Low-income U.S. households are spending savings quicker than high earners: study

By Jonnelle Marte

(Reuters) – U.S. households across the board built up savings during the pandemic, but low-income households are burning through their cash more quickly than higher-income families and could be out of savings soon if more aid is not delivered, according to a study released on Wednesday.

By the end of October, the median low-income family spent 64% of the extra cash they accumulated this year compared with last year, leaving them with about $236 in extra cash, according to a report released Wednesday by the JPMorgan Chase Institute. In contrast, higher-income households lost just 38% of the cash cushion built up this year, and had a median $810 in savings, the study found.

“If these trends continue, we would expect low-income families to deplete their account balance gains sooner than their high-earning counterparts,” researchers noted in the report.

The JPMorgan Chase study showed that cash balances appeared steady on average after rising earlier this year, in line with a separate report released by the Federal Reserve last week showing that balances in cash, checking accounts and savings deposits rose over the three months ending in September to a record $13.4 trillion.

But a look at cash balances for the median household – which is not affected as much by households with abnormally high, or unusually low, account balances – showed a more volatile experience.

The median cash balance for checking account holders studied by JPMorgan Chase rose in the spring when the government distributed cash payments to most households – and balances have been declining since.

Those households could experience another substantial drop in income and spending at the end of the year when unemployment benefits are set to expire for millions of workers participating in pandemic programs created by the CARES Act, the researchers said.

Consumers have previously cut spending on non-durable goods by 12% after losing unemployment benefits, and those receiving jobless benefits reduced spending by 14% over the summer after a $600 weekly supplement to unemployment benefits expired at the end of July, the study noted.

Lawmakers have yet to reach an agreement on another round of aid. Some COVID-19 relief measures could be attached to a critical spending measure that must be passed by Friday to avoid a federal government shutdown.

(Reporting by Jonnelle Marte in New York; Editing by Matthew Lewis)

U.S. Senate passes, sends to Trump, one-week extension of government funding

WASHINGTON (Reuters) – The U.S. Senate on Friday unanimously approved a one-week extension of federal funding to avoid a government shutdown this weekend and to provide more time for separate negotiations on COVID-19 relief and an overarching spending bill.

With the Senate’s vote the measure now goes to President Donald Trump for signing into law.

(Reporting by Richard Cowan and David Morgan)

U.S. Congress eyes stopgap funding as COVID-19 relief, spending talks continue

By David Morgan

WASHINGTON (Reuters) -The U.S. Congress is likely to consider a one-week stopgap funding bill to provide more time for lawmakers to hammer out agreements in talks aimed at delivering COVID-19 relief and an overarching spending bill to avoid a government shutdown, Democratic aides said on Monday.

Lawmakers in the Republican-led Senate and Democratic-run House of Representatives need to enact a funding measure by Friday, when current funding for federal agencies is set to expire. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell hope to attach long-awaited COVID-19 relief to a broad $1.4 trillion spending bill.

But separate negotiations on coronavirus aid and government funding have yet to produce agreement, making it likely that Congress will vote on a stopgap funding measure, known as a continuing resolution, to allow an additional week of talks, two House Democratic aides said, speaking on condition of anonymity.

A bipartisan effort to deliver an infusion of COVID-19 relief to U.S. families and businesses remained hung up on Monday over provisions to help state and local governments, which Democrats want, and protect businesses from coronavirus-related lawsuits, a top Republican priority.

A group of House and Senate lawmakers had been expected as early as Monday to roll out the formal text of a $908 billion bill to blunt the health and economic impact of the coronavirus pandemic.

The U.S. Chamber of Commerce said in a new memo to Congress that failure to enact relief would risk a “double-dip recession” – which occurs when a recession is followed by a brief recovery and then another recession – that would permanently shutter small businesses and leave millions of Americans with no means of support.

But after lawmakers and their staff worked through the weekend to finalize the package, congressional aides said there was still no agreement.

