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One of the most successful elements of the government’s response to the coronavirus recession — protecting people on the margins from falling into poverty — is faltering as the safety net shrinks and federal benefits expire, the Washington Post reported. Major recessions are especially fraught for low-income earners, whose finances can veer from tenuous to dire with one missed paycheck. But as the economy cratered this spring, economists and poverty experts were mildly surprised to discover that the torrent of government support that followed — particularly the $600 a week in expanded unemployment benefits and one-time $1,200 stimulus checks — likely lowered the overall poverty rate. In fact, 17 million people would have dropped below the poverty line without the $500 billion in direct intervention for American families, said Zach Parolin, a researcher at Columbia University. Now, data show, those gains are eroding as federal inaction deprives Americans on the financial margins of additional support. If the unemployment rate stays around 10 percent and no new stimulus is delivered, “we can expect poverty rates to rise and climb higher than those observed in the Great Recession,” Parolin said. The poverty threshold for a family of four is $26,200, according to the U.S. Department of Health and Human Services. Data collected by the Census Bureau capture the financial pain. For the week that ended July 21, the most recent numbers available, roughly 29 million U.S. adults — about 12.1 percent — said their household sometimes or often didn’t have enough to eat the preceding seven days, according to the Center on Budget and Policy Priorities. Nearly 15 million renters said they were behind on rent during the same period.

Two weeks have passed since President Trump announced that he would sidestep a congressional stalemate to deliver $400 in extra weekly benefits to tens of millions of unemployed Americans — a short-term fix meant to replace the $600-a-week emergency federal supplement that expired last month, the New York Times reported. Since then, as more details of the plan — known as Lost Wages Assistance — have emerged, so have problems with finding the funding and getting it to the hands of those who need it. What is now clear is that the federal supplement is $300 a week, not $400. And by Thursday, only one state, Arizona, had started paying out. The federal government is offering an extra $300 a week to unemployed workers. Trump is using money from the Federal Emergency Management Agency, which normally provides disaster relief. The additional $100 was supposed to be supplied by states, but most are struggling to meet other expenses. Tax revenues have been sinking at the same time that costs — like precautions to curb the spread of the coronavirus — have soared. Ultimately the administration said that the states’ basic benefit payments could be counted toward their $100 share. Montana is the only state so far to choose the $400 option, according to FEMA. Jobless workers with the smallest benefits will not get the supplement. Only people who qualify to receive at least $100 in unemployment benefits each week — either through the regular state program or a federal pandemic assistance program — are eligible for the extra federal funds. In Colorado, for example, the rule leaves out 6 percent of those receiving unemployment pay — or roughly 28,000 people, said Cher Haavind, deputy executive director of the state Department of Labor.

Delta Air Lines and the union representing its pilots said on Friday they remain in talks to avoid furloughs after 1,806 pilots agreed to early retirement programs, with the airline pointing to the outlook for a pandemic recovery as key to its final decision, Reuters reported. In a memo to pilots, Delta’s head of flight operations John Laughter said that there had been “additional changes to travel demand and recovery forecasts” in recent weeks that the airline is assessing as it charts a path for a multi-year recovery. Delta will communicate more this week, he said, without providing more details. A Delta spokesman said “furloughs remain a last resort and we continue to stay engaged with ALPA to find a way to spread the flying among the pilots to reduce or avoid furloughs altogether.” Delta had sent warnings of potential furloughs to 2,258 pilots, the Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) said in a statement, adding it hoped for additional voluntary options for pilots similar to programs at other major carriers.

With the labor market showing new fragility, most states have yet to seek funds under President Trump’s stopgap plan to supplement weekly jobless pay, the New York Times reported. The Labor Department reported Thursday that new state unemployment claims jumped to 1.1 million last week, a sign that some employers continue to lay off workers in the face of the coronavirus pandemic while others remain reluctant to hire. “It definitely suggests that momentum in the recovery is slowing,” said Scott Anderson, chief economist at Bank of the West. “The labor market is in the I.C.U., and it needs a shot of adrenaline in the form of federal aid.” There are no signs that kind of boost is imminent, however. Nearly 30 million people are drawing unemployment pay in some form, but a $600 weekly supplement to state benefits — credited with keeping millions afloat — expired at the end of July. Democrats and Republicans have been at an impasse on a new round of aid, and no action is expected before September. President Trump bypassed Capitol Hill this month to provide a $300 weekly supplement, drawn from federal disaster funds, to those receiving unemployment pay. But by Thursday, fewer than a quarter of the states had been approved for the program, and only Arizona had put it into action. Florida, New York and Texas have held off on applying as they seek guidance on the program’s rules and mull the technological needs for processing payments. Even states that intend to take part, like Pennsylvania, have raised doubts about whether it is workable. Trump’s executive action caps spending on the program at $44 billion, a figure that officials from the Federal Emergency Management Agency and the Labor Department said yesterday that should be enough to last four to five weeks. The funds are intended to be retroactive to Aug. 1, so recipients might be paid only through early September. The previous $600 weekly benefit, in place for four months, contributed $70 billion a month to the economy, or nearly 5 percent of total household income.

