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Democratic and White House negotiators resumed discussions over a sweeping coronavirus relief deal Thursday, but gave no indication they were closer to a breakthrough in resolving deep-seated disputes that led President Trump to end the negotiations earlier this week, the Wall Street Journal reported. Few on Capitol Hill were optimistic that Congress and the White House would reach an agreement before the Nov. 3 election. Still, negotiations that had been frozen showed signs of life after House Speaker Nancy Pelosi (D-Calif.) yesterday ruled out moving forward with special support for the battered airline industry without a broader agreement. In a call yesterday afternoon, Treasury Secretary Steven Mnuchin made clear that Trump was interested in reaching an agreement on a broader bill, according to Pelosi’s spokesman, Drew Hammill, and an administration official. The White House has gone back and forth on how broad a deal to pursue. After ruling out more talks on Tuesday afternoon, Trump said Tuesday evening and reiterated in recent days that he would support individual relief bills, including aid for airlines and another round of direct checks. The two sides have been at odds over how much money to spend, as well as how to allocate it. Democrats last week passed a $2.2 trillion bill, down from a $3.5 trillion bill passed in May, while Mnuchin had last week proposed a $1.6 trillion offer. White House spokeswoman Alyssa Farah said yesterday that Trump was interested in legislation that included checks, as well as assistance for small businesses and airlines, but not a larger package. Later, she said the White House was “open to going with something bigger” but not the $2.2 trillion package Democrats proposed. Trump had faced pushback from Republicans who said it was a mistake to abandon efforts to mitigate the health and economic blows of the pandemic, especially on the eve of an election where control of both the White House and Senate are at stake. Pelosi, too, has been under pressure from Democratic lawmakers to remain at the negotiating table, amid signs the labor market recovery is stalling.

President Trump pulled the plug on ongoing bipartisan coronavirus relief talks in an abrupt move that jolted Wall Street and surprised lawmakers of both parties, but hours later called on Congress to approve a bill providing another direct check to many Americans, the Wall Street Journal reported. “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill,” Trump wrote earlier yesterday on Twitter. Trump’s tweets appeared to end the long-running effort between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin to negotiate an agreement on another trillion-dollar-plus coronavirus relief deal. But later yesterday, Trump appeared to backtrack, calling on Congress to approve some additional assistance for airlines and a small-business aid program. He also tweeted that Congress should pass a bill providing another direct check to many Americans. “If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now,” Trump tweeted. Trump also called on Congress to quickly extend $25 billion in new payroll assistance to U.S. passenger airlines furloughing thousands of workers as air travel remains down sharply amid the coronavirus pandemic, according to Reuters. Democrats have largely resisted passing piecemeal bills, pushing instead for an overall agreement. Stocks turned lower yesterday on Trump’s tweets regarding the talks. Read more. (Subscription required.) 

In related news, Federal Reserve Chairman Jerome Powell yesterday reiterated his belief that the U.S. economy needs more fiscal support even though the recovery from the “natural disaster” of the coronavirus pandemic so far has been strong, MarketWatch.com reported. Powell argued in a speech that it was better for Congress to provide too much fiscal support than the reverse. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said. This would lead more businesses to declare bankruptcy and for households to run into severe economic distress. On the other hand, even if policy actions are more than is needed "it will not go to waste,” Powell said. “The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” the Fed chairman said. Read more.

A major bank is attempting to force an Orlando, Fla., company that filed for chapter 11 bankruptcy into paying its Paycheck Protection Program loan in full immediately — despite the company's belief that most of the loan will be forgiven, the Orlando Business Journal reported. Birmingham, Ala.-based Regions Bank said that a $9.3 million PPP loan is to be paid back in full by Winter Park, Fla.-based 1069 Restaurant Group LLC, which controls entities related to roughly 33 Golden Corrals in Florida and Georgia. That's because Regions Bank included a so-called cross-default provision in its PPP loan agreement with 1069 Restaurant Group — meaning that if a borrower defaults on a separate loan with a bank, then the bank can claim that the borrower is in default on the PPP loan, making the loan due immediately. In this case, 1069 Restaurant Group defaulted on its payments for a $49.7 million mortgage, according to court documents, which triggered Regions Bank to say that 1069 Restaurant Group was in default on the restaurant group's PPP loan. 1069 Restaurant Group then voluntarily filed on Oct. 5 for chapter 11 bankruptcy protection. The consequences of how this issue plays out may have implications for thousands of struggling small businesses in Central Florida and nationwide that got help from the $669 billion federal business loan program established during the pandemic.

