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In Killing Stimulus Talks, Trump Invites Political Risk for Himself and Republicans

WASHINGTON — President Trump’s decision to virtually storm away from bipartisan talks over a coronavirus aid bill less than a month before Election Day was a remarkably perilous act for a president about to face voters and for Republicans who are fighting to keep the Senate and now risk being blamed for the collapse of a compromise that had always faced steep obstacles.

Vulnerable Republicans were alarmed at what one of them, Senator Susan Collins of Maine, called a “huge mistake.” Democrats seized on the president’s move to accuse Mr. Trump of callous disregard for Americans struggling amid the pandemic. And by Tuesday night, Mr. Trump himself took to Twitter to try to walk back his own decision to kill the negotiations, suggesting that he might support narrower stimulus measures.

But such bare-bones plans have been rejected by Democrats and Republicans alike, and there was little reason to believe they would be successful now. If that holds, there will be no comprehensive plan to provide jobless aid or stimulus checks to Americans, furnish aid to small businesses and airlines, or send federal support to state and local governments, at least for now. The economic recovery will continue to shudder, and Mr. Trump will have left little ambiguity about how a plan to stabilize it finally fell apart.

“Trump made this really easy for Democrats,” said Tony Fratto, a former aide to President George W. Bush, who is now a partner at Hamilton Place Strategies in Washington. “Republicans can try to explain that the blame is on Democrats. Democrats only have to hold up Trump’s tweet, taking the blame himself.”

Former Vice President Joseph R. Biden Jr., the Democratic presidential nominee, did just that on Tuesday evening, in his own Twitter post that said, “Make no mistake: if you are out of work, if your business is closed, if your child’s school is shut down, if you are seeing layoffs in your community, Donald Trump decided today that none of that matters to him.”

Even as Republicans publicly blamed Speaker Nancy Pelosi for the breakdown, saying she had been unwilling to compromise, multiple aides privately likened the president’s tweets to his 2018 declaration that he would be “proud to shut down the government for border security.” His words at the time effectively handed Democrats political cover for the historic lapse in government funding that would follow, and top Republican officials feared that they could have the same effect now, with voters already casting ballots.

In an interview on ABC’s “The View” on Wednesday, Ms. Pelosi said Mr. Trump’s blitz of follow-up tweets calling for tailored aid measures was evidence that he had seen the political downside of ending negotiations, saying the president was “rebounding from a terrible mistake that he made yesterday, and the Republicans in Congress are going down the drain with him on that.”

Compounding the political risk, Mr. Trump said the halt in stimulus negotiations would give Republicans time to focus on quickly confirming his Supreme Court nominee, Judge Amy Coney Barrett, a move that polls have shown is unpopular with voters. By contrast, Americans are overwhelmingly in favor of another stimulus bill.

“This is going to make it very hard for him to make the case that he’s doing all he can to pull the nation out of economic malaise,” Mr. Fratto said.

Mr. Trump vowed that a recovery plan would pass “immediately after I win,” but there was little indication that the powerful political disincentives that have so far stymied efforts to strike a bipartisan deal would dissipate in the lame-duck session that bridges the weeks between Election Day and the start of a new Congress in January. The election outcome, aides and lawmakers warned, could in fact deepen the intransigence on both sides, further delaying relief to Americans.

For months, even as the economic need grew and the contours of a compromise became clear, political forces have conspired to thwart a stimulus deal. Republicans who feared Mr. Trump was headed for defeat in November began polishing their fiscally conservative credentials in anticipation of future campaigns, including the 2024 presidential race, by asserting their opposition to another costly aid plan. By staying out of the talks early and remaining disengaged at key moments, Mr. Trump confounded many in his own party by failing to push Republicans to cut a deal, a detachment that only grew after he signed executive orders in August that attempted to bypass Congress to deliver some relief.

And Democrats, sensing mounting Republican political vulnerability, have been unwilling to make many concessions — which could provide a potential political lifeline to Mr. Trump and his party — when they believe an electoral sweep for their party in November could allow them to push through a far more generous bill after Election Day. Top Democrats believe that voters increasingly see Mr. Trump as a “chaos” president, and that a last-minute agreement could temper that perception.

“Their political positions are far apart, and their polling, which is being done daily, says they’re not being punished for not doing a deal,” Douglas Holtz-Eakin, a former head of the Congressional Budget Office who runs the conservative think tank American Action Forum and remains close to many Republicans in Congress, said last week. “The minute that changes, they’ll shift.”

The elements of an agreement have been obvious for some time: a price tag somewhere around $2 trillion, including extended aid of around $400 a week for the unemployed, additional support for small businesses and direct payments to low- and medium-income households, liability protections for businesses and workers, and more money for schools, state and local governments and coronavirus testing.

Democrats had started negotiations north of $3 trillion, with a bill that passed the House in May. Senator Mitch McConnell, Republican of Kentucky and the majority leader, waited until midsummer to present his party’s $1 trillion plan, but has since scaled down his offer considerably, to $350 billion, even as the Trump administration was reaching for a much larger package. Mr. Trump has been a disruptive force in the negotiations, never making clear what he wanted and by turns cheering on the talks and moving to blow them up.

As recently as Saturday, he had called for an agreement, tweeting that, “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE.”

Credit…Anna Moneymaker for The New York Times

Along the way, deep divisions were exposed in both parties. Vulnerable Senate Republicans desperate to show voters they can work across party lines to address urgent needs have pressed for a deal. But most Republicans made it plain that they had bailout fatigue and would not be willing to embrace a large aid package.

“It became very obvious over the last couple of days that a comprehensive bill was just going to get to a point where it didn’t have really much Republican support at all,” said Mark Meadows, the White House chief of staff. “It was more of a Democrat-led bill, which would have been problematic, more so in the Senate than in the House.”

Jason Furman, a former top economist for President Barack Obama, had recently begun pushing for Democrats to accept an offer by Treasury Secretary Steven Mnuchin, the lead White House negotiator, of a $1.6 trillion package, stressing the potential harm to people and businesses if the economy went months without more stimulus.

“I’m disappointed that policymakers haven’t come together more quickly, because time really matters here,” Mr. Furman said in an interview. “It matters for schools. It matters for families. It matters for testing to control the spread of the virus.”

Business groups pressured congressional leaders on both sides to compromise, to little avail.

Several analysts blamed the relative stability of stock markets in recent months for undermining urgency for another package, a sentiment Mr. Trump seemed to reflect in his Twitter posts on Tuesday. “Our Economy is doing very well,” he wrote. “The Stock Market is at record levels.”

After Mr. Trump’s posts withdrawing from negotiations, the S&P 500 dropped. On Wednesday morning, it rose again, on what analysts speculated was hope that Mr. Trump’s latest Twitter posts might revive the stimulus talks.

Carl Hulse and Luke Broadwater contributed reporting.

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Jobs Report Shows Further Slowdown in U.S. Economic Recovery

Six months after the coronavirus pandemic tore a hole in the U.S. economy, the once-promising recovery is stalling, leaving millions out of work, and threatening to push millions more — particularly women — out of the labor force entirely.

The latest evidence came Friday, when the Labor Department reported that employers added 661,000 jobs in September, far fewer than forecasters expected.

It was the third straight month of slowing job growth, a worrying trend given the scale of the challenge ahead. The economy has nearly 11 million fewer jobs than it did before the pandemic, a bigger loss than the 8.7 million at the depth of the recession a decade ago.

Economists said the report underscored the need for more federal help. “It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the fall,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “This is a red flag. We need aid now.”

The September slowdown was partly a result of public-sector job losses, particularly in school districts, where payrolls fell by more than 200,000. Economists said some of those jobs would come back if more schools opened for in-person instruction. But further cuts could be looming as state and local governments reel from a collapse in tax revenues.

The unemployment rate fell to 7.9 percent, down from a record high of nearly 15 percent in April. But even that good news carried a caveat: Nearly 700,000 people left the labor force, meaning they no longer counted as unemployed. And a rising share of the unemployed report that their job losses are permanent, rather than furloughs.

Unemployment rate

By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics

The report was the last set of monthly jobs numbers — and one of the last major pieces of economic data — before the presidential election on Nov. 3.

Trump administration officials put a positive spin on the report. Larry Kudlow, the director of the National Economic Council, said on the Fox Business Network that analysts were misreading the numbers. “I think they are better than some people think,” he said. “The overall economy is looking good.”

