The last must-pass bill of any Congress draws a lobbying crowd. This year — with relief funding from last spring spent; federal aid programs set to expire; and pandemic-fueled shutdowns rolling across the map again — the urgency has spiked for businesses and individuals pushed to the brink.
“If you’re treading water in the open ocean and somebody offers you a life preserver now or a life boat in February, you’re going to take the life preserver,” the National Restaurant Association’s Sean Kennedy says of the $908 billion bipartisan proposal vying for support among Senate Republicans. “That’s what this represents. It’s not as big as anyone wants, but it’s what’s in front of us.”
At the same time, lobbyists trying to demonstrate their clients may not survive a winter downturn without new government support are encountering some lawmakers who have turned a deaf ear to economic alarm bells.
“When a crisis moves into its ninth month, do you still feel it as a crisis? Policymakers are a bit more numb,” says Rich Gold, head of Holland & Knight’s public policy and regulation group. “There’s just an erosion of the power of the narrative over time.”
Nevertheless, aid seekers ranging from market-rattling corporate behemoths to relative mom-and-pop operations are pulling out the stops.
The hotel industry is “pleading” with Congress to approve a package that replenishes PPP funding supplying forgivable loans to small businesses, Brian Crawford, a top lobbyist for the American Hotel and Lodging Association, tells me.
His group — which represents Best Western, Hilton, and Omni Hotels & Resorts, among others — wants the bill once again to guarantee franchisees can access the program. And the industry is pressing for an extension of a program that makes it easier for lenders to offer forbearance on debt payments to struggling operations.
The trade group’s members have generated some 250,000 messages to members of Congress, Crawford says, and those hoteliers with personal relationships have reached out directly. Their message: Occupancy rates are set to drop into the single-digits in some markets over the winter, and without additional help from Washington in the next six moths, 71 percent of the group’s members say they will need to close their doors.
Others are pressing for more PPP funding as well. The restaurant association wants lawmakers to renew the program while making it easier to spend the money on expenses besides payroll, including protective equipment.
CrossFit gym franchises are also pushing for access to the program if it is resupplied — or a dedicated relief fund, according to Gold, who is lobbying for the company. “One would think it’s a legitimate point that if the government is forcing you to shut down, you should be eligible for relief,” he says.
Some industries are lobbying for targeted help.
Beer makers, from small-batch brewers to giants like Molson Coors, want lawmakers to include an extension of a break they first secured in the 2017 tax cut package that trims an excise levy on their product. “In these uncertain times, brewers need more certainty than a one-year extension, which is what we’re operating under now,” Beer Institute president Jim McGreevy tells me. Preserving the break costs $154 million a year, he says.
Airlines are burning through more than that in cash every day as passenger volume tanks by roughly two-thirds, according to the industry. Carriers are hoping to secure another $17 billion in payroll support in the emergency aid package, Reuters’s David Shephardson and Tracy Rucinski report. “A summary of the draft legislation seen by Reuters would provide payroll aid through the end of March, protecting workers and banning share buybacks and dividends and limiting executive compensation during that period.”
Other sectors, eyeing the broader landscape, are eager for lawmakers to put cash back into empty pockets.
The National Retail Federation, for one, is taking the position that the measure should include assistance to individuals, in part because it will “help get the bill across the finish line,” says David French, the National Retail Federation’s senior vice president of government relations. “That means some sort of pandemic bonus is probably necessary, but the right amount is for Capitol Hill to solve.”
The trade group floated industry-specific relief in the past. But French says “based on the reluctance of lawmakers to go big with this package, it will make it harder to get a bill done if individual industries are pushing for specifics.”
As things stand, French described himself as “bullish but realistic” on prospects for the relief package. “There’s a remarkable confluence of interests here” among the incoming and outgoing administrations and the two parties on Capitol Hill. But, he adds, “most of these factors have been aligned since the Cares Act passed, and they haven’t figured it out so far.”
Latest on the federal pandemic response
The House passed a one-week reprieve.
But relief talks remain a mess: “Congressional leaders advanced the short-term extension in federal funding as negotiations over an emergency economic relief package appeared to falter and prospects of a major breakthrough dimmed. The measure passed by a 343-to-67 vote,” Jeff Stein and Mike DeBonis report.
“Appropriators have continued to make progress on a set of spending bills to fund federal agencies, with only a few outstanding policy issues left to be resolved by congressional leaders, aides involved in deliberations say. But talks on the broader stimulus package seemed at risk of breaking down after the White House on Tuesday proposed a relief bill that would offer only minimal benefits to unemployed Americans, a nonstarter for congressional Democrats.”
