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Politics

After Senate vote, massive U.S. coronavirus bill moves to the House

WASHINGTON (Reuters) – The U.S. Senate’s unanimous passage of a $2 trillion coronavirus relief bill sent the unprecedented economic legislation to the House of Representatives, whose Democratic leaders hope to pass it on Friday.

The Republican-led Senate approved the massive bill – which would be the largest fiscal stimulus measure ever passed by Congress – by 96 votes to none late on Wednesday, overcoming bitter partisan negotiations and boosting its chances of passing the Democratic-majority House.

The unanimous vote, a rare departure from bitter partisanship in Washington, underscored how seriously members of Congress are taking the global pandemic as Americans suffer and the medical system reels.

“When there’s a crisis of this magnitude, the private sector cannot solve it,” said Senate Democratic Leader Chuck Schumer.

“Individuals even with bravery and valor are not powerful enough to beat it back. Government is the only force large enough to staunch the bleeding and begin the healing.”

The package is intended to flood the country with cash in a bid to stem the crushing impact on the economy of an intensifying epidemic that has killed more than 900 people in the United States and infected at least 60,000.

It follows two others that became law this month. The money at stake amounts to nearly half of the total $4.7 trillion the U.S. government spends annually.

Republican President Donald Trump, who has promised to sign the bill as soon as it passes the House, expressed his delight on Twitter. “96-0 in the United States Senate. Congratulations AMERICA!” he wrote.

Only two other nations, China and Italy, have more coronavirus cases than the United States. The World Health Organization has warned the United States looks set to become the epicenter of the pandemic.

The House’s Democratic leaders announced that they would have a voice vote on Friday. Speaker Nancy Pelosi said she backed the bill, and was open to passing more legislation if needed to address the crisis in future.

The House Republican leadership is recommending a “yes” vote.

The massive bill, worth more than $2 trillion, includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of families.

The legislation will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

There had been some debate about whether all 430 House members, most of whom have been out of Washington since March 14, would have to return to consider the bill. That would have been difficult, given that at least two have tested positive for coronavirus, a handful of others are in self-quarantine and several states have issued stay-at-home orders.

There are five vacant House seats.

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Politics

U.S. Senate approves big rescue for struggling aviation sector

WASHINGTON/CHICAGO (Reuters) – The U.S. Senate voted late Wednesday 96-0 to give the U.S. aviation industry $58 billion in a coronavirus-rescue package, half in the form of grants to cover some 750,000 employees’ paychecks, in a badly needed lifeline for an industry facing the worst travel downturn in history.

The $2 trillion economic rescue package awards passenger airlines $25 billion in grants and $25 billion in loans, cargo carriers another $8 billion divided between loans and grants, and airport contractors like caterers up to $3 billion in grants. The U.S. House of Representatives is expected to vote to approve the measure Friday and President Donald Trump has promised to sign it into law.

Senate Republicans had fought what they called a give away to airlines and initially offered only loans, while airlines had threatened to start laying off tens of thousands within days if they did not get cash.

“This is not a corporate bailout; it’s a rescue package for workers,” said Association of Flight Attendants Sara Nelson, who spearheaded the idea of direct payroll grants for employees ranging from janitorial staff and gate agents to mechanics and pilots.

Reuters reported Chao worked the phones late into the night talking to air carriers about what they needed to ensure they could maintain payrolls, a person briefed on call on Tuesday that lawmakers were nearing agreement on a deal for cash grants for payroll and other employee costs, after airlines made a last-minute effort to convince lawmakers they needed the cash to prevent furloughing tens of thousands of workers.

U.S. airline shares extended a Tuesday rally on hopes for cash relief and under the bill airlines are set to get cash assistance in as little as two weeks.

Republican Senator Pat Toomey, whose party had proposed $58 billion in loans, said on Wednesday the grants were a key sticking point. He said Democrats insisted “we give away money to airlines and never get it back.”

In a win for labor, companies receiving funds cannot lay off employees before Sept. 30 or change collective bargaining agreements.

The bill has restrictions on stock buybacks, dividends and executive compensation, and allows the government to take equity, warrants or other compensation as part of the rescue package, but does not require it.

Airlines would also receive tax relief on fuel purchases and, in a move that may bring down passenger fares, a temporary suspension on ticket taxes.

As the coronavirus has spread around the world, travel demand has plummeted, with airlines drastically reducing flights and warning of more cuts to come.

Airlines keep canceling flights, borrowing money and slashing costs as demand falls.

Alaska Airlines said Wednesday it would cut its flights by 70% in April and May, while United Airlines said Wednesday would now cut 52% of U.S. flights and overall capacity by 68%. On Tuesday, 279,018 people were screened at all U.S. airport checkpoints, down 87% over last year.