It isn’t clear how much the economic data will matter to an election race upended by the news that President Trump tested positive for the coronavirus. But economists said recent data carried a clear message: Without a “Phase 4” spending package in Congress, the slowdown will only get worse.

“Everything depends on Phase 4 and whether we get that or not,” said Aneta Markowska, chief economist for the investment bank Jefferies. “There’s no middle ground.”

Prospects for a deal improved this week after seeming all but dead in September. House Speaker Nancy Pelosi on Friday floated the possibility that Mr. Trump’s coronavirus diagnosis could make an agreement more likely.

“This kind of changes the dynamic, because here they see the reality of what we have been saying all along: This is a vicious virus,” Ms. Pelosi said on MSNBC.

For small businesses in the industries hit hardest by the pandemic, the lack of federal assistance is an existential threat — and time is running out.

When the pandemic shut down movie theaters last spring, Cleveland Cinemas was able to stay afloat in part thanks to a loan under the Paycheck Protection Program. But that money is long gone. So are the cash savings that the company, which operated five theaters in the Cleveland area, had set aside to pay for new seating to help compete with big multiplexes.

Jon Forman, who has owned Cleveland Cinemas since 1977, isn’t sure what to do next. He has reopened only two of his theaters, and neither is attracting enough patrons to break even, even with fewer than 10 employees, down from 85 before the pandemic.


Credit…Da’Shaunae Marisa for The New York Times

Credit…Da’Shaunae Marisa for The New York Times

Many Americans remain wary of sitting indoors with strangers for two or three hours. And studios, hesitant to distribute big-budget movies when few people will pay to see them, have been delaying major releases until 2021.

Big chains may have the resources to wait for better days, but Mr. Forman isn’t sure he does. He has closed one theater permanently. Two others have been dark since March, and he is thinking about shutting the two reopened ones until demand picks up.

“We’re on a slope going down,” he said. “Without some sort of support, businesses are not going to survive.”

Stories like Mr. Forman’s reflect the mounting risks that as the crisis drags on, it will do lasting damage to the economy.

When unemployment spiked in March and April, most of the job losses were temporary layoffs or furloughs. But that is beginning to change. The number of people reporting they had been permanently let go rose to 3.8 million in September, nearly twice as many as at the height of the pandemic in April.

Job losses are more likely to be permanent than earlier in the pandemic

Share of jobs lost each month that are temporary layoffs

By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

“The temporary layoffs in the beginning are turning more and more into permanent layoffs now as companies begin to see what their near future looks like,” said Erica Groshen, a Cornell University economist and the former head of the Bureau of Labor Statistics.

Prospects are particularly grim for those who lost their jobs in the first weeks of the crisis. More than 2.4 million people have been out of work for 27 weeks or more, the formal — if somewhat arbitrary — threshold for long-term joblessness. An even bigger wave is on the way: Nearly five million people have been out of work for 15 to 26 weeks.

Research has found that people who are out of work for six months or more have a harder time getting jobs even when the economy improves, and many end up leaving the work force. That can leave lasting scars on both workers and the broader economy.

Connie Sarmiento used to work three jobs to support her family as a single mother. She lost all of them in a matter of weeks: The Grand Hyatt in San Francisco, where she worked as a telephone operator, laid her off in March. The following month, she lost her jobs working at Oracle Park, the Giants’ baseball stadium, and Chase Center, home of the N.B.A.’s Golden State Warriors.

Initially, Ms. Sarmiento was able to make ends meet thanks to the $600 a week that the federal government added onto her $450-a-week unemployment payment from the state. But the supplemental benefits expired at the end of July, and she is falling behind on her bills.

Ms. Sarmiento’s $3,000 monthly rent was due Thursday, but she has only half the money she needs to pay it. “I have to tell my landlord that I am unable to pay,” she said. “I’m afraid he’s going to tell me I have to move out. That’s really scary.”


Credit…Brandon Ruffin for The New York Times

Ms. Sarmiento hopes to return to work at the Hyatt this fall and at Oracle Park next season. But she worries about her prospects if those jobs don’t return.

“I feel hopeless,” she said. “Some of the only jobs I can find are in warehouses. I’m 60 years old and I don’t know if I can lift big, heavy stuff anymore. My body is getting weak.”

The September data carried particularly grim news about the pandemic’s impact on women. Initial job losses were concentrated among employers with heavily female work forces, like the hospitality and retail industries. While employment in those businesses has begun to bounce back, many women have been unable to return to work because they are disproportionately shouldering the burden of having children home from school.

Unemployment for women is worse than men’s across most demographics

Unemployment rates by race for men, women and over all


By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics

The number of women working fell by 143,000 in September, and the share of women working or actively looking for work — a measure known as the labor force participation rate — dropped to 55.6 percent from 56.1 percent. Apart from April and May 2020, that is the lowest reading for women’s labor force participation since 1987.

Economists worry that the unexpected pause in their careers could prove to be a long-term setback for many women.

“We know that women leaving the work force to care for children for a while has lasting effects on their earnings, their seniority and their climb up the ladder,” said Julia Pollak, a labor economist with the career site ZipRecruiter. “Career interruptions have a huge effect.”

When schools and child care centers closed in March, Darsheen Sargent began bringing her 11-year-old daughter with her to her job as a home health aide in the Seattle area. During the day, she juggled two jobs at the same time — caring for her client, and running into the other room to help her daughter adjust to online schooling.

But Ms. Sargent, 48, grew increasingly concerned about the risk she posed to herself, her daughter, and her client by continuing to go to work each day. And she found balancing work and child care too much to handle. In mid-April, she decided to take a leave of absence from her job.

But the relief she felt at being able to focus purely on her daughter’s needs was quickly replaced by anxiety over keeping up with her bills now that she was no longer working. She has had to borrow money from friends to pay her rent, utilities and car payment.

As soon as schools and child care centers reopen, she plans to return to work. But she has no idea how long that will take.

“As a single parent, I’m the sole provider for my daughter, and I’m just doing the best I can to manage,” she said.

Jeanna Smialek, Alan Rappeport and Emily Cochrane contributed reporting.

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New Layoffs Add to Worries Over U.S. Economic Slowdown

The American economy is being buffeted by a fresh round of corporate layoffs, signaling new anxiety about the course of the coronavirus pandemic and uncertainty about further legislative relief.

Companies including Disney, the insurance giant Allstate and two major airlines announced plans to fire or furlough more than 60,000 workers in recent days, and more cuts are expected without a new federal aid package to stimulate the economy.

With the election a month away, an agreement has proved elusive. The White House and congressional Democrats held talks on Thursday before the House narrowly approved a $2.2 trillion proposal without any Republican support. It was little more than a symbolic vote: The measure will not become law without a bipartisan deal.

After business shutdowns in the early spring threw 22 million people out of work, the economy rebounded in May and June with the help of stimulus money and rock-bottom interest rates. But the loss of momentum since then, coupled with fears of a second wave of coronavirus cases this fall, has left many experts uneasy about the months ahead.

“The layoffs are an additional headwind in an already weak labor market,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “As long as the virus isn’t contained, this is going to be an ongoing phenomenon.”

The concern has grown as measures that helped the economy weather the initial contraction have wound down. The expiration of a $600-a-week federal supplement to unemployment benefits was followed by a 2.7 percent drop in personal income in August, the Commerce Department said Thursday.

In a separate report, the Labor Department said 787,000 people filed new applications for state jobless benefits last week. The total, not adjusted for seasonal variations, was a slight decline from the previous week, but continued to reflect the highest level of claims in decades.

The most recent layoffs are not included in that figure, nor will they be reflected in September data to be released by the department on Friday, the last monthly reading on the labor market before the election. The report is expected to show a continuing slowdown in hiring, with barely half of the spring’s job losses recovered, although there is more uncertainty than usual around the estimates.

“This doesn’t bode well for the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics. “When you combine the layoffs with fiscal aid drying up, it points to very soft momentum in the final quarter of the year.”

Furloughs of more than 30,000 workers by United Airlines and American Airlines began Thursday after Congress was unable to come up with fresh aid for the industry, though the companies said they would reverse the cuts if Congress and the Trump administration reached an agreement. A $50 billion bailout in March obligated the carriers to hold off on job cuts through Oct. 1.