- First is making sure the government doesn’t shut down: “The short-term spending bill is now expected to quickly move to the Senate, where Majority Leader Mitch McConnell has signaled he will hold a vote ahead of Friday’s deadline. If Trump doesn’t sign the measure into law by midnight on Friday, a government shutdown would commence on Saturday morning.”
The group of bipartisan lawmakers still doesn’t have a relief bill: They did release a six-page summary, but “it left unresolved the two most contentious issues facing lawmakers — aid to state and local governments and protections against coronavirus-related lawsuits for businesses and other entities. Both of these issues have divided Congress for months. House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer backed the initial $908 billion proposal as a starting point for negotiations, but McConnell has rejected the compromise framework.”
- Democrats are dismissing a White House offer that doesn’t include extra unemployment assistance. Instead, it offers a $600 stimulus check to individuals. Treasury Secretary Steven Mnuchin said those payments “would have a bigger impact on reviving the economy than robust unemployment benefits. However, the $600 benefit would offer far less financial relief to millions of Americans who have lost their jobs than the unemployment plan pushed by the bipartisan group.”
Market movers
Stocks fall.
The Dow closed down more than 100 points: “The S&P 500 fell 0.8 percent to 3,672.82. The Nasdaq Composite pulled back by 1.9 percent to close at 12,338.95. Earlier in the session, the Dow was up more than 100 points. All three averages also touched fresh intraday records,” CNBC’s Fred Imbert and Maggie Fitzgerald report.
“Apple was among the worst-performing Dow components, falling more than 2 percent. Salesforce dropped 3.2 percent. The S&P 500 tech sector fell 1.9 percent to lead the index lower. Facebook declined 1.9 percent [after the news broke of the antitrust challenges the social network faces.]”
DoorDash soared in its debut: “Shares rose 85 percent above its IPO price … marking the culmination of a year that has seen delivery companies benefit greatly from skyrocketing demand for their services during the pandemic,” CNN Business’s Sara Ashley O’Brien reports.
“DoorDash opened at $182 per share, valuing the company at around $70 billion, or almost as much as FedEx. The company had priced its stock at $102 per share late Tuesday, up from its original proposed price range of between $75 to $85, a signal of strong investor demand. DoorDash shares finished the day at nearly $190.”
Coronavirus fallout
From the U.S.:
- The deadliest day: “For the first time in the course of the pandemic, the United States reported more than 3,100 deaths in a single day, according to a Washington Post analysis,” Katie Shepherd reports.
- FDA approves at-home covid test: “LabCorp’s Pixel covid-19 Test Home Collection Kit allows people to take a nasal swab at home and mail it back to the company to be analyzed for coronavirus,” Katie Shepherd reports.
- Some landlords are struggling under eviction moratoriums: “With coronavirus cases now rising, the moratorium is likely to stay in place well into 2021, leaving more and more small landlords in a difficult spot. Typically defined as owners with less than 20 units, small landlords are an important source of affordable housing in the city, but typically don’t have the political clout of large developers nor the public sympathy of struggling tenants,” Kyle Swenson reports of landlords in the nation’s capital.
From the corporate front:
- Airlines do away with international change fees: “Delta Air Lines Inc. and United Airlines said that they are scrapping most international change fees for good, joining American Airlines, which made a similar move last month. All three airlines said in August that they would permanently end flight-change fees for domestic flights,” the Wall Street Journal’s Alison Sider reports of early efforts to lure back international travel.
Around the world:
- U.N. secretary general warns of “vaccine nationalism”: “António Guterres said that global leaders need to work together to develop and deploy a vaccine to vulnerable communities and ensure that human rights do not fall by the wayside in pursuit of an end to the pandemic,” Katie Shepherd reports.
- Benjamin Netanyahu wants to be the first Israeli to be vaccinated: “Netanyahu could be the first leader of a country to get a jab against the coronavirus, and his inoculation would come at a time when officials around the world are looking to boost public confidence in several such vaccines, developed on a crash basis,” Steve Hendrix and Shira Rubin report.
- Japan reports new daily record: “Officials in the Hokkaido and Osaka prefectures last month scaled back the government’s controversial ‘Go to Travel’ and ‘Go to Eat’ programs intended to boost the economy by providing subsidies for domestic travel and dining after it was linked to increasing cases. Japan’s central government, which has been keen to revitalize the tourism industry, reluctantly supported that decision,” Katie Shepherd reports.