Airlines accepting loans may have to ensure certain air services in order to maintain health care and pharmaceutical supply chains, including to remote communities, but other consumer and environmental protections sought by many Democrats did not make it into the bill.

Airlines and unions won crucial support for the grants from U.S. Transportation Secretary Elaine Chao, who worked the phones late into the night, telling lawmakers and others in the administration she was concerned about the impact of job losses and a decline in the U.S. aviation sector on competition, people briefed on the matter said.

“Without grants, airlines may be forced to choose bankruptcy over federal loans, if loan conditions are too inflexible,” Chao warned in a memo seen by Reuters.

Airlines have argued that they are key to restarting the economy once the coronavirus outbreak subsides.

U.S. airports, whose concourses have been nearly empty, are set to receive $10 billion in grants.

The government will also provide $25 billion in grants for U.S. transit systems and $1 billion for U.S. passenger railroad Amtrak, that have seen ridership fall dramatically as states ordered tens of millions of Americans to stay home and avoid non-essential travel.

Boeing Co could receive government loans under a $17 billion fund set aside for direct national security-related loans, Toomey said, adding that many companies could qualify. Boeing could also qualify under the broader $454 billion loan program.

“It is not meant to be exclusively for Boeing… You should not think of it as a Boeing allocation,” Toomey said.

Boeing had sought at least $60 billion in government loan guarantees for itself and the entire aerospace manufacturing sector. Boeing did not comment on Wednesday.

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World News

U.S. warship sails through Taiwan Strait amid heightened China tensions

TAIPEI (Reuters) – A U.S. warship passed through the sensitive Taiwan Strait on Wednesday, the U.S. and Taiwan militaries said, following heightened tensions between China and Taiwan that has seen Taiwanese air force jets scramble to intercept Chinese fighters.

The ship sailed north through the waterway and was monitored by Taiwan’s armed forces, the island’s defense ministry said in a statement on Thursday.

It described the sailing as an “ordinary mission”, saying there was no cause for alarm.

Anthony Junco, a spokesman for the U.S. Seventh Fleet, said the ship was the guided-missile destroyer USS McCampbell, which conducted “a routine Taiwan Strait transit March 25 (local time) in accordance with international law”.

“The ship’s transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific. The U.S. Navy will continue to fly, sail and operate anywhere international law allows,” he said.

Taiwan is China’s most sensitive territorial and diplomatic issue and Beijing has never ruled out the use of force to bring the island under its control. The narrow Taiwan Strait that separates the island from China is a frequent source of tension.

In recent weeks China’s air force has carried out several exercises close to Taiwan, causing Taiwan’s mostly U.S.-equipped military to scramble fighters to intercept and warn away the Chinese aircraft.

Taiwan has called the Chinese drills provocative and has called on China to pay more attention to fighting the spread of the coronavirus rather than menacing Taiwan.

The United States, like most countries, has no official relations with Taiwan, but is the island’s most important international supporter and main source of arms.

In January another U.S. warship sailed through the Taiwan Strait less than a week after President Tsai Ing-wen won re-election by a landslide on a platform of standing up to China.

Tsai visited a military base on Tuesday and again warned of the threat from China during the virus outbreak.

“Everyone knows that although at present there is an intense epidemic situation, the Chinese Communist’s military aircraft continue to harass Taiwan; their threat to Taiwan and regional security has not gone down,” she said.

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World News

Tempers rise in U.S. Senate as vote nears on $2 trillion coronavirus bill

WASHINGTON (Reuters) – U.S. senators were set to vote on Wednesday on a $2 trillion bipartisan package of legislation to alleviate the devastating economic impact of the coronavirus pandemic, although critics from the right and left threatened to hold up the bill.

Top aides to Republican President Donald Trump and senior Senate Republicans and Democrats said they agreed on the unprecedented stimulus bill in the early hours of Wednesday after five days of talks.

The massive bill includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of U.S. families.

Several Republican senators said the bill needed to be changed to ensure that laid-off workers would not be paid more than they earned on the job.

“This bill pays you more not to work than if you were working,” Republican Senator Lindsey Graham, a Trump ally, told a news conference.

In response, Senator Bernie Sanders, who is running for the Democratic presidential nomination, said he was prepared to block the bill if Republicans do not drop their objections.

That came after leaders of both parties predicted a Wednesday vote.

“Today the Senate will act to help the people of this country weather this storm,” Republican Senate Majority Leader Mitch McConnell said after the chamber convened at noon (1600 GMT).

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Senate Democratic leader Chuck Schumer said his party was willing to pass the bill as quickly as possible.

“Help is on the way. Big help. Quick help,” he said on the Senate floor.

Trump is ready to sign the measure into law, the White House said, but it was unclear how quickly Congress could get the package to his desk. McConnell did not say what time the Senate would hold its vote, and the Democratic-controlled House of Representatives is not expected to act before Thursday.

