The newest twist in the talks appears to be fast-tracking negotiations to aid the airline industry but shelving the prospects broader unemployment aid, another round of $1,200 relief checks to millions of Americans, small business assistance, and a number of other programs.
Still, after sinking on Tuesday, the stock market rallied sharply Wednesday on the prospect of a partial deal. The Dow Jones industrial average closed up more than 500 points, or nearly 2 percent. Airline stocks fared even better, with American Airlines and United Airlines seeing their share prices up more than 4 percent.
The herky jerky nature of the economic relief talks have played out over months, as the White House and Democrats have failed to agree on a broader support package. The economy showed some signs of recovery over the summer but not it appears pockets are softening again, with the travel industry last week announcing a spate of layoffs and the labor market remaining stubbornly weak while the coronavirus pandemic remains a factor in many parts of the country.
President Trump and Pelosi exchanged insults again on Wednesday, a sign that the broader relief talks are unlikely to be revived. But both sides did appear interested in trying to work out some sort of immediate aid for the airline industry, which has seen a dramatic drop in traffic since earlier this year. Last week, American and United began furloughing more than 30,000 employees.
Mnuchin’s outreach came amid a growing backlash from Republicans running for reelection who questioned – and in some cases denounced – Trump’s decision to end negotiations between Mnuchin and Pelosi on a broader relief package. Trump had announced Tuesday that he was asking Senate Majority Leader Mitch McConnell (R-Ky.) to focus on confirming Amy Coney Barrett to the Supreme Court instead — a decision McConnell said he supported.
Pelosi last week urged airlines to hold off on the layoffs, saying she would renew a payroll support program either as a stand-alone bill or part of a broader deal.
Rep. Peter A. DeFazio (D-Ore.) tried Friday to advance a $28 billion bill to help airlines keep workers on payroll, under a procedure that would have required unanimous consent from all lawmakers. Republicans blocked the move.
Senate Republicans have pushed a package of similar size for the airlines that has less stringent requirements on how the aid will be used. It’s unclear if Pelosi and Mnuchin could come up with a deal on airlines that both parties would support, especially after Tuesday’s bizarre events that began when Trump suddenly announced on Twitter that “I have instructed my representatives to stop negotiating until after the election.”
The backlash was swift. Seven hours after Trump said talks were terminated, he appeared to reverse himself in a new string of tweets.
At 9:54 p.m. Eastern time, he called on the House and Senate to “IMMEDIATELY” approve $25 billion in new aid for the airline industry, which has already begun laying off thousands of employees after federal aid programs