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Americans feeling the economic weight of the coronavirus are about to enter their third month without crucial government aid that helped keep millions of households afloat during the recession, The Hill reported. Two months have passed since Congress and the White House allowed emergency COVID-19 protections and safety net programs to expire. Those provisions, enacted in late March under the CARES Act, were credited with preventing an even worse economic downturn. Now, families are struggling to get by without supplemental unemployment funding, and many small businesses are reaching the end of financial lifelines that were extended by the federal government in the spring and summer. The lapse of emergency measures is expected to create lasting damage to the economy, making it even harder to return to pre-pandemic levels of growth and unemployment. “The damage on these families can scar for years,” said Andrew Stettner, an unemployment expert at the left-leaning Century Foundation. One of the biggest losses is the $600 in additional weekly benefits that Congress approved in the CARES Act. Economists across the political spectrum credit that provision with keeping consumer spending from cratering during one of the sharpest and most destructive downturns in the nation’s history. Despite broad bipartisan support for the CARES Act, Republicans have argued that the federal benefit was too high, pointing to some studies that showed 68 percent of recipients were earning more with the benefit than they did while working. GOP lawmakers said that discrepancy was a disincentive for people to go back to work, further slowing the recovery. Democrats countered with a slew of studies showing the benefit was having no tangible effect on the labor market at a time when unemployment was at historic highs.

For a second time, Libbey Inc. has extended the timeline under which it intends to emerge from chapter 11 bankruptcy, the Toledo (Ohio) Blade reported. In documents filed last week the Toledo-based table glass and stemware maker, which filed for bankruptcy protection on June 1, said it has received permission from the lender group backing its attempt to become solvent to extend the date by which a bankruptcy court judge will confirm a reorganization plan to Oct. 20. The lenders also agreed to extend the date by which Libbey must execute its reorganization plan to Oct. 26. Just a few weeks earlier, Libbey said that it had pushed back the date that the judge must approve its plan to Oct. 5 and the date by which it would execute that plan to Oct. 7. A preliminary reorganization plan was submitted to the federal bankruptcy court in Delaware on Aug. 21. A judge approved the plan on Aug. 24. But a final plan must be agreed upon by lenders and creditors. The reason Libbey sought a second extension from its lenders was because it had yet to strike a deal between the company and its worker unions to modify their collective bargaining agreements with regard to retiree health and welfare benefits. The century-old glass making firm announced yesterday that it had reached consensual, ratified agreements with the United Steelworkers and the International Association of Machinists & Aerospace Workers that resolved the retiree benefits issue. The changes will provide cost reductions that the company says it needs to successfully emerge from bankruptcy. The contract changes extend through 2024 and provide the company with some financial stability. The contract changes must be approved by the bankruptcy court.

House Democrats have started drafting a stimulus proposal of roughly $2.4 trillion that they can take into possible negotiations with the White House and Senate Republicans, according to House Democratic officials, Bloomberg News reported. The bill could get passed by the House next week. While smaller than the $3.4 trillion package the House passed in May, it remains much larger than what Senate Republicans have said they could accept. President Donald Trump has indicated he’d be willing to go as high as $1.5 trillion. “When you are talking about $2.2 trillion and $1.5 trillion you are in deal-making territory” said Representative Dan Kildee (D-Mich.). House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer had earlier pressed the White House for a $2.2 trillion package. As the top-line figure remains well above what the Trump administration has favored, the new House bill may do little on its own to resolve the impasse in talks that’s persisted since August. Senate Republicans have been unable to coalesce around an earlier $1 trillion proposal, and instead backed a $650 billion plan that ended up getting blocked by Democrats as insufficient. The bill adds to the previous $2.2 trillion Pelosi-Schumer plan with help for the U.S. airline industry to avert massive job losses, which could start Oct. 1 when restrictions expire from a prior round of federal assistance. Also included is small-business aid and a bailout for restaurants. 

