Trump ends stimulus talks and sows airline payroll support confusion

Ella Castle

Hours after President Trump tweeted that he would suspend pandemic stimulus negotiations until after the election, the president and his administration appeared to reverse course, sowing confusion among politicians and workers. Left in the balance: millions of Americans who have lost their jobs, including more than 32,000 airline workers. As […]

  • Hours after President Trump tweeted that he would suspend pandemic stimulus negotiations until after the election, the president and his administration appeared to reverse course, sowing confusion among politicians and workers.
  • Left in the balance: millions of Americans who have lost their jobs, including more than 32,000 airline workers.
  • As negotiations break down over a larger stimulus package, a standalone airline package could be the next attempt.
  • Visit Business Insider’s homepage for more stories.

Hours after President Trump said on Tuesday that he would refuse to negotiate toward passing a new stimulus package until after the November 3 election, he reversed course, tweeting that Congress should pass individual stimulus measures intended to help some sectors amid the pandemic, including the airline industry.

The reversal, along with mixed messaging on Wednesday morning’s cable news shows, represented the latest confusion, miscommunication, and legislative hurdles as the coronavirus pandemic continues to ravage employment and vast sectors of the economy. 

About 948,000 travel and tourism workers will lose their jobs without more stimulus funds, according to the US Travel Association. Among them are 32,000 airline workers who have been furloughed since CARES Act Payroll Support  requirements expired on October 1, and tens of thousands more who have taken unpaid leaves of absence to try to mitigate furloughs. Thousands of additional job cuts are expected, with Delta planning to furlough nearly 2,000 pilots in November, and Southwest warning of the first job cuts in its history for next year.

Worker unions and industry groups have expressed frustration over inconsistent messaging from the White House and the delay in passing a new stimulus.

“We are disappointed that negotiations between Congress and the Administration over additional COVID-19 relief were suddenly suspended yesterday,” a number of airline worker unions wrote in a joint letter to Congress on Wednesday.

“We call on leaders to resolve any procedural issues and proceed as quickly as possible to extend the PSP in time to preserve this extremely effective and efficient jobs and infrastructure program,” the unions added.

Sara Nelson, president of the Association of Flight Attendants-CWA, urged political leaders to reach some kind of compromise.

“An overwhelming majority of both chambers of Congress and both political parties have been in support of extending the Payroll Support Program for two months,” Nelson wrote Wednesday night. “Only Congress can appropriate those funds and secure the jobs and infrastructure our country needs.”

The Payroll Support Program was meant to be aid for airline workers — not for the airlines themselves

The $25 billion Payroll Support Program (PSP) under the CARES Act was designed as a jobs program, or essentially aid to workers who would otherwise end up on the unemployment rolls, labor groups have said. Money was given to the airlines, which distributed it to workers through normal payroll systems.

In exchange for the payroll aid and other loans, airlines agreed to not furlough or lay off workers through at least September 30. (Other conditions included prohibitions on stock buybacks and shareholder dividends, as well as caps on executive pay.)

With travel demand still down 70% from 2019 levels and a recovery stalled by ongoing COVID-19 outbreaks across the US, workers and unions have argued that the PSP should be extended by six months. Although airlines expect that they will need to be smaller for three to five years until demand fully recovers, unions argue that airline workers can’t be expected to find other jobs with hiring across industries still severely depressed.

Passing a piecemeal stimulus package

Congress had previously cited October 1 — the day that PSP funds expired — as a deadline to pass a second broad stimulus. With that target a week in the past, legislators and the president now appear to be considering a standalone aid package for the airline industry, as well as other sectors. 

After the President said on Tuesday that he was ending stimulus discussions until after the election, administration officials reversed course.

White House Chief of Staff Mark Meadows told reporters on Wednesday that Trump had discussed standalone aid for airlines with Treasury Secretary Steven Mnuchin, as well as standalone packages giving stimulus checks to Americans and offering aid to small businesses.

House Democrats, led by House Transportation Chairman Peter DeFazio (D-OR) had tried to push a standalone airline support bill on the House floor on Friday, but were blocked by Republican objections.

House Speaker Nancy Pelosi and other congressional Democrats have previously opposed piecemeal stimulus packages, arguing that they would not be enough to meet the economy’s needs during the pandemic.

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