Credit…Eve Edelheit for The New York Times

Credit…Stephanie Keith for The New York Times

Allstate announced Wednesday that it would lay off about 3,800 employees to reduce costs. Those are about 8 percent of the roughly 46,000 employees Allstate had at the end of 2019.

Houghton Mifflin Harcourt, one of the country’s largest book publishers, said Thursday that it was cutting 22 percent of its work force, including 525 employees who were laid off and 166 who chose to retire. The company is a major supplier of educational books and materials, a business hit hard by school closings.

The Walt Disney Company said Tuesday that it would eliminate 28,000 jobs, mostly at theme parks in Florida and California. Many of the workers had been on furlough since the spring, but the company said it was making the cuts permanent because of “the continued uncertainty regarding the duration of the pandemic.”

Travel, entertainment, and leisure and hospitality employers have been among the hardest hit by the pandemic, and they continue to lag even as other areas of the economy have reopened. The American Hotel & Lodging Association, a trade group, said that without new stimulus legislation, 74 percent of hotels would lay off additional employees and two-thirds would be out of business in six months.

“We’re in a different phase of the recovery,” Mr. Daco of Oxford Economics said, and with demand for many companies’ services stuck below where it was before the pandemic, “businesses are left with no other choice but to reduce costs.”

Consumer spending on goods — whether for immediate consumption, like food, or used over a longer term, like appliances — now exceeds levels preceding the pandemic. But outlays for services, which account for roughly two-thirds of the nation’s economic activity, remain down about 8 percent.

The economic picture is not completely bleak. Personal spending was up 1 percent last month, and readings of consumer confidence have been gaining. Helped by low mortgage rates, the housing market is on a tear in much of the country, lifting employment in residential construction 2.1 percent from June to August, according to the Associated General Contractors of America.

But for many Americans, the easing of economic growth has meant an unexpected return to the ranks of the unemployed.

When the pandemic struck in March, Alex Stern was furloughed from his job as a publicist at a public relations firm in New York. He was called back in May after the agency, which works with companies in the food and beverage industry, received a loan through the federal Paycheck Protection Program.

Credit…Michelle V. Agins/The New York Times

But the company struggled to stay afloat, and Mr. Stern was permanently laid off on Tuesday.

To pay the November rent, he will have to borrow money from his parents, he said. He is considering moving back to his childhood home in Pennsylvania until he can find a new job.

“I don’t want to leave New York, and it’s hard because I’m almost 30 years old and I don’t know what I’m going to do next in life,” Mr. Stern said.

Among those affected by the Disney cutbacks is Taisha Perez, 29, who had worked part time as a drummer at the Animal Kingdom Theme Park at Walt Disney World in Orlando, Fla., for nearly three years.

The job gave her both a steady source of income and time to pursue her passion, television acting. “It’s honestly my favorite job that I’ve ever had,” Ms. Perez said. “I loved putting a smile on people’s faces.”

When she was furloughed in mid-March after the pandemic hit, she thought she would be out of work for just a few weeks. But on Tuesday, a text message from her union representative told her that her job would not be coming back.

“I was just in shock,” she said. “I couldn’t believe it.”

Ms. Perez said she could pay her rent and utilities on the roughly $250 a week she receives in state unemployment benefits, but could not afford any extra expenses, like the car she needs after hers broke down in March.

For those like Ms. Perez who lost work earlier in the year, the end of the $600 federal unemployment supplement has added to financial hardships.

Joann Taylor, a 45-year-old catering coordinator at a McAlister’s Deli franchise in Houston, used to work about 30 hours per week. But when the pandemic hit, her boss put her in an on-call position for deliveries only.


Credit…Todd Spoth for The New York Times

As a result, her hours were cut so severely — sometimes to two a week, or none at all — that she qualified for unemployment insurance, including $300 a week in Texas benefits before taxes.

But when the $600 weekly supplement expired at the end of July, Ms. Taylor began struggling to pay her monthly bills, including $1,240 in rent, $180 for electricity, a $240 car payment and $155 for auto insurance.

Determined to provide for her daughters, who are 6 and 14, she used the time while underemployed to get a license to sell life and health insurance. Now she’s looking for an agency to take her on, hoping for steadier income.

Until then, without further aid from Congress, Ms. Taylor is worried about paying the rent and buying groceries.

“I will have to go to every church around me and ask for help,” she said. “I will stand in food lines with the kids, because I cannot leave them at home. I will apply anywhere that I can for help, because there’s no way that I can allow us to be homeless.”

Reporting was contributed by Ben Casselman, Niraj Chokshi, Emily Cochrane, Alan Rappeport and Elizabeth A. Harris.

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Airlines, Facing a Slow Recovery, Begin Furloughing Thousands

When Congress gave passenger airlines a $50 billion bailout in March, industry executives hoped the aid would tide them over until the fall, when more people might be traveling and a vaccine might be closer at hand. Several months later, that hopeful future remains extremely murky.

With no recovery in sight and negotiations over another stimulus package at an impasse, United Airlines and American Airlines on Thursday began furloughing more than 32,000 workers. The companies said they would reverse the cuts if Congress and the Trump administration reached an agreement to extend more aid to the industry, but there has been little or no progress in those talks.

“I am extremely sorry we have reached this outcome,” Doug Parker, American’s chief executive, told employees in a letter late Wednesday. “It is not what you all deserve.”

Airlines were prohibited by the March stimulus law from undertaking major cuts to where they fly and whom they employ until Oct. 1. For months, unions have lobbied lawmakers for more money to postpone the day of reckoning, arguing that airlines are crucial to the economy, and help support other major employers like airports, hotels, car rental agencies and restaurants.

The campaign worked, but only to an extent. A bipartisan majority of lawmakers in the House of Representatives, at least 16 Republican senators and President Trump said they would be willing to offer another lifeline to the industry. But the effort stalled as Congress and the administration remained deadlocked on a broader aid package.

The Trump administration has for weeks been exploring ways to help the industry unilaterally, through executive actions or by repurposing unused money from the previous relief legislation. But officials have concluded that those options were not feasible. Treasury Secretary Steven Mnuchin has indicated that Congress would need to authorize the Treasury to redirect leftover funds, such as the money that was appropriated for backstopping Federal Reserve lending programs.

In theory, airlines could apply for some of the unused funds set aside for companies that are critical to national security, but the Department of Defense would have to certify that use and the money could come with onerous repayment terms. Even if the definition of national security were interpreted to include passenger airlines, it is not clear how quickly such funds could be disbursed and if the companies would be comfortable with the terms.

Mark Meadows, the White House chief of staff, said Wednesday that the Trump administration would like to see legislation that provides an additional $20 billion to help airlines pay workers for six months.

Credit…Stephanie Keith for The New York Times

Anticipating a slow recovery, airlines this summer encouraged employees to volunteer for pay cuts, unpaid leave, buyouts and early retirement to reduce the need for furloughs. At United, employees who signed up for such programs helped reduce the number of furloughs from an expected 36,000 this summer to just over 13,000 by Thursday.

Amy Ticknor, a flight attendant who is among the 19,000 people American Airlines is furloughing, spent Thursday filing for unemployment insurance and taking care of her 6-week-old and 2-year-old daughters. She also started searching for a full-time job — her husband is self-employed and her job provided the family with health insurance.

Ms. Ticknor, who is also on the seventh week of a 10-week maternity leave, said she had been heartened by the lobbying efforts of her union, the Association of Professional Flight Attendants, but was disappointed when it became clear on Wednesday that a second round of federal funding was unlikely.

“It was devastating,” Ms. Ticknor, 29, said. “It was a real a blow to everything, my family life, my emotional well-being.”

Southwest Airlines and Delta Air Lines, the country’s other two large national airlines, have avoided sweeping furloughs because of temporary leave and other voluntary programs, at least for now. More than 40,000 Delta workers signed up for short- and long-term unpaid leave. The company has said that it may still furlough about 1,700 pilots next month. Nearly 17,000 employees at Southwest have signed up for leaves, buyouts or early retirement, and the company has said it won’t furlough any worker through the end of the year.

“They have very, very strong corporate cultures and I think those cultures were on exhibit in how these airlines have been able to avoid the furloughs,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel analysis firm. “Delta and Southwest were able to message more effectively.”

American and United have each also taken out Treasury Department loans of more than $5 billion, which could grow to $7.5 billion each at the administration’s discretion. Southwest and Delta declined the loans, which were authorized by the March stimulus law, the CARES Act. Across the industry, airlines have raised billions from a variety of sources.

