Colo.) and Dick Durbin (Ill.), the No. 2 Senate Democrat. Senators involved in the talks are eyeing an eventual government funding deal as a vehicle for coronavirus relief. Congress has to fund the government — either with a full-year omnibus or with a short-term continuing resolution — by Dec. 11. Any effort to revive the chances of another coronavirus deal faces an uphill path, even as cases climb across the country and some cities and states reinstate restrictions to try to curb the spread of the disease heading into what health experts expect to be a brutal winter season. McConnell has stood firm at pushing for a roughly $500 billion spending package similar to what has been blocked twice in the Senate. Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) say $2.2 trillion is the starting line for any negotiations. Read more.
In related news, Federal Reserve Chairman Jerome Powell said that the central bank’s actions to backstop a range of credit markets after the coronavirus convulsed Wall Street this past spring had unlocked almost $2 trillion to support businesses, cities and states, the Wall Street Journal reported. In testimony prepared for delivery at a congressional hearing today, Powell said that the Fed’s unprecedented steps to stabilize financial markets had largely succeeded in restoring the flow of credit from private lenders. Treasury Secretary Steven Mnuchin on Nov. 19 told Powell that he would not grant extensions for five lending programs that have backstopped markets for corporate and municipal debt and to purchase loans made to small businesses and nonprofits when those programs expire on Dec. 31. Powell didn’t elaborate in his testimony, released yesterday, about the central bank’s disagreement with Mnuchin’s decision. The Fed had earlier said that it would have preferred the lending programs had stayed open because the pandemic emergency hasn’t receded. Mnuchin is slated to testify alongside Powell at today’s hearing and didn’t address the conflict in his prepared testimony. Read more. (Subscription required.)
Click here to access a live web stream of the Senate Banking Committee's hearing "The Quarterly CARES Act Report to Congress" scheduled for 10 a.m. EDT today.
The Labor Department’s weekly reports on unemployment claims are relying on “inappropriate” methods and has “improperly presented” data on the number of claimants as a result, according to a report by the Government Accountability Office, The Hill reported. In normal times, DOL uses the number of initial jobless claims that states report each week to estimate the total number of overall claimants in a given week. But since the pandemic upended the U.S. economy, that method has led to an inaccurate tally, which is likely overstating the number of people collecting unemployment insurance. “[B]ecause backlogs in processing a historic volume of claims have led to individuals claiming multiple weeks of benefits at a time for previous weeks of unemployment, as well as other data issues, these traditional estimates have not been appropriate in the context of the pandemic,” GAO found. In other words, if a single person submits multiple claims over the course of a reporting period — something that would be rare in normal times — the DOL’s methods would count each claim as a separate individual claimant. A claimant jumping from one program to another in a piecemeal system could get counted multiple times.
