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American Airlines warned employees yesterday that it would cut up to 19,000 workers on Oct. 1, saying that there was little sign that the pandemic-induced reluctance to travel was diminishing, the New York Times reported. The airline is looking to cut thousands of flight attendants, pilots, technicians, gate agents and other staff, it said. Including buyouts, retirements and leaves of absence, the company expects to have about 40,000 fewer employees on Oct. 1 than it did before the pandemic, a 30 percent decline in its work force. American is just the latest airline to predict bad news. Earlier this summer, United Airlines said that it could furlough as many as 36,000 employees in the fall. And, on Monday, Delta Air Lines warned that it might have to furlough as many as 1,941 pilots in October, even after nearly as many had accepted buyouts. While weak demand is spurring these announcements, the airlines are also seeking to put pressure on Congress and the Trump administration to strike a deal on another coronavirus stimulus package. Passenger airlines received $25 billion to help pay workers under a March legislative package, with American alone receiving $5.8 billion. Entire sectors, such as live entertainment, hospitality and travel, remain either shut down or severely restricted. And experts warn that the longer the crisis persists, the more lasting the damage will be: Furloughs will turn into permanent job losses, short-term business closures will lead to bankruptcies, and sectors that were relatively insulated from the pandemic will suffer as the public health crisis morphs into a more traditional recession. “This is not a stopgap crisis,” said John Lettieri, president of the Economic Innovation Group, a Washington research organization. “It is a prolonged, deep, far-reaching crisis that is going to challenge the ability of businesses to survive.” Things could get worse in the coming months. Restaurants and other businesses that have been able to shift some operations outdoors will struggle when the weather turns colder. And health experts warn that infections are likely to rise again in the fall and winter. That means businesses have to prepare for the crisis to last well into 2021 — which in many cases will mean further layoffs and cost-cutting.

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.

Federal Reserve officials said at their meeting last month they expected the economy would require greater government support to recover from the coronavirus pandemic, though they didn’t signal at which of their coming meetings they would deploy those tools, the Wall Street Journal reported. Minutes from the Fed’s July 28-29 meeting released yesterday showed officials believed more government spending would be needed to prevent a longer or deeper downturn amid difficulties states have faced suppressing the virus. A number of officials also believed more stimulus from the Fed could be required, the minutes said. With interest rates already cut to near zero, Fed officials could do this by providing more specifics about how long they will keep rates low — including by describing an inflation threshold and various labor market conditions that would warrant withdrawing any stimulus. The minutes didn’t offer strong signals about the timing of such a move, saying only that a number of officials believe more explicit guidance would be “appropriate at some point.” That suggests central bank officials are keeping their options open as they look to forge agreement on how and when to sequence their next moves. The Fed’s next meeting is scheduled for Sept. 15-16, and officials meet again in early November. Officials didn’t announce new policy steps at the conclusion of their July meeting.

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.

House Democrats set a Saturday vote on a bill that would prohibit operational changes to the Postal Service until well after the election and give $25 billion in additional funding to the agency, which has become the focus of a political battle over expanded mail-in voting that Democrats favor amid the pandemic and President Trump has continued to disparage, the Wall Street Journal reported. Democratic lawmakers have also called the leaders of the U.S. Postal Service to testify before Congress next Monday about their concerns over mail delays and cost-cutting moves being made by Louis DeJoy, the new postmaster general and a major Republican donor, amid persistent budget shortfalls. The legislation appears unlikely to be taken up by the Senate, which is on recess until September. “The Postal Service is going to be just fine,” Senate Majority Leader Mitch McConnell (R., Ky.) told reporters on Monday. “We’re going to make sure that the ability to function going into the election is not adversely affected.” Senate Republicans are preparing to unveil in the next 24 hours a pared-down coronavirus aid package expected to cost less than $1 trillion, GOP aides said late Monday. The proposal will include $10 billion for the Postal Service, $300 in weekly federal unemployment benefits through late December, additional funding for the Paycheck Protection Program, liability protections, $29 billion in health funding, including testing and vaccine costs, and education funding, aides said.