While the industry’s fortunes have improved since travel plunged more than 95 percent in April, the number of people screened at airports by the Transportation Security Administration on Wednesday was still down about 70 percent from a year earlier. Collectively, U.S. airlines are losing billions of dollars every month and the International Air Transport Association, which represents most airlines, this week downgraded its forecast for the year, saying it now expects traffic to fall 66 percent compared with 2019.

“A few months ago, we thought that a full-year fall in demand of 63 percent compared to 2019 was as bad as it could get,” Alexandre de Juniac, the group’s chief executive, said in a statement. “With the dismal peak summer travel period behind us, we have revised our expectations downward.”

Last week, John Grant, a senior analyst at OAG, an aviation data provider, said the outlook for the next few months is stark for major U.S. airlines because of fewer bookings and more travelers using vouchers for canceled reservations. Most analysts say it will take years for passenger traffic to return to 2019 levels.

That devastation has rippled outward. Boeing, which was already struggling because of the worldwide grounding of the 737 Max, has had to slash production across the board and is cutting its work force by more than 10 percent. On Thursday, it said it would consolidate production of the 787 Dreamliner, a wide-body jet designed for longer flights, to just one factory, in South Carolina, as the pandemic has sharply reduced the number of planes airlines are buying.

Alan Rappeport contributed reporting.

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U.S. Risks Repeating 2009 Mistakes as Economic Recovery Slows

Trillions of dollars in federal aid to households and businesses has allowed the U.S. economy to emerge from the first six months of the coronavirus pandemic in far better shape than many observers feared last spring.

But that spending has now largely dried up and hopes for a major new aid package ahead of the Nov. 3 election are all but dead, even as the virus persists and millions of Americans remain unemployed. Already, there are signs that the economic rebound is losing steam, as some measures of consumer spending growth decelerate and job gains slow. Applications for jobless benefits rose last week, with about 825,000 Americans filing for state unemployment benefits.

The combination of a moderating economic rebound and fading government support are an eerie echo of the weak period that followed the 2007 to 2009 recession. In the view of many analysts, a premature pullback in government support back then led to a grinding recovery that left legions of would-be employees out of work for years. In recent weeks, prominent economists have warned that both the United States and Europe, where many early responses are drawing to a close, are at risk of repeating that mistake by cutting off government aid too soon.

“The initial response was good, but we need more,” said Karen Dynan, who was chief economist at the Treasury Department in the Obama administration and now teaches at Harvard. The decision to pull back on spending a decade ago, she said, “really prolonged the period of weakness after the great recession.”

In Europe, some national governments that have spent aggressively to subsidize wages and curb layoffs are wrapping up those efforts. While large countries including Germany have indicated that they remain willing to provide more support, some economists warn that continued aid announced in France and elsewhere might fall short of what is needed in the near term.

In the United States, the situation is more immediately worrying. Leaders of both major political parties have expressed support, at least in theory, for additional aid. But the parties remain far apart on a deal, with Democrats pushing for a large package and Republicans arguing that a smaller plan will suffice.

The ability to reach a compromise in the coming weeks has been further complicated by a looming confirmation battle to replace Ruth Bader Ginsburg on the Supreme Court.

“That’s my great concern, that we’re going leave and not have a stimulus Covid package put together,” Senator Roy Blunt, Republican of Missouri, said Thursday. “I just think the Supreme Court thing used up a lot of oxygen. We’ll see. I’d like to see us get this done.”

One factor making an agreement even less likely: The economic revival is slowing, but not as sharply as some economists predicted would happen once expanded unemployment insurance and other programs began to ebb.

Credit…Amr Alfiky/The New York Times

Job growth slowed in July and August but remained positive. Consumer spending, which rebounded sharply once federal money started flowing in April, has likewise seen a more gradual rebound but has not fallen. Layoffs, as measured by claims for unemployment insurance, have continued to trend down, although they remain high by historical standards.

But many economists said that allowing the economy to slow at the current moment — with millions out of work or underemployed — could lead to long-term economic scarring. Employers have still hired back less than half of the 22 million workers they laid off in March and April, and the unemployment rate is higher than the peak of many past recessions. Even optimistic forecasts imply that gross domestic product will shrink more this year than in the worst year of the last recession.

“A stalling recovery when we’re stalling at near the worst point of the great recession is a terrible outcome,” said Tara Sinclair, an economist at George Washington University.

Jerome H. Powell, the Fed chair, made clear during congressional hearings this week that the economy, while recovering, would likely need more support.

“The power of fiscal policy is unequaled, by really anything else,” Mr. Powell said during testimony before a House subcommittee on Wednesday. “We need to stay with it, all of us,” adding, “the recovery will go faster if there’s support coming both from Congress and from the Fed.”


Credit…Pool photo by Kevin Dietsch

His colleague Eric Rosengren, president of the Federal Reserve Bank of Boston, said Wednesday that additional fiscal policy “is very much needed” but noted it “seems increasingly unlikely to materialize anytime soon.”

Some economists warn that the economy could begin to shrink again if Congress doesn’t act. Many households were able to save in the spring, thanks to federal aid and shutdown orders that kept them from spending money on restaurant meals and hotel stays. Households socked away about one-third of their disposable incomes in April, and while the savings rate has come down since, it remained sharply elevated from pre-crisis levels through July. That should create some buffer.

But those funds won’t sustain jobless families indefinitely now that extra unemployment benefits have expired and a partial supplement supported by repurposed federal funds is on the brink of running out. And businesses that were kept afloat during the summer may struggle when colder weather puts an end to outdoor dining and other activities.

There is an alarming precedent for what happens when support fades in the midst of an uncertain economic moment.

In the early stages of the 2008 financial crisis, Congress and the White House — first under President George W. Bush, then under President Barack Obama — pumped billions of dollars into the economy in the form of tax cuts for individuals and companies, infrastructure spending, extended unemployment benefits and other measures.

But Mr. Obama was unable to win approval for further large-scale stimulus efforts, and by 2010 Congress had effectively ceded to the Federal Reserve the job of managing the still-tenuous economic recovery.

“The lesson from the last crisis is that we had elevated unemployment for years, and it was a slow grind to work that down,” Robert S. Kaplan, president of the Federal Reserve Bank of Dallas, said in an interview Monday, explaining that he supports extending fiscal aid. “We have a chance here, if we act quickly, to mitigate the lasting damage that we saw.”

The post-financial crisis pullback in government spending was even more dramatic in Europe, where austerity was enforced across countries with weaker economies and higher debt levels, and where the European Central Bank raised interest rates in 2011, removing monetary support years before the Fed first tiptoed higher in 2015. Another slump ensued across European economies, bringing with it years of high unemployment, low inflation and weak growth.

There are important differences between the two crisis eras, especially in the United States. The economy was far stronger before the pandemic hit than in 2007, when inflated home prices, risky lending and financial engineering left the banking system vulnerable. And policymakers responded far more quickly and aggressively this time around.

The Fed cut interest rates close to zero in March, before data showing widespread economic damage had even begun to emerge. In the last crisis, the Fed didn’t take that step until the end of 2008, a year after the recession had begun. The European Central Bank rolled out massive bond-buying programs, something monetary policymakers in the currency block resisted in the immediate aftermath of the 2009 crisis.

But central banks have less room to adjust their policies to bolster growth now than they did a decade ago. Interest rates and inflation have fallen to low levels across advanced economies, stealing potency from monetary policy tools that work by making credit cheap.

That’s where fiscal policy — elected officials’ ability to tax and spend — comes in. Economic theory suggests that fiscal policy can be effective at times when monetary policy is not.

Initially, policymakers across advanced economies seemed far more willing to spend heavily and amass huge deficits than they were during the last crisis, at least in part because the same low interest rates robbing central banks of their power have made payments on government debt cheaper.

In the early days of this crisis, Congress approved legislation that sent direct payments to most American households, established a small-business assistance program that eventually handed out more than half a trillion dollars in grants and low-interest loans, and added $600 a week to unemployment checks, while simultaneously expanding the unemployment system to cover millions more workers. Together, the programs dwarfed the response to the last recession.


Credit…Joseph Rushmore for The New York Times

The aggressive response was successful. After shedding millions of workers in March and April, companies began bringing them back in May and June. Stimulus checks and enhanced unemployment lifted personal incomes in April and May, buoying spending. A predicted wave of foreclosures and evictions largely failed to materialize. By August, the unemployment rate had fallen to 8.4 percent, defying expectations that it would remain in double digits into next year.

