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I lost track of whether the stimulus bill was on, off, was just for the airlines, included checks for $1200, and then Mitch weighed in and said no stimulus before the election.

Mnuchin and Powell were seen on a park bench in DC Friday afternoon sharing a bottle of Ripple wine.

No Relief in Sight

Oct. 7, 2020

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Let’s call the whole thing off?
Hours after the Fed chairman, Jay Powell, warned that the U.S. economy would face “tragic” consequences without more government spending, President Trump cut off stimulus talks. In a series of tweets that rattled the markets yesterday afternoon, Mr. Trump ordered negotiations over another trillion-dollar package to halt until after the election.

What’s the strategy? Mr. Trump said that Republicans should instead focus on confirming Judge Amy Coney Barrett to the Supreme Court. More than 70 percent of voters supported more stimulus in a recent poll, making the political rationale for his move unclear. Although Democrats and Republicans were edging closer to an agreement to spend around $1.6 trillion, they remain far apart on the details, with Democrats pushing for significant aid for state governments and Republicans worrying about the effect on the national debt.

• Mr. Trump later appeared to backtrack somewhat, calling for specific measures to fund airlines, extend more rescue loans for small business and send another batch of stimulus checks to taxpayers. Democrats previously resisted this “skinny” approach to stimulus, insisting on a more comprehensive bill.

Mr. Trump’s back and forth may be a negotiating tactic. The market drop after his rejection of talks could be a gambit to focus minds on what’s at stake. (His comments supporting specific stimulus measures came after the markets closed.) Until a deal is reached, here is who is left in limbo:

• Airlines and hotels. An estimated 948,000 workers in the travel and tourism industry will lose their jobs without more stimulus, according to data from Tourism Economics for the U.S. Travel Association. That’s on top of the 3.5 million jobs the industry has already lost.

• Restaurants. A poll last month found that 40 percent of restaurant owners expected to close their establishments within six months in the absence of government aid. Three million restaurant employees have already lost their jobs.

• State and local governments. More than four million public-sector jobs could be lost as state houses and municipalities make cuts to compensate for drops in tax revenues, according to Moody’s.

• Unemployed people. Temporary layoffs are becoming permanent job losses, the latest data shows, with more than seven million people out of work for at least 15 weeks. A large share have relied on stimulus and extra unemployment insurance to pay mortgages and rent, according to Deloitte, risking wider financial reverberations as savings dwindle. “We had a bridge which took us till about September” said Raghuram Rajan, a former chief economist of the I.M.F. Without more help, he said, “anybody who was on that bridge falls off a cliff.”

• The U.S. economy. “It’s simple: Less fiscal stimulus means more economic pain,” Gregory Daco of Oxford Economics wrote in a research note. The absence of additional fiscal aid could reduce economic output 1.5 percent over the next year, he estimated.

What they’re saying:

• “We need to concentrate on what’s achievable,” said Senator Mitch McConnell, the majority leader.

• “Today, once again, President Trump showed his true colors: putting himself first at the expense of the country, with the full complicity of the G.O.P. members of Congress,” House Speaker Nancy Pelosi said.

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• “Washington’s failure to enact additional Covid relief will be felt on Main Streets and at kitchen tables across the United States,” said a representative for the Chamber of Commerce. “Failure to reach a deal on additional relief would worsen and prolong the crisis for our country,” added the Business Roundtable.

The markets are … up? Stock futures suggest that markets today will regain some of yesterday’s losses. That suggests that investors and analysts still believe a deal is in the offing, either under Mr. Trump or Joe Biden, however unclear the path to an agreement.

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Today’s DealBook Briefing was written by Andrew Ross Sorkin and Lauren Hirsch in New York, Ephrat Livni in Washington and Michael J. de la Merced and Jason Karaian in London.

https://www.nytimes.com/2020/10/07/business/dealbook/stimulus-talks-trump.html