The package will also include $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

It would be the largest rescue package ever approved by Congress and the third such effort to be passed this month. The money at stake amounts to nearly half of the $4.7 trillion the U.S. government spends annually.

‘DROP IN THE BUCKET’

New York Governor Andrew Cuomo said the $3.8 billion allocated to his state would not cover the tax revenue it stands to lose from reduced economic activity. His state accounts for roughly half of all U.S. coronavirus cases.

“That is a drop in the bucket,” he said at a news conference.

The package aims to flood the U.S. economy with cash in a bid to stem the impact of a pandemic that has killed 812 people in the United States and infected more than 59,200.

The governors of at least 18 states, including New York, have issued stay-at-home directives affecting about half the U.S. population. The sweeping orders are aimed at slowing the pathogen’s spread, but have upended daily life as schools and businesses shutter indefinitely.

On Wall Street, the benchmark S&P 500 .SPX rallied for a second straight day, closing up 1.15%. [nL1N2BI1YH]

Republican Senator Rand Paul, the only senator to vote against an earlier round of emergency virus funding, may be unable to vote after testing positive for COVID-19, the respiratory disease caused by the coronavirus.

It also must pass the House. Speaker Nancy Pelosi, who proposed a more far-reaching rescue package, did not say whether she would support the Senate version.

“We’ll see the bill and see how the Senate votes. So there’s no decision about timing until we see the bill,” she told reporters.

Any changes made by the House would also require Senate approval, which could lead to further delays.

The No. 2 House Democrat, Steny Hoyer, told lawmakers that they would be notified 24 hours before any action.

House members left Washington 10 days ago, but the lower chamber could quickly pass the bill without requiring their return, through a “voice vote” that would require only a few lawmakers to be present.

The top House Republican, Kevin McCarthy, said he would prefer that approach and called for its passage on Friday.

(Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser.)

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Business

S&P 500 rallies for second day as investors await economic aid package

NEW YORK (Reuters) – The S&P 500 rallied for a second straight session on Wednesday as the U.S. Senate appeared to near a vote on a $2 trillion package to support businesses and households devastated by the coronavirus pandemic.

The Dow Jones Industrial Average .DJI rose 482.38 points, or 2.33%, to 21,187.29, the S&P 500 .SPX gained 27.66 points, or 1.13%, to 2,474.99 and the Nasdaq Composite .IXIC dropped 33.56 points, or 0.45%, to 7,384.30.

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U.S. wind, solar industries plead for tax credit 'tweaks' to keep projects alive during virus outbreak

(Reuters) – Wind and solar companies, facing project delays that threaten their ability to tap lucrative green energy subsidies, are pleading with lawmakers for help after not being included in the $2 trillion U.S. coronavirus stimulus package.

Renewable energy groups including the Solar Energy Industries Association and the American Wind Energy Association spent the last week warning that business disruptions related to the coronavirus pandemic could result in the loss of 160,000 jobs if Congress does not extend deadlines here for projects to qualify for sunsetting federal tax credits.

Those requests were not included in the $2 trillion coronavirus aid package expected to be approved by the Senate on Wednesday, after Majority Leader Mitch McConnell lumped the industry’s asks into a list of “unrelated demands” by Democrats that he said were slowing down the legislation.

Green energy companies are hopeful their requests will be included in a subsequent bill that is expected to aid specific sectors, according to Greg Wetstone, president of the industry trade group American Council on Renewable Energy.

Wind and solar companies argue that their challenges are unique because they face strict deadlines for claiming tax credits passed by Congress years ago. The global pandemic will almost certainly cause some projects that had planned to use those credits to miss their opportunity.

“We do not need a bailout,” said Sheldon Kimber, chief executive of solar developer Intersect Power, which has five projects beginning construction in California and Texas this year. Kimber said the industry needs “a handful of definitive tweaks to the tax credits we already get.”

The sector is already experiencing labor stoppages in states like California that are under stay at home orders to help slow spread of the virus. And shipments of supplies of solar panels and other components have been disrupted due to coronavirus lockdown orders in Asia and Europe.

Pattern Energy Group, a major U.S. developer of wind and solar projects, has both sent and received notices of force majeure, Chief Executive Mike Garland said in interview. Force majeure refers to unexpected circumstances that prevent a party to a contract from meeting their obligations.

Developer Invenergy LLC also issued a force majeure notice on its 300 megawatt (MW) Badger Hollow solar project in Wisconsin, according to a regulatory filing, citing the potential impact of factory shutdowns and travel restrictions on its suppliers and contractors. A spokeswoman for Invenergy declined to comment.

8minute Solar Energy halted work on its 50 MW Lotus solar farm in California last week after Governor Gavin Newsom called on residents statewide to stay at home.