While Mr. Powell said that government spending so far should get “credit” for that outcome, risks loom if key programs are allowed to permanently lapse. As unemployed workers run through their savings, they might pull back on spending, evictions and foreclosures could increase, and the fallout could scar the economy, he said during testimony on Thursday.

“There’s downside risks to the economy probably coming if some form of that support does not continue,” Mr. Powell said.

While the Fed has pledged to keep rates low and is operating a variety of programs meant to keep credit flowing to households and businesses, those are not a substitute for direct federal spending.

Economists said Mr. Powell appears to have learned a lesson from the aftermath of the last recession: When the Fed is forced to try to rescue the economy on its own, the result is a painfully slow recovery that takes years to reach many of the most vulnerable households.

The consequences of another slow recovery would almost certainly fall disproportionately on low-income families, many of them Black and Hispanic. Those workers were among the last to benefit from the plodding recovery after the last recession, and have been among the hardest hit by the current crisis.

“This pandemic, and our efforts here, could very well create even greater inequality in our nation than there was even before the pandemic,” said Representative Andy Kim, Democrat of New Jersey and a former Obama administration official. “Some are going to be able to get through this much, much better than others, and those that are not? This is one of those once in a lifetime situations that could very well cripple them for a generation if we don’t take some of the necessary steps in the next few weeks and months.”

Peter S. Goodman and Emily Cochrane contributed reporting.

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Airline Job Cuts Could Pressure Congress and Trump on Stimulus

American Airlines warned employees on Tuesday that it would cut up to 19,000 workers on Oct. 1, saying that there was little sign that the pandemic-induced reluctance to travel was diminishing.

The airline is looking to cut thousands of flight attendants, pilots, technicians, gate agents and other staff, it said. Including buyouts, retirements and leaves of absence, the company expects to have about 40,000 fewer employees on Oct. 1 than it did before the pandemic, a 30 percent decline in its work force.

American is just the latest airline to predict bad news. Earlier this summer, United Airlines said that it could furlough as many as 36,000 employees in the fall. And, on Monday, Delta Air Lines warned that it might have to furlough as many as 1,941 pilots in October, even after nearly as many had accepted buyouts.

While weak demand is spurring these announcements, the airlines are also seeking to put pressure on Congress and the Trump administration to strike a deal on another coronavirus stimulus package. Passenger airlines received $25 billion to help pay workers under a March legislative package, with American alone receiving $5.8 billion.

Evidence is mounting that the once-strong economic recovery is losing steam. Hiring slowed in July, and various indicators suggest it has slumped further in August. Weekly claims for unemployment benefits have jumped back above one million, reversing a gradual decline. And new data on Tuesday showed that consumer confidence fell in August to its lowest level since the pandemic took hold.

Economists attribute the slowdown, at least in part, to the waning federal support for families and businesses. The $600 a week in extra unemployment benefits that Congress approved in March expired at the end of July. The Paycheck Protection Program, which provided grants and low-interest loans to small businesses, ended this month. And the $1,200 tax rebates that appeared in bank accounts and mailboxes starting in mid-April have not been repeated.

House Democrats passed a bill months ago that would extend or replace many of those programs, while Senate Republicans have struggled to coalesce around generally smaller measures. Efforts to find a compromise between Democrats and the administration collapsed, and Congress left town for its summer recess without reaching a deal. President Trump this month announced a series of executive actions to help unemployed workers and others, but those programs have been slow to roll out and diverted existing funds instead of doling out new aid. Only Congress can allocate new funds.

For many businesses, time is running out. Cases of the virus are falling but remain high in much of the country, making a full reopening of the economy impossible. Entire sectors, such as live entertainment, hospitality and travel, remain either shut down or severely restricted. And experts warn that the longer the crisis persists, the more lasting the damage will be: Furloughs will turn into permanent job losses, short-term business closures will lead to bankruptcies, and sectors that were relatively insulated from the pandemic will suffer as the public health crisis morphs into a more traditional recession.

“This is not a stopgap crisis,” said John Lettieri, president of the Economic Innovation Group, a Washington research organization. “It is a prolonged, deep, far-reaching crisis that is going to challenge the ability of businesses to survive.”

Things could get worse in the coming months. Restaurants and other businesses that have been able to shift some operations outdoors will struggle when the weather turns colder. And health experts warn that infections are likely to rise again in the fall and winter. That means businesses have to prepare for the crisis to last well into 2021 — which in many cases will mean further layoffs and cost-cutting.

Credit…Shannon Stapleton/Reuters

“It’s one thing to make do for a month or two months, it’s another thing to make do for six, nine, 12 months,” Mr. Lettieri said.

Airlines are preparing for a long slog. They and their employees were hopeful this month about the prospects for a union-led effort to renew the $25 billion program included in the CARES Act in March. A bipartisan majority in the House of Representatives, more than a dozen Senate Republicans and Mr. Trump expressed support for the extension. But the failure of the stimulus talks has forced airlines like American to prepare deep job cuts.

The furloughs there will disproportionately affect flight attendants, who are expected to account for more than 40 percent of the cuts. In addition to the 19,000 workers it is cutting, American said thousands of other employees had agreed to take buyouts, early retirement or temporary leaves of absence.

“We must prepare for the possibility that our nation’s leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities,” American’s chief executive, Doug Parker, and president, Robert Isom, said in a letter to workers announcing the cuts. They encouraged employees to contact lawmakers to ask for stimulus funding for the industry.

Some airline workers have been able to mitigate or avoid cuts by agreeing to concessions. On Tuesday, for example, the pilots’ union for Spirit Airlines said that nearly half of its members had agreed to work fewer hours to prevent 600 cuts. Still, nationally, more than 11,000 airline pilots have received furlough warnings, according to the Air Line Pilots Association.


Credit…Andrew Caballero-Reynolds/Agence France-Presse — Getty Images

Based on current demand, American expects to fly less than half as many flights in the final three months of 2020 as it did a year earlier. The airline had taken an aggressive approach to restoring flights early in the summer, but pulled back as the recovery stalled in July when virus cases surged.

Last month, United said it expected travel would remain below 50 percent of previous levels until a vaccine is widely distributed, which it doesn’t expect until late 2021. Southwest Airlines, which has said it has no plans for substantial job cuts this year, said last week that it expected October capacity to be down about 40 to 50 percent.

Over all, domestic travel is down 44 percent while international flights are down 75 percent, according to Airlines for America, an industry association. The flights that are running are just over half as full as they were last year and most industry executives and analysts expect it will be three to four years before travel recovers to 2019 levels.

Even good news is relative for airlines. Sunday was the second-best travel day of the pandemic, with more than 840,000 people screened by the Transportation Security Administration at airport checkpoints. That amounted to about 34 percent of the people screened a year earlier.

Airlines may also cut back on flights in October. The CARES Act had allowed the Transportation Department to require companies that receive aid to continue to serve destinations they had before the pandemic. But those requirements expire on Sept. 30 after the department declined to extend them this month.

As a result, many small airports could lose service. Already, American has said it will stop flying to cities like New Haven, Conn.; Dubuque, Iowa; Joplin, Mo.; and Kalamazoo, Mich.

Airlines have gone to great lengths to try to comfort a hesitant public, including by imposing mask requirements, cleaning planes frequently and limiting seating capacity.

But those changes have not brought passengers back in force, especially lucrative business travelers. Airline revenues fell more than 86 percent in the second quarter of the year, according to Airlines for America, and the industry is expected to lose billions of dollars each month through the end of the year.

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Nursing Homes With Safety Problems Deploy Trump-Connected Lobbyists

Some want direct government aid. Others want tax breaks. Many want protection against lawsuits.

Nursing homes have been the center of America’s coronavirus pandemic, with more than 62,000 residents and staff dying from Covid-19 at nursing homes and other long-term care facilities, about 40 percent of the country’s virus fatalities. Now the lightly regulated industry is campaigning in Washington for federal help that could increase its profits.

Some of the country’s largest nursing-home companies — including those with long histories of safety violations and misusing public funds — have assembled a fleet of lobbyists, many with close ties to the Trump administration.