The transition
Biden picks his USTR.
The president-elect’s choice would get an unusual boost to a Cabinet-level post: “Biden plans to nominate Katherine Tai to be U.S. trade representative … Tai, who has been the chief trade counsel on the House Ways and Means Committee since 2017, is the lead adviser to Democrats and the committee chairman on international trade issues,” Amy B Wang and David J. Lynch report.
“Tai is well regarded by both the moderate and liberal wings of the party and is backed by prominent lawmakers, including Sen. Sherrod Brown (D-Ohio). A group of 10 female House Democrats led by Reps. Suzanne Bonamici (Ore.) and Judy Chu (Calif.) wrote Biden last month backing Tai as ‘uniquely qualified’ for the job. Tai would also be the second Asian American woman to be named to a Cabinet-level position under Biden.”
- She previously spent seven years at USTR attorney specializing in enforcing trade agreements in China: “Tai reportedly impressed many Democrats last December while negotiating with Trump officials for stronger labor provisions in the U.S.-Mexico-Canada Agreement (USMCA).’She impressed the hell out of them in the USMCA negotiations,’ said one person familiar with Tai’s candidacy.”
Will Biden’s eventual SEC pick get a Senate hearing?
We reported on Biden’s shortlist here. Here’s what Sen. Pat Toomey (R-Pa.), the likely next chair of the Senate Banking Committee, told me in a statement about scheduling a hearing for the nominee: “Presidents deserve a degree of deference when it comes to populating the senior-level positions of the executive branch. That said, the confirmation process is a shared responsibility and the Senate has a duty to provide advice and consent. Nominees who are well outside of the political mainstream do not belong in important, senior-level posts. If the incoming administration keeps this in mind when selecting nominees, I think the nomination process can proceed more efficiently.”
- Biden’s defense secretary pick faces questions about business ties: “Raytheon is not retired Gen. Lloyd J. Austin III’s only link to military contractors. He has also been a partner in an investment firm that has been buying small defense firms. And his move from the weapons business to a leadership role in the Pentagon continues a pattern begun by Trump in recent years,” the Times’s Eric Lipton, Kenneth P. Vogel and Michael LaForgia report.
- The investment firm, Pine Island, launched a SPAC that has seen a surge in Wall Street interest. “Since the initial pitch, the SPAC has raised over $218 million,” CNBC’s Brian Schwartz reports. “Records from November indicate that at least two big Wall Street players took ownership stakes in it. The SEC filings show that the investment arm of Citadel, whose CEO is Ken Griffin, took a nearly 7% ownership stake. Millennium Management, founded by longtime business executive Israel Englander, took a more than 5% stake.”
- Hunter Biden confirms he under a federal investigation: “Federal prosecutors have been investigating Hunter Biden, President-elect Joe Biden’s son, to determine if he failed to report income from China-related business deals — a politically explosive probe that is likely to challenge the Justice Department in the incoming administration,” Matt Zapotosky, Devlin Barrett and Colby Itkowitz report.
- Europe seeks a reset: “European leaders plan to use a summit that starts [today] to agree on a sweeping new strategy to rebuild strained relations with the United States, after four years of a divide-and-conquer approach from Trump,” Michael Birnbaum reports.
Money on the Hill
Facebook stares down major antitrust fight.
It is the most significant legal and political threat the social network has ever faced: “The U.S. government and 48 attorneys general filed landmark antitrust lawsuits against Facebook, seeking to break up the social networking giant over charges it engaged in illegal, anti-competitive tactics to buy, bully and kill its rivals,” Tony Romm reports.
“The twin lawsuits filed in federal district court allege that Facebook under its CEO, Mark Zuckerberg, behaved for years as an unlawful monopoly — one that had repeatedly weaponized its vast stores of data, seemingly limitless wealth and savvy corporate muscle to fend off threats and maintain its stature as one of the most widely used social networking services in the world.”
- Facebook’s acquisition of two companies is under scrutiny: “Instagram, a photo-sharing tool, and WhatsApp, a messaging service. Investigators said the purchases ultimately helped Facebook remove potentially potent rivals from the digital marketplace, allowing the tech giant to enrich itself on advertising dollars at the cost of users, who as a result have fewer social networking options at their disposal. Antitrust regulators explicitly asked a court to consider forcing Facebook to sell off Instagram and WhatsApp to remedy their competition concerns. Such a punishment would unwind Zuckerberg’s digital empire and severely constrain Facebook’s ambitions.”