About 50 employees had been working on the project, which was expected to be completed in May and will produce power for more than 12,000 households for utility Southern California Edison.

But the California developer is more concerned about their ability to secure financing for early-stage projects during a public health crisis that is giving lenders pause and causing major doubts about companies’ ability to meet tax credit deadlines, said Josh Goldstein, its chief operating officer.

“If that ability to monetize the tax credit goes away, you have gigawatts and gigawatts of projects that were supposed to be built over the next two to three years that are very much in jeopardy,” Goldstein said.

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Politics

U.S. Senate to pass massive coronavirus bill on Wednesday: McConnell

WASHINGTON (Reuters) – The U.S. Senate will move to pass a massive coronavirus bill on Wednesday aimed at providing economic relief for individuals and companies amid the ongoing outbreak, U.S. Senate Majority Leader Mitch McConnell said.

“Today the Senate will act to help the people of this country weather this storm,” McConnell said in remarks on the chamber floor. “This is not even a stimulus package. It is emergency relief.”

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House speaker Pelosi says Democrats will review coronavirus bill

WASHINGTON (Reuters) – House of Representatives Speaker Nancy Pelosi said on Wednesday the coronavirus relief legislation agreed in the U.S. Senate goes a long way toward meeting the needs of the American people and House Democrats will now review the bill.

“This bipartisan legislation takes us a long way down the road in meeting the needs of the American people,” Pelosi said in a statement. “While the compromise does not go as far as our Take Responsibility for Workers and Families Act, thanks to the unity and insistence of Senate and House Democrats, the bill has moved a great deal closer to America’s workers.”

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Business

Senate bill set to give aviation sector up to $33 billion bailout: sources

WASHINGTON/CHICAGO (Reuters) – A compromise $2 trillion economic rescue package that will be voted on by the U.S. Senate on Wednesday is set to give passenger airlines about $25 billion in grants, and up to another $8 billion for cargo carriers and airport contractors like caterers, three people briefed on the negotiations said.

Reuters reported Chao worked the phones late into the night talking to air carriers about what they needed to ensure they could maintain payrolls, a person briefed on call on Tuesday that lawmakers were nearing agreement on a deal for cash grants for payroll and other airline employee costs, after airlines made a last-minute effort to convince lawmakers they needed the cash to prevent the layoff of tens of thousands of workers.

The aid package is expected to include a further $29 billion in loans for airlines, and the government could receive equity, warrants or other compensation as part of the rescue package. U.S. airports are set to receive $10 billion in grants under the agreement.

The final text is still being drafted but will include restrictions on stock buybacks, dividends and executive compensation.

Senate Republicans on Sunday rejected any grants for airlines and instead proposed $58 billion in loans for airlines. Major airlines sounded the alarm and emphasized in recent days that without grants, they had short-term plans to quickly furlough tens of thousands of workers as travel demand collapses amid the coronavirus pandemic.

On Sunday, the carriers promised not to lay off workers through Aug. 31 if they won grants.

Sara Nelson, president of the Association of Flight Attendants said on Twitter it was a “HUGE fight but we WON on this – We got the deal structured around maintaining payroll, no (involuntary) furloughs.”

Airlines and airline unions won crucial support from U.S. Transportation Secretary Elaine Chao, who spoke to lawmakers and others in the administration about the crisis.

In a memo Chao had drafted that was seen by Reuters, she noted that airlines employ 750,000 U.S. workers. She was worried about a dramatic decline in the U.S. aviation sector that could reduce competition, and the potential loss of hundreds of thousands of jobs, people briefed on the matter said.

“Without grant assistance, U.S. airlines have warned that they may be forced to furlough employees or declare bankruptcy,” Chao’s memo warned. “Without grants, airlines may be forced to choose bankruptcy over federal loans, if loan conditions are too inflexible.”

Chao worked the phones late into the night talking to air carriers about what they needed to ensure they could maintain payrolls, said a person briefed on call.

The government will also provide significant funding to Amtrak and U.S. transit systems that have both seen ridership fall dramatically as states order tens of millions of Americans to stay home and avoid non-essential travel.

Boeing Co (BA.N) could also receive government loans or loan guarantees under the bill, but it was not clear if they would tap $17 billion in loan funding set aside for national security-related loans that were part of the Republican bill released on Sunday. Boeing had sought at least $60 billion in government loan guarantees for itself and the entire aerospace manufacturing sector.

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Politics

Negotiators reach agreement on massive U.S. coronavirus response bill: Trump aide

WASHINGTON (Reuters) – U.S. senators and Trump administration officials have reached an agreement on a massive economic stimulus bill to alleviate the economic impact of the coronavirus outbreak, White House official Eric Ueland said early on Wednesday.

“We have a deal,” Ueland told reporters after days of negotiations on a stimulus package expected to be worth $2 trillion.

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