Eliezer Scheiner, a nursing-home owner and major donor to President Trump, recently retained Brian Ballard, a friend of the president who used to lobby on behalf of Mr. Trump’s business. Genesis Healthcare, the largest nursing-home chain in the United States, hired two former top White House aides, including Jim Schultz, a former special assistant to Mr. Trump. LifeCare Centers of America, whose Kirkland, Wash., facility had the country’s first coronavirus outbreak in March, brought on four former Republican Senate aides. The industry’s main trade group enlisted Haley Barbour, a former chairman of the Republican National Committee.

Credit…M. Scott Mahaskey, via Politico

It is hardly unusual for embattled industries to seek help from Washington. But the fact that individual nursing-home companies are hiring lobbyists, not just relying on trade associations, reflects the ambitious nature of the industry’s mobilization.

Nursing homes are not only seeking assistance in surviving a pandemic. They are also capitalizing on the public health crisis to pursue a long-sought wish list that, until now, has remained mostly out of reach.

The industry has already notched one potentially lucrative victory. LifeCare Centers and others successfully pushed the Trump administration in July to exempt nursing-home companies from a 2017 law that curtailed how much interest big companies can deduct from their taxes. The change could effectively lower the federal tax bills for many nursing-home operators.

Nursing homes — many of which were in deep financial trouble even before the pandemic — are also on the hunt for government cash infusions through the federal economic rescue that became law in March, as well as any future stimulus bills.

The industry has received about $7.6 billion in federal grants through the federal economic stimulus package, according to the American Health Care Association, an industry group, and will soon get another $5 billion. Nursing homes have also received an estimated $11 billion more in government loans and advance Medicare payments, according to an analysis of federal data by Good Jobs First, a progressive research group. Executives at Genesis, which has reported 1,500 deaths at its homes nationwide, told investors last week that the company had received nearly $190 million in federal grants and was looking for more.

On Saturday, Mr. Trump seemed to indicate that more aid was on its way. “We will announce additional measures to protect nursing home residents in the coming days,” he said at a news conference at his golf club in Bedminster, N.J. “We’ve worked very hard with nursing home companies.”

Among the industry’s biggest goals is for the federal government to block residents and their families from suing nursing homes for wrongful deaths and other malpractice claims — even those that have nothing to do with Covid-19.

Senate Republicans introduced legislation last month that would make it virtually impossible for families whose relatives died from neglect or the coronavirus to hold nursing homes accountable in court. The legislation would apply retroactively to 2019 and extend through 2024.

The Senate majority leader, Mitch McConnell, has said the liability-protection law — which would also apply to a range of other industries worried about being sued if they reopen during the pandemic — must be included in any new economic stimulus package.


Credit…Anna Moneymaker for The New York Times

Mr. McConnell’s former chief of staff Kyle Simmons was recently hired by the American Health Care Association, the powerful trade group representing for-profit nursing-home companies, to work on legislative issues related to the virus, according to federal lobbying records. He is among the lobbyists who have championed the bill in the Senate, according to three people with direct knowledge of the matter.

Nursing-home operators have argued that they should not be held responsible for the deaths of residents, including many who were already uniquely vulnerable to the virus, because they were hit by a pandemic that no one could have anticipated. Many homes have argued that they struggled to get testing kits and other essential protective gear that might have helped them contain the spread.

“Without legal protections, many nursing homes and assisted-living communities could shut down completely, threatening access to long-term care for thousands of individuals and precious jobs for caregivers,” said Beth Martino, a spokeswoman for the American Health Care Association.

But even before the coronavirus, many nursing homes had poor records when it came to safety and staffing. A report this spring from the Government Accountability Office found that the industry failed to maintain basic infection-control standards like quarantining sick residents or requiring frequent hand washing.

Some of the nursing homes with high death tolls from the virus have been cited by regulators for safety and other problems. LifeCare Centers, for example, paid $145 million in 2016 to resolve allegations, without admitting wrongdoing, that its nursing homes had bilked Medicare. After the virus spread among LifeCare patients and staff in Kirkland, government inspectors faulted the home for failing to properly notify the state authorities.

Davis Lundy, a spokesman for LifeCare Centers, said the company is “fully compliant with any requirements of the settlement” with the Justice Department. He said that staff at the Kirkland home “deserve high praise, not criticism,” and that the company was appealing the decision by the state health department.

The industry has successfully lobbied at least 20 states to gain immunity from lawsuits in state courts. But the federal Safe to Work Act would go further than anything on the state level because it would cover lawsuits that had nothing to do with the coronavirus and apply to deaths that occurred months before the virus began spreading.

“The industry is using this epidemic to win a get-out-of-jail-free card,” said Toby Edelman, a senior lawyer at the Center for Medicare Advocacy, a nonprofit legal assistance group for the elderly.


Credit…Eric Gay/Associated Press

With Mr. Trump in the White House, nursing-home companies have won numerous victories. In 2017, the Trump administration, under pressure from industry groups, adjusted how nursing homes were fined for violating federal rules. Under the new guidance, the average fine dropped more than 30 percent, according to an analysis last year of federal data by Kaiser Health News.

The Trump administration also proposed weakening infection-control rules, imposed under President Barack Obama, that required all nursing homes to employ at least one person who specialized in preventing infections.

In November, a group of nursing-home operators gathered in a ballroom at the InterContinental hotel in Midtown Manhattan to raise more than $3 million for Mr. Trump’s re-election campaign. Mr. Trump stood onstage and thanked Mr. Scheiner, who donated $750,000, the most of any attendee, “for doing such an incredible job.” Mr. Scheiner, who owns more than 20 nursing homes, received a thunderous round of applause, according to video of the event.

Mr. Scheiner and his company, TL Management, have faced serious problems. This year, he settled allegations, made by a federally appointed bankruptcy court trustee, that he and his partner fraudulently transferred more than $1 million in assets out of a nursing-home operator before it filed for bankruptcy. (Mr. Scheiner denied wrongdoing.) This year, 43 residents have died at homes owned by Mr. Scheiner, according to state records reviewed by The New York Times.

In May, Mr. Scheiner donated an additional $50,000 to a different political action committee bankrolling Mr. Trump’s campaign, federal records show.

TL Management has hired four lobbyists. One is Mr. Trump’s friend Mr. Ballard. Another is Emily Hargan, whose husband is a top official at the Department of Health and Human Services, which oversees the nation’s nursing homes.

The lobbyists’ mandate was to help win legal immunity for the industry and to secure financial aid from the federal government, records show. Since the pandemic began, Mr. Scheiner’s homes have received roughly $26 million in federal grants and loans, according to Good Jobs First.

Mr. Ballard’s lobbying firm had an additional goal: to help cut TL Management’s tax bill, according to two people familiar with the matter. The 2017 overhaul of the federal tax code limited how much interest companies can deduct from their taxes.

TL Management, along with LifeCare Centers and other large nursing-home companies, asked the Treasury Department to exempt the industry from some of those limits.

On July 28, they got what they wanted: Treasury proposed allowing companies that operate a “qualified residential living facility” to be able to deduct a larger amount of interest from their taxes.

But the protection against lawsuits may be a higher-stakes issue for Mr. Scheiner’s network of nursing homes.


Credit…Matthew Busch for The New York Times

At Mr. Scheiner’s Southeast Nursing and Rehabilitation Center in San Antonio, which has been cited by regulators for failing to control infections three years in a row, 18 residents have died during the pandemic. That is the most deaths at any nursing home in the city, according to The Times analysis of state records.

The families of some of those residents have sued. In a lawsuit last month, the family of Jose Velasquez, who died after contracting the coronavirus, said Southeast staff repeatedly minimized the gravity of his illness. An hour before he died, employees told the family that Mr. Velasquez was “doing fine and showed no symptoms of the disease,” according to the lawsuit.

Texas is not among the 20 states that have shielded nursing homes from pandemic-related lawsuits. But if the federal liability bill passes, the families’ lawsuits would most likely be derailed.

At the November fund-raiser in New York, Mr. Trump also paid tribute to a longtime friend, Ruby Schron, who in 2003 agreed to pay more than $700 million to buy dozens of properties from Mr. Trump. “Ruby, I want to thank you,” Mr. Trump said at the event. “You’re a great guy.”

In 2010, Mr. Schron and SavaSeniorCare, one of the country’s largest nursing-home chains, agreed to pay $14 million to settle Justice Department allegations that they solicited kickbacks from a pharmacy to provide drugs to nursing-home patients. In a separate 2015 case, the Justice Department accused Sava of routinely submitting bogus claims to Medicare. The case is ongoing.