Sen. David Perdue (R-Ga.) sold his house to a finance industry executive.
The sale to a FINRA board governor came as the group was lobbying the Senate. The senator “sold his Washington, D.C., home last year to a brokerage industry official whose organization is under the purview of a committee Perdue sits on,” ProPublica’s Robert Faturechi reports. “The deal was made off market, without the home being listed for sale publicly.
“Though an appraisal provided to ProPublica by the buyer found that Perdue sold for slightly under market value, four local real estate experts disagreed, telling ProPublica that the almost $1.8 million sale price Perdue garnered seemed high… Ultimately, congressional ethics experts said, their concern was that Perdue sold privately and to someone whose organization that he oversaw as a senator.”
Trade fly-around
U.K. decides to suspend Boeing tariffs.
The move left rival AirBus stunned: The decision “exposes a growing rift between the UK and Europe over aerospace investment, industry sources and analysts said,” Reuters’s Tim Hepher and William James report.
“The UK said on it would suspend the tariffs on Jan. 1, describing the move as an attempt to de-escalate a long-running conflict over aircraft subsidies that has dragged the United States and Europe into a tit-for-tat tariff war. The decision comes amid wider trade talks between Britain and the United States and ends a united front on tariffs among Airbus’s political backers Britain, France, Germany and Spain.”
- “Privately, several European trade sources said the surprise UK move marked the most serious cross-Channel split on aerospace in decades. Two of the sources said it was viewed in other capitals as a ‘betrayal’ of Airbus, which has 14,000 UK staff.”
Pocket change
AT&T is fielding offers for DirecTV: “The company has received bids for its DirecTV unit valuing the satellite-TV service at more than $15 billion including debt …,” the WSJ’s Cara Lombardo and Drew FitzGerald report.
“Among those submitting bids above that level were Churchill Capital Corp., a blank-check company run by former banker Michael Klein, and private-equity firm TPG, the people said. Apollo Global Management Inc., long seen by many as the front-runner to buy DirecTV, submitted a bid valuing the business at less than $15 billion … A deal could allow AT&T to deconsolidate DirecTV’s worsening financial results—a major aim of the transaction—while relinquishing control even as it maintains a majority stake in the business.”
McKinsey issues an apology for its role in OxyCotin sales: “Facing mounting pressure about its role in the opioid crisis, McKinsey has taken the unusual step of acknowledging that its work with Purdue Pharma fell short of its standards and vowed a full internal review of its actions, including the possible destruction of documents,” the Times’s Walt Bogdanich and Michael Forsythe report.
“Criticism of the world’s most prestigious consulting firm has intensified since the Times reported last month that McKinsey had discussed ways for Purdue to ‘turbocharge’ sales of its drug OxyContin, proposing that it pay distributors rebates for overdoses linked to the pills they sold.”
The regulators
Supreme Court dubious of Fannie, Freddie shareholder claims.
Investors are suing to challenge the government’s decision to sequester the housing giants’ profits. “They were met with a skeptical reception Wednesday,” Andrew Ackerman and Brent Kendall report. “The case arises from the government’s 2012 decision to channel nearly all of Fannie and Freddie’s profits to the Treasury Department, a bid to reclaim more quickly taxpayer dollars that kept the firms afloat after they were bailed out during the 2008-09 financial crisis.
“Shareholders argued that the profit sweep should be invalidated because the firms’ regulator—the Federal Housing Finance Agency—is structured unconstitutionally, with a single director who holds power that isn’t subject to appropriate checks by the president… Shareholders allege that Fannie and Freddie made $124 billion in overpayments and are asking the Treasury to stop collecting future profits. They also say the companies are entitled to a $29.5 billion credit for future taxes.”
Daybook
- The Labor Department reports weekly jobless claims
- Costco, Dave & Buster’s, Lululemon Athletica and Oracle are among the notable companies reporting their earnings
- The Senate Small Business Committee holds a hearing on the future of PPP
- A Senate Commerce Committee subcommittee holds a hearing on the logistics of vaccine distribution, featuring testimony from top FedEx and UPS officials
- Fed Vice Chair for Supervision Randy Quarles gives a speech on the past, present and future of bank supervision
More Stories
How to Improve Your Credit Score Effectively
How to Create a Budget That Works for You
How to Manage Debt and Build Wealth