The same issues have blocked coronavirus relief legislation for months, leading to mounting frustrations toward Congress among business owners, unions, state and local government officials and ordinary Americans.

Considering the weakening of the economy coupled with a surge in COVID-19 cases at a time when previously approved relief mechanisms are due to expire, it would be “stupidity on steroids if Congress doesn’t act,” Democratic Senator Mark Warner, a member of the bipartisan group that wrote the proposal, told CNN’s “State of the Union” on Sunday.

Lawmakers enacted $3 trillion in aid earlier this year but have not been able to agree on fresh relief since April.

A group of emergency aid programs implemented in response to the pandemic, including additional unemployment benefits and a moratorium on renter evictions, is set to expire at the end of December.

With U.S. coronavirus deaths topping 282,000 and pressure mounting for aid to a fragile economy, lawmakers and their staff worked through the weekend to put the finishing touches on the COVID-19 package intended to help those facing the greatest need, according to Senate Republican aides.

It would set new emergency assistance for small businesses, unemployed people, airlines and other industries during the pandemic. But lawmakers have opted not to include stimulus checks to individuals out of concern that a higher price tag could delay passage.

A framework for the bipartisan bill, unveiled earlier by the group of House and Senate lawmakers, has support from moderates and conservatives.

McConnell, who has pushed to limit spending to $500 billion, circulated a list of “targeted” relief provisions to Senate Republicans last week that he said President Donald Trump would sign. White House officials have also said that Trump favors a targeted measure.

(Reporting by David Morgan and Susan Cornwell; Additional reporting by David Lawder, Sarah N. Lynch and Jan Wolfe; Editing by Scott Malone and Will Dunham)

Georgia Democrats Ossoff, Warnock challenge Republicans to debate in Senate runoff

By Susan Cornwell and David Morgan

WASHINGTON (Reuters) – Democratic candidates in a pair of U.S. Senate runoff races in Georgia on Monday challenged the two incumbent Republican senators to debates ahead of a Jan. 5 vote that will decide control of the Senate.

Democrat Jon Ossoff said he had accepted invitations from six media outlets to debates, and urged Republican rival Senator David Perdue to join him in the forums. He had already called Perdue a “coward” on Twitter Sunday following media reports that Perdue had declined a chance to debate on Dec. 6 at the Atlanta Press Club.

Likewise, Democrat Raphael Warnock issued a separate challenge to Republican Kelly Loeffler to three televised debates, including one at the Atlanta Press Club, also on Dec. 6.

Georgia laws require a runoff if no candidate reaches 50 percent. The Ossoff-Perdue race and the Warnock-Loeffler matchup will determine whether Republicans or Democrats lead the Senate after Democratic President-elect Joe Biden takes office.

Democrats need to win both seats to split the Senate 50-50 and give Vice President-elect Kamala Harris the tie-breaking vote. Georgia has not elected a Democratic senator since 1996, but Democratic President-elect Joe Biden narrowly leads President Donald Trump there by 49.5% to 49.2% in the recent presidential election. A recount is underway.

Perdue campaign manager Ben Fry said in a statement that there had already been two debates in the Georgia Senate race, before the first round of voting Nov. 3.

“In each (debate), Ossoff lied repeatedly … If Ossoff wants to keep lying to Georgians on TV, he will have to use his out-of-state money to pay for it,” Fry said.

There was no immediate response from Loeffler’s campaign.

Ossoff and Warnock appeared together on Sunday for the first time in the runoff campaign, urging voters to head back to the polls just two months after the presidential election. Both men have sustained attacks from their Republican opponents, and the Democrats are expected to step up their joint campaign efforts.

Their campaigns are emphasizing healthcare, COVID-19 relief and Republicans’ response to the pandemic. Perdue and Loeffler’s campaigns meanwhile accuse Warnock and Ossoff of pursuing “socialist” policies on climate change and healthcare.