The Justice Department said in a 2010 court filing that Mr. Schron “controlled” Sava. In a 2016 report prepared with the input of Sava’s financial advisers, the bond-rating firm S&P Global said Mr. Schron “effectively owns most of the equity in Sava.”

Annaliese Impink, a spokeswoman for Sava, said Mr. Schron “is not involved in the operations” of the company. “He is the landlord of several of the centers.”

This year, the Trump administration has provided Sava with roughly $74 million in loans and grants through the economic stimulus package, according to Good Jobs First.

In June, the Democratic-controlled House committee overseeing the federal response to the coronavirus said it would be examining the records of the five largest for-profit nursing-home chains, including Sava, Genesis and LifeCare. It is looking at how the companies are spending the federal stimulus money they have already received.

As it looks for victories on Capitol Hill, the industry is trying to soften its image.

Mark Parkinson, who runs the American Health Care Association, told members this summer that the group was preparing a $15 million ad campaign in Washington. “We hope to shape the national conversation,” he wrote.

Kitty Bennett contributed research.

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Without $600 Weekly Benefit, Unemployed Face Bleak Choices

When Latrish Oseko lost her job last spring, government aid helped prevent a crisis from becoming a catastrophe.

A $1,700 federal stimulus payment meant that when her 26-year-old car broke down, she could replace it. The $600 a week in extra unemployment benefits from the federal government allowed her to pay rent and buy food. When her day care provider closed, she was able to get her 4-year-old daughter a subscription to ABCmouse, an online learning app.

But the federal money has run out, and talks in Washington over how to replace it have broken down.

So Ms. Oseko, 39, is spending much of her time sitting in the Delaware hotel room where she has lived since her landlord kicked her out at the end of July, applying for jobs on her phone while watching the debate play out on the local news.

“I’m glued to it because I want to know, is there going to be hope for me?” she said. “They’re fighting, and I have to watch them fight, but they have a place to sleep at night.”

Until a few days ago, most analysts expected Congress to agree on a new emergency spending bill that would include at least a partial extension of the extra unemployment benefits, perhaps including retroactive payments for the period when the program lapsed.

But negotiations stalled, and in an appearance at his golf club in New Jersey on Friday, President Trump said that if no deal was reached, he would issue an executive order extending the extra benefits in some form. It is unclear whether he has the authority to do so, or how long it will take for states to start paying out the benefits if he does.

For many of the 30 million Americans relying on unemployment benefits, it could already be too late to prevent lasting financial harm. Without the extra $600 a week, which ran out at the end of July, they will need to get by on regular state unemployment benefits, which often total a few hundred dollars a week or less. For many families, that will not be enough to prevent eviction, hunger or mounting debt that will make it harder to climb out of the hole.

Households and the broader economy are particularly vulnerable at this moment. Eviction moratoriums are expiring or have expired in much of the country, although Mr. Trump threatened to bypass Congress to reinstate a partial federal moratorium. The Paycheck Protection Program, which helped thousands of small businesses to retain workers, ends this week.

There are already signs that the economy has slowed down this summer as virus cases have surged in much of the country. On Friday, the Labor Department reported a net gain of 1.8 million jobs in July, a smaller increase than in May or June. Many economists warn that layoffs could begin rising again without more government support. Food banks say they are bracing for a new wave of demand.

Before the pandemic, Ms. Oseko and her family were making ends meet, albeit with little margin for error. She earned $15 an hour as a contractor doing data entry. Her boyfriend earned a bit less cleaning dormitories at the University of Delaware. They were able to rent a two-bedroom house near a park where their daughter could play.

When the pandemic hit, Ms. Oseko’s hours were cut and her boyfriend was furloughed. Then, in May, she lost her job altogether. In the midst of that crisis, another one appeared: Their landlord sold her building and gave them 60 days to leave. They moved out last week and are burning through their meager savings at a rate of $76 a night at a Delaware motel that is filling up with families in the same predicament.


Credit…Hannah Yoon for The New York Times

Credit…Hannah Yoon for The New York Times

Without a job, Ms. Oseko hasn’t been able to find a new apartment; without an apartment, it has been hard to find a job.

“The jobs that I am qualified for want me to work from home, but I have no home,” she said.

The economic crisis caused by the pandemic has disproportionately affected low-wage workers like Ms. Oseko who have little in savings. Research from the last recession found that when unemployment benefits ran out, people cut their spending on food, medicine and other necessities, suggesting they were able to do little to prepare for the drop in income.

The more generous benefits offered during this recession may have allowed families to save some money, but those savings won’t last long, particularly when food prices are rising at the fastest pace in years.

As a result, families are being forced to make decisions with lasting consequences.

When Jason Depretis and his fiancée lost their Florida restaurant jobs in early March, they started falling behind on their rent and their car payment. The $600 unemployment supplement was a lifeline, allowing them to hold on to their home and their car. But on July 28, that lifeline snapped: The repo man showed up for the car on the day that their landlord delivered a three-day notice of eviction.

With the extra $600 a week, Mr. Depretis, 42, would probably have been able to pay enough to hold off both creditors. Without it, he had to choose. He paid his landlord $650 to stave off eviction, and watched the car be towed away.

But it was a terrible time to lose the car. He had found a job starting in September at a restaurant, but it is 45 minutes away, and there is no bus service that corresponds with his hours. The closest food bank is 30 minutes away, and he can’t get there without a vehicle. He said he didn’t know how he and his fiancée would put food on the table for themselves and their two children.

“Without the $600, there’s absolutely no way that my family’s going to make it,” he said.

For families like Mr. Depretis’s, even a temporary loss of income can be the start of a downward spiral, said Elizabeth Ananat, a Barnard College economist who has been studying the pandemic’s impact on low-wage workers. Wealthier families may be able to draw on savings to get through until Congress reaches a deal. But for lower-income households, even a temporary lapse in benefits can have lasting consequences. An eviction can make it hard to rent in the future. Having a car repossessed can make it hard to find another job. And for children, periods of hunger, homelessness and stress can have long-term effects on development and learning.

“Children cannot smooth their eating over the year,” Ms. Ananat said. “Families that do not have access to credit cannot smooth their food, their electricity, any of their necessities.”

Many Republicans argue that the extra benefits were keeping recipients from looking for work, especially because many were getting more on unemployment than they had made on the job. Business owners have complained that they are struggling to fill positions.

But several studies have found no evidence that the supplement was discouraging job hunting, and many workers appear to be accepting jobs even when the pay is less than their unemployment benefits. And by injecting billions of dollars into the economy each week, the benefits almost certainly prevented even more layoffs.

The lapse in benefits will push some people to return to work. But that decision, too, can carry costs.

Credit…Philip Cheung for The New York Times

When the pandemic hit, Enrique Guzman, a fleet service clerk at Los Angeles International Airport, was given the choice: to keep working or to stay home and receive a portion of his income, the equivalent of 10 hours a week.

Mr. Guzman, 27, decided to stay home. He has asthma, which puts him at a higher risk of complications if he were to catch the coronavirus, and he lives with his girlfriend and her mother, whose age, 51, makes her vulnerable to the virus. Between unemployment benefits and the partial paychecks from the airline, he was able to bring in $1,050 a week — less than he earned working full time, but enough to support his girlfriend and her mother.

But without the extra money, Mr. Guzman can no longer afford the $1,875 rent for their two-bedroom apartment in Montebello, Calif., plus the cost of utilities, food, and his student and car loan payments.

On Monday, with a sinking feeling in his stomach, he put on his uniform and returned to the airport for his first shift since the pandemic started. Mr. Guzman said he had no other choice.

“It wasn’t something that I wanted to do, but I’m the only income in my household now and I needed to go back to work so we can afford to pay our rent, afford to pay our bills,” he said. “I’m putting myself at risk so that we can afford to stay afloat.”

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Liability Shield Is a Stumbling Block as Lawmakers Debate Relief

WASHINGTON — Calls to protect corporations and schools from legal blame if workers fall ill from Covid-19 contracted on the job have incited a growing backlash as Congress and the White House negotiate over liability protections in economic relief legislation.