Some Democrats and Republicans have a “real desire” to reach agreement on a smaller coronavirus relief bill that could be worth around $500 billion, a senior Trump administration official said late on Tuesday, Reuters reported. The official said the agreement could include funding for the U.S. Postal Service, additional funding for loans to small- and medium-sized businesses to keep workers on their payrolls and potentially added money for schools. “I think there’s a real desire by some in the Democratic caucus and some in the Republican conference, both in the House and the Senate, to do a smaller deal on the things we can agree upon,” the official said. “It could be about $500 billion.” That amount still falls far short of what Democrats have been seeking in protracted discussions with the administration. U.S. House of Representatives Speaker Nancy Pelosi on Tuesday said Democrats in Congress are willing to cut their relief bill in half to get an agreement on new legislation. The Democratic-led House passed legislation with over $3 trillion in relief in May. Democrats offered this month to reduce that sum by $1 trillion, but the White House rejected it. The two sides remain about $2 trillion apart, with wide gaps on funding for schools, aid to state and local governments, and enhanced unemployment benefits. The senior administration official said while a narrow agreement was possible on some issues, he did not see aid to state and local governments and a fresh round of stimulus checks as possible at the moment.

Gov. Larry Hogan (R) announced yesterday that Maryland has applied for federal aid under President Trump’s recent order to increase unemployment benefits, meaning that workers who lost jobs because of the coronavirus pandemic could see a boost in their weekly aid checks, the Washington Post reported. Hogan said that Maryland has applied for the lost-wage assistance grant from the Federal Emergency Management Agency, which would provide an additional $300 a week to out-of-work residents. During the first months of the pandemic, the federal government provided $600 a week for unemployed workers, in addition to state benefits. But those payments stopped at the end of July. With Congress and the White House deadlocked over a new relief package, Trump called for a $400 weekly boost in payments, with states covering 25 percent of the cost ($100 per person each week) and FEMA providing the rest. The plan was tweaked to allow states to use existing unemployment payments to cover their share after a bipartisan group of governors — whose states are facing massive budget shortfalls due to the pandemic — said they couldn’t afford any additional payments. Under that option, claimants would receive an additional $300 per week.

House Speaker Nancy Pelosi indicated that Democrats might cut their stimulus proposal to seal a deal with Republicans and speed COVID-19 relief, then come back after the November elections with additional agenda items, Bloomberg News. Pelosi said she doesn’t want to wait until the end of September when Congress will be attempting to pass a bill needed from Congress to keep the federal government funded at the start of the new fiscal year on Oct. 1. As for a stimulus package, she said, “We have to try to come to that agreement now.” The speaker also said that “we’re willing to cut our bill in half to meet the needs right now,” though her spokesman Drew Hammill later said that she meant meeting Republicans “halfway, not cutting our bill in half.” The Democratic-controlled House passed a stimulus package worth about $3.5 trillion in May. Senate Republicans offered their own $1 trillion plan at the end of July. But negotiations between Democratic leaders and the White House have been stalled since Aug. 7. Pelosi had previously said Democrats could cut their top-line by $1 trillion if the Republicans moved up by $1 trillion. “We’ll take it up again in January,” Pelosi said yesterday. The Trump administration has advocated a so-called skinny approach, pushing for a smaller package that addresses areas on which both sides agree. A key sticking point so far has been a Democratic call for almost $1 trillion in aid for state and local authorities, which have seen their finances crippled by the economy’s slump into recession. President Donald Trump says the move would reward what he says are poorly run states. Treasury Secretary Steven Mnuchin, one of the two key Republican negotiators along with Chief of Staff Mark Meadows, said earlier Tuesday he hoped to meet with Pelosi later in the week to resume talks. He noted that the House is now scheduled to return to session, to take up funding for the Postal Service, which has become embroiled in a political battle ahead of a November election set to feature unprecedented mail-in balloting. “Since Speaker Pelosi is coming back to look at Postal, hopefully she will be more interested in sitting down,” Mnuchin said on CNBC. The chamber is set to vote on Saturday on adding $25 billion in Postal Service funding.

Libbey Inc., one of the world’s biggest manufacturers of glass tableware, asked the judge overseeing its bankruptcy to allow the company to reject some collective bargaining agreements and cut worker wages by 10 percent, according to a court filing yesterday, Bloomberg News reported. The company’s latest offer to two of its unions, the United Steelworkers and the International Association of Machinists & Aerospace Workers, also includes freezing its defined benefit pension plan for hourly workers. The proposed changes provide cost reductions that are essential to a successful reorganization, the company said yesterday. Libbey expects to emerge from bankruptcy with less than $200 million of funded debt, compared to more than $400 million when it filed for chapter 11 in June, according to the release. The COVID-19 pandemic intensified a burdensome debt load and strained its access to cash.

A wide range of economists are expressing exasperation that Congress would leave town without first finishing work on a new coronavirus relief package they say is critical to the country’s recovery, and to millions depending on help from the government, The Hill reported. More than 28 million Americans on some form of unemployment insurance lost a crucial source of income after a $600 weekly boost to those benefits lapsed last month. Those households now have far less money to cover basic expenses, including rent and home payments they can no longer forgo after the expiration of federal bans on evictions and foreclosures. While it could take weeks to see the effects of the lapse in aid, progressive economists in particular are raising alarms about the potential toll on unemployed Americans and those who depend on them. Lawmakers are feeling little pressure to move from their positions, however. Democrats have offered to reduce the price tag on their legislation from more than $3 trillion to the neighborhood of $2 trillion, but the White House has refused to go higher than $1 trillion. If the lapse in support is having an impact, the first hard evidence may come in the August jobs report. But it won’t be released until Sept. 4. Consumer spending and income data for August won’t come out until Oct. 1. Foreclosures and evictions can also take months to process, but missed rent payments have risen steadily since the start of the pandemic, according to data from insurance company LeaseLock.