Neiman Marcus Group Inc. is reducing the size of its store workforce as part of a reassessment of its business as it emerges from bankruptcy, Bloomberg News reported. The department store said that it began laying off some store workers on Wednesday after a reorganization of staff at its Neiman Marcus and Bergdorf Goodman locations. “We are evaluating every part of our business to ensure that the company is positioned for long-term success,” Neiman Marcus said in a statement. “We plan to separate from selling and non-selling associates.” The company declined to disclose how many employees would be affected by the cuts. Some new positions will be added for customer service and personal styling. Neiman Marcus is emerging from bankruptcy this month after filing for chapter 11 soon after coronavirus rocked global markets and the U.S. economy earlier this year. Neiman Marcus has been closing stores throughout the year, including the New York flagship location it opened in 2019. 

Federal Reserve Chairman Jerome Powell said the economic response to the coronavirus alleviated the fallout from the pandemic-induced recession but suggested Congress would likely need to spend more money to shore up parts of the economy that continue to struggle, the Wall Street Journal reported. “Our economy will recover fully from this difficult period,” Powell said in prepared remarks posted yesterday that are set for delivery at a congressional hearing today. The Fed will “do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.” Powell begins three days of hearings on Capitol Hill today, beginning with the House Financial Services Committee, where he will testify alongside Treasury Secretary Steven Mnuchin. Both men will also appear before the Senate Banking Committee on Thursday. Powell testifies tomorrow before a separate House panel overseeing the U.S. response to the coronavirus pandemic. Powell said that the economy had rebounded in recent months following the end of lockdowns imposed to slow the spread of the virus, and that gains in household spending likely reflected federal stimulus efforts that included expanded unemployment benefits. Powell has said the government will need to do more to support hard-hit businesses, state and local governments, as well as unemployed workers in those sectors to prevent deeper scars from slowing any rebound. Read more. (Subscription required.) 

To watch the House Financial Services hearing scheduled for 10:30 a.m. today, please click here. 

The Government Accountability Office (GAO) yesterday urged the Treasury Department and IRS to update and refine their estimate of the number of people who have not yet received their coronavirus relief payments, saying that doing so "could provide greater clarity about which populations may be at risk of missing out on the payment," The Hill reported. "Without an updated estimate, Treasury, IRS, other federal agencies, and IRS’s outreach partners are limited in their ability to appropriately scale and target outreach and communication efforts to individuals who may be eligible for a payment," the GAO said in a report. Legislation enacted in March directed the Treasury and IRS to provide most Americans with a one-time payment of up to $1,200 per adult and $500 per child. The agencies have said that the vast majority of the payments have been issued, but there are still some who have not received the payment to which they are entitled. Treasury estimated in April that 30 million individuals who typically are not required to file a tax return are eligible for a payment, including 14 million who don't receive certain federal benefits. The IRS has indicated that 5.3 million people have used the IRS's web tool for non-filers to claim their payments through July 31. As a result, there could be at least 8.7 million people who are eligible for a payment but haven't gotten one, the GAO said.

President Donald Trump said that he was open to more stimulus spending for pandemic relief in stalled talks with congressional Democrats, Bloomberg News reported. Trump, at a White House press conference yesterday, said that he liked “the larger numbers” in a compromise $1.5 trillion stimulus proposal from a bipartisan group of House lawmakers that was an effort to break a months-long deadlock over bolstering the U.S. economy amid the coronavirus pandemic. The plan from a 50-member group of House Democrats and Republicans has a bigger total spending figure than the administration previously endorsed. It’s also higher than what Senate GOP leaders say would be acceptable to Republicans. But Trump, on Twitter earlier yesterday, urged Republican lawmakers to accept a higher level of spending than the last proposal made by the Senate GOP. After initially proposing a $1 trillion stimulus at the end of July, Senate Republicans attempted to advance a bill providing $650 billion in economic aid, without the direct payments to individuals that the president — and Democrats — want.