Businesses, hospitals, schools and the trade groups that represent them have pushed for any relief package to include protections from Covid-related lawsuits. But so far, there has been little sign of a surge in litigation as the economy reopens, and prominent voices have opposed such a measure, arguing that liability shields are unfair to workers and that businesses must take responsibility to keep them safe.

The issue has spilled into the world of sports. On Wednesday, College Athlete Unity, an organization that represents thousands of athletes at universities, wrote a letter to the N.C.A.A. and the Big Ten Conference urging them to revise plans for resuming fall sports. Among the proposals was to ban the use of Covid-19 waivers.

The players’ associations for the N.F.L., N.B.A., N.H.L., Major League Baseball and Major League Soccer have made a similar plea. In a letter to top Republican and Democratic lawmakers last Friday, they said that inserting liability protections in the legislation would be wrong.

“There is still much that is unknown about this disease, how it spreads, and the long term consequences of exposure,” they wrote, arguing it was unclear how such legislation would affect safety agreements that have been made between employers and employees. “It makes little sense during these uncertain times to both ask employees to return to work and, at the same time, accept all the risk for doing so.”

Some businesses — including salons, amusement parks, gyms and even President Trump’s campaign rallies — have required those who come in their doors to promise not to sue if they contract the virus. But a Republican proposal would offer a much bigger shield: It would provide five years of legal protection for businesses, hospitals, schools and nonprofits that make “reasonable efforts” to comply with government standards to protect their workers and customers from coronavirus-related lawsuits.

Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, said lawsuits have already been filed, and the number will grow as the economy continues to reopen.

“The right thing to do is provide an incentive for employers and universities to make sure they are adopting the right public health measures and give them the confidence that, having done so, they are not going to be dragged into court and second-guessed years from now,” he said.

The Republican proposal would funnel all coronavirus-related work claims into the federal courts, where plaintiffs would have the right to bring personal injury and medical liability suits until 2024, or the coronavirus is no longer a public health emergency, whichever comes first.

But those suits would face a high bar. Plaintiffs would need to prove that their illness resulted from gross negligence or willful misconduct on the part of the employer, not just carelessness or a lack of resources, like protective equipment. It would also limit lawsuits relating to coronavirus testing and personal protective equipment, if that equipment meets the standards of the Food and Drug Administration.

Damages would be capped, and there is a provision that would make some employees think twice about suing: Those who bring claims without merit could be subject to punitive damages and civil penalties of up to $50,000.

Many unions and workers’ rights advocates have objected to the proposal, saying that it would result in negligent behavior on the part of businesses and schools and lead to more coronavirus cases and more deaths.

Credit…Erin Schaff/The New York Times

The issue remains a contentious one in Washington, even as Senator Mitch McConnell, the majority leader and a Republican of Kentucky, insists that he will not allow any legislation to pass without the protections he has outlined.

“This is not just liability protection for businesses — they’re included along with everyone else dealing with this brand-new disease,” Mr. McConnell told CNBC late last month. “Unless you’re grossly negligent or engage in intentional misbehavior, you’ll be covered. And it will be in a bill that passes the Senate.”

The White House has been noncommittal, however. President Trump has said he is focused on eviction protections and unemployment benefits. And in a briefing on July 31, the White House press secretary, Kayleigh McEnany, said a liability protection provision was Mr. McConnell’s priority and reiterated Mr. Trump’s focus on unemployment.

However, an aide to Mr. McConnell said on Wednesday that the White House had indicated that it also viewed liability protection as a “red line” that must be part of any agreement.

Congressional Democrats have argued that the administration should focus instead on strengthening workplace protections through the Occupational Safety and Health Administration, and it remains unclear whether they could be enticed to accept some version of a liability waiver.

House Speaker Nancy Pelosi said last month that a liability shield could force workers to choose between their health and their financial well-being.

“If you get sick, you have no recourse because we’ve given the employer protection,” Ms. Pelosi, Democrat of California, said on “Face the Nation” on July 26. “And if you don’t go to work because you’re afraid of being sick and you have that job opportunity you don’t get unemployment insurance. This is so unfair.”

Polls have shown conflicting results on the public’s embrace of such a shield. A survey for the American Association for Justice, a group representing plaintiffs’ lawyers, showed nearly two-thirds of the public opposed such protections, while a U.S. Chamber of Commerce-funded poll found that 61 percent supported congressional protections from coronavirus-related lawsuits.

Julia Duncan, the senior director of government affairs at the American Association for Justice, said liability protections would take away an important tool for some of the country’s lowest-paid workers, who are disproportionately people of color, to secure more protections from big employers such as Amazon, Tyson Foods and McDonald’s.

“Bringing a lawsuit is the only leverage they have to say, ‘I would like to be treated safer, I would like to be provided protective equipment, I would like to be provided time to wash my hands,’” Ms. Duncan said. “And if these lawsuits go away, companies like Amazon and Tyson are going to be able to do anything and not be held to account.”

Other critics of the proposal say it could infringe on the rights of states, which typically regulate these kinds of legal protections. Many states, including Kentucky, Alaska and Missouri, have already expanded legal protections for businesses or offered expanded workers’ compensation to essential workers who contract coronavirus at work.

“Whatever happened to conservatives’ belief in states’ rights?” Amy Dru Stanley, a history professor at the University of Chicago, wrote in an op-ed in The Washington Post.


Credit…Stefani Reynolds for The New York Times

Opponents of the provision, including the American Association of Justice, also argue that the United States has not yet seen a profusion of coronavirus-related lawsuits, because the requirements for bringing such a suit are already high. Companies that act reasonably are protected from such lawsuits, and plaintiffs have to prove that they contracted the coronavirus at the place of business, not somewhere else, they say.

“I think the purpose of this bill, to inoculate employers from this pandemic of litigation, sounds like a solution in search of a problem,” said Paul Matiasic, a lawyer who is representing a widow, whose husband worked at a Safeway distribution center and died after contracting the virus, in a case against the grocery chain. “I think trial lawyers have been very discerning in terms of what cases they’ve brought.”

A widely cited tally kept by the law firm Hunton Andrews Kurth shows that through Aug. 3 there have been nearly 4,000 legal complaints related to Covid-19, including disputes over business interruption insurance and rent delinquencies. So far, just 75 of those have been related specifically to exposure to Covid-19 at work or wrongful death. However, that number fails to capture workers’ compensation insurance claims that employees are filing when they get sick, according to Torsten Kracht, a partner at the firm.

Mr. Bradley, the Chamber of Commerce vice president, said some trial lawyers had already started advertising about coronavirus-related lawsuits. “You’re not advertising to attract clients to sue someone unless you think there’s an opportunity to sue,” he said.

Ms. Duncan, of the trial lawyers group, said the protections in the Republican proposal — although confined to coronavirus cases — would be a victory for businesses seeking to take liability cases away from the states. “If they could get a sweeping corporate federal immunity language enacted, albeit using this specific crisis to do it, they will all of a sudden achieve this thing they wanted for 30 years,” she said.

The fight over liability protection follows battle lines drawn decades ago between the business associations and the Republican Party on one side, and trial lawyers, unions and Democrats on the other. But this time it has drawn schools and universities into the mix.

In early July, the School Superintendents Association, the National School Boards Association and the Association of Educational Service Agencies sent a letter to Congress arguing for the liability protections.

“Any such litigation would disrupt the school district’s budget, a budget already likely to have been squeezed in response to the pandemic and related state and local funding cuts,” the letter said.

Luke Broadwater and Emily Cochrane contributed reporting.

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Businesses Thought They Were Covered for the Pandemic. Insurers Say No.

When the Great Lockdown started in Michigan, Nick Gavrilides closed the dining room of his Soup Spoon Cafe in Lansing, had some farewell beers with his workers and set to work on an insurance claim.

He had paid for business interruption insurance, a type of coverage that replaces a portion of a firm’s lost revenue when a disaster forces it to suspend operations, and was expecting his carrier, Michigan Insurance Company, to cover at least some of his losses. He didn’t get a cent.

“At first I thought, OK, we’re toast, this is it,” Mr. Gavrilides said. Then he sued.

Since the pandemic hit the United States this year, thousands of business owners like Mr. Gavrilides have discovered that the business interruption policies they bought, and have been paying thousands of dollars in annual premiums to sustain, won’t pay them a thing — just as they are struggling through the biggest business interruption in modern memory.

Now, many of them — from proprietors of gyms and dental practices to high-profile restaurateurs including the Chez Panisse owner Alice Waters, the owner