At the Sunday event in Marietta, Ossoff called out Perdue for declining the Atlanta Press Club debate. “Imagine being a sitting U.S. Senator, too much of a coward to debate your opponent in public,” Ossoff declared.

Warnock, meanwhile, stressed the importance of voters returning to the polls a second time to support the Democrats, saying he had talked to a woman who voted for him on Nov. 3 and “she had no idea that she had to go back again.”

The Atlanta Press Club said in a statement that Perdue had declined to participate in the Dec. 6 debate, but Ossoff confirmed that, “we will proceed with the debate and Sen. Perdue will be represented by an empty podium.”

(Reporting by Susan Cornwell and David Morgan; Editing by Scott Malone and Aurora Ellis)

U.S. airlines urge relief as White House signals possible piecemeal aid

By Tracy Rucinski

CHICAGO (Reuters) – U.S. airlines urged top lawmakers on Wednesday to advance a standalone bill that would extend $25 billion in payroll support through March, as the Trump administration signaled possible piecemeal legislation a day after walking away from broad COVID-19 relief talks.

“We are disappointed that negotiations between Congress and the Administration over additional COVID-19 relief were suddenly suspended yesterday,” Airlines for America, the main industry trade group, and a dozen airline unions wrote in a letter on Wednesday seen by Reuters.

“Now, in the absence of an overall COVID-19 relief package, we urge you to advance standalone legislation to extend the PSP (payroll support program),” it said.

The letter was sent to House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy and Senate Minority Leader Chuck Schumer.

Earlier, White House chief of staff, Mark Meadows, told reporters that stimulus talks were off but that negotiators were looking at standalone bills on 10 things that “we agree on.”

The idea of airline relief has so far enjoyed broad bipartisan support in Washington, though last week Representative Peter DeFazio, chair of the House Transportation and Infrastructure Committee, failed to win approval of a standalone bipartisan measure for airlines under unanimous consent after some Republicans objected.

Airline shares jumped on Wednesday after sinking suddenly a day earlier on remarks by President Donald Trump that his administration would abandon talks with congressional Democrats over proposals to spend at least $1.6 trillion in additional coronavirus relief funds.

(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama and Bernadette Baum)

Pelosi says agreement on U.S. airline payroll assistance ‘imminent’

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) – House Speaker Nancy Pelosi said Friday that agreement was “imminent” on a deal to provide another $25 billion in government assistance to keep tens of thousands of airline workers on the job for another six months.

Pelosi said the House will either pass “bipartisan stand-alone legislation or achieve this as part of a comprehensive negotiated relief bill.” She called on airlines to hold off on furloughs and firings “as an agreement for relief for airline workers is being reached.”

Airline stocks jumped on the news.

Congressional aides expected the House to pass a standalone measure to aid airlines later on Friday that the Senate could take up next week if a broader coronavirus deal is not reached.

Senate aides said Thursday that only a single Republican senator had been holding up the new bailout from being approved in the U.S. Senate.

Congress in March approved a $50 billion bailout for the passenger airline industry, with $25 billion in mostly cash grants to fund payroll costs with the condition that they not eliminate jobs before Oct. 1. It also included $25 billion in government loans.

American Airlines and United Airlines began laying off 32,000 workers on Wednesday after a deadline passed with no new help from Washington, but told staff they would reverse this if lawmakers reach a deal on COVID-19 relief.

U.S. airlines are collectively burning about $5 billion of cash a month as passenger traffic has stalled at around 30% of 2019 levels. After tapping capital markets, they say they have enough liquidity to last them at least 12 months at that rate.

They have argued for another $25 billion in federal payroll aid to maintain their workforce and meet demand as the economy rebounds. Without the money, flight networks could further shrink, hampering their revenue power and shortening their liquidity runway.

(Reporting by David Shepardson and Tracy Rucinski; Editing by David Gregorio)