The four spending bills that Congress passed earlier this year to address the coronavirus crisis amounted to one of the costliest relief efforts in U.S. history, and the undertaking soon won praise across the political spectrum for its size and speed, according to a Washington Post commentary. The $4 trillion total of government grants and loans exceeded the cost of 18 years of war in Afghanistan. “We’re going to win this battle in the very near future,” Senate Majority Leader Mitch McConnell (R-Ky.) said after the Senate approved the CARES Act, the largest of the four measures. Six months later, however, the nation’s coronavirus battle is far from won, and if the prodigious relief spending was supposed to target the neediest and move the country beyond the pandemic, much of the money missed the mark. The legislation bestowed billions in benefits on companies and wealthy individuals largely unscathed by the pandemic, according to a Washington Post analysis, while at the same time allowing special aid for unemployed workers to expire over the summer and leaving some local public health efforts struggling for money to conduct testing and other prevention efforts. The relief packages amounted to a massive economic Band-Aid for what is fundamentally a health crisis, and much of the relief consisted of economic measures similar to those that have worked in previous recessions. But by failing to focus on containing the virus and the particular harms of the pandemic, the relief packages distributed money to those with little need for it while allowing the illness, which is now more widespread than when the bills passed, to outstrip the aid, according to the commentary. Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI. 

Hartford Financial Services Group, The Travelers Cos. Inc. and other insurers won’t have to face a consolidation of hundreds of billions of dollars’ worth of business-interruption claims tied to the COVID-19 outbreak, a group of judges concluded, Bloomberg News reported. Having one judge oversee more than 1,000 cases -- grouped by individual insurers -- would be too cumbersome, and it’s more efficient to have courts around the U.S. decide whether the coronavirus fallout triggered coverage by major insurers such as Hartford, Travelers and Lloyds of London, the legal panel ruled Friday. The group did agree to have a federal judge in Chicago oversee cases against Society Insurance, a smaller carrier. It was the last gasp of plaintiffs’ lawyers attempting to pull together business-interruption cases against major insurers. They’re seeking to recover losses from the economic blows wrought by the virus, which prompted a wave of bankruptcy filings. They argued that having one judge oversee the litigation would cut duplication and hold down legal costs. “Rather than have one judge attempt to organize and resolve the core policy interpretation issues,” having judges already hearing the cases decide whether coverage exists “will result in quicker and more efficient resolution of this litigation,” U.S. District Judge Karen Caldwell, the panel’s chair, said in a nine-page order. Insurers warn that the tidal wave of business-interruption suits could swamp them. Analysts warned this year that the industry could face at least $100 billion in losses from the pandemic, which could wind up being the most in insurance history.

Six months after launching the biggest small business aid initiative in history, Congress is working to extend the Paycheck Protection Program — but with new measures to ensure that the most vulnerable of businesses have a better shot at funding, the <em>Wall Street Journal</em> reported. The PPP initiative delivered more than 5 million loans totaling $525 billion, but was dogged by complaints from many borrowers and small-business groups that it favored sophisticated companies with strong ties to lenders, which issued the loans, over those with weaker financial roots, including many in minority neighborhoods. That disparity played out in how fast companies were able to get loans in the first critical weeks following the program’s April 3 launch, according to a <em>Wall Street Journal</em> review of lending data in the nation’s capital.

House Speaker Nancy Pelosi (D-Calif.) said yesterday that there is no deal yet on a new coronavirus relief package as Democrats wait to see whether the Trump administration will agree to terms, the Washington Post reported. Pelosi spoke a day after President Trump, hospitalized with covid-19, tweeted his support for more stimulus legislation, writing, “WORK TOGETHER AND GET IT DONE.” Pelosi was asked if the president’s comment suggested that a deal was in hand or close. “No, it means that we want to see that they will agree on what we need to do to crush the virus so that we can open the economy and open our schools safely,” Pelosi said. She did not elaborate, but had said on Friday that agreeing on language on how to spend new testing and tracing money remained a sticking point. Democrats have pushed for months for a national testing strategy that the administration never produced. Pelosi also suggested Friday that Trump’s positive diagnosis could change the dynamic and help speed an agreement in the new round of economic relief talks that restarted about a week ago between her and Treasury Secretary Steven Mnuchin. Negotiations continued over the weekend, but there was little sign a breakthrough would be imminent. Pelosi asked airlines on Friday to hold off on impending furloughs of tens of thousands of workers pending a deal. United and American, the major carriers that have threatened furloughs, have said they can reverse them if there is a deal to extend payroll support for the industry that just expired, but Congress must act fast.

Many small-town downtowns experienced something of a revival in recent years, thanks in part to specialty shops and small businesses, the Wall Street Journal reported. They brought much-needed growth to spots that for decades had lost ground to larger cities, shopping malls, big-box stores and, most recently, the internet. How their owners respond to the Covid-19 pandemic will shape the future of Main Streets across the U.S.—and will ultimately help determine how well these towns come out of the resulting economic downturn. “The worry is that what we saw with Covid could set us back at least a generation,” said Patrice Frey, chief executive of the National Main Street Center, a subsidiary of the nonprofit National Trust for Historic Preservation. Between 2015 and 2019, U.S. towns with populations of 25,000 or less invested more than $20 billion in public and private funds in their downtown cores and created more than 28,000 new businesses, according to data collected by the National Main Street Center from roughly 1,000 communities. Over that period the businesses created roughly 106,000 net new full-time and about 25,000 net new part-time jobs.

House Democrats passed a $2.2 trillion coronavirus relief bill Thursday over intense GOP opposition, even as bipartisan talks between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued, the Washington Post, reported. The legislation, which passed 214 to 207, has no chance of advancing in the Republican-led Senate and is opposed by the White House. But it’s been nearly five months since the House passed the $3.4 trillion HEROES Act, which also went nowhere in the Senate. So with the House set to recess Friday through the election, Pelosi (D-Calif.) acceded to demands from moderate Democrats who wanted to take new action to address the toll of the coronavirus pandemic before heading home to campaign for reelection. But even as the highly partisan debate was underway on the House floor, behind the scenes Pelosi was, in fact, working to try to strike a bipartisan deal with Mnuchin. The two spent the day trading phone calls and offers, and although Pelosi said they remained far apart on some issues, the negotiations were continuing and appeared to be getting into some granular details, such as specific language on a coronavirus testing plan, and whether and at what level Republicans could agree to a refundable child tax credit sought by Democrats. Read more. 

In related news, the latest White House coronavirus relief offer, with a $1.6 trillion price tag, received a cool reception yesterday from congressional Republicans, The Hill reported. 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 by criticizing the inclusion of a $400 per week federal unemployment benefit. Read more.

The Treasury Department and Small Business Administration have not yet forgiven any of the 5.2 million emergency coronavirus loans issued to small businesses and need to do more to combat fraud, government watchdogs told Congress yesterday, the Washington Post reported. Small businesses that received Paycheck Protection Program funds, as well as their banks, have been frustrated by the difficulty in applying for loans to be forgiven, despite rules saying that if the funds are spent mostly on payroll they will not need to be paid back. SBA announced last week that it had received only 96,000 loan applications — less than 2 percent of the total number of loans — and has not processed any applications so far. Treasury and SBA officials have said they plan to begin considering applications shortly. SBA officials say they opened the system for forgiveness Aug. 10, two days after the program closed. The agency has 90 days to consider each application after it receives bank approval, according to the CARES Act. The agencies also need to do much more to prevent fraud, according to two watchdogs who testified at a House hearing Thursday. The SBA Inspector General’s office has received tens of thousands of fraud tips, and federal officials have launched hundreds of investigations into allegations of people creating fake businesses and stealing identities to fraudulently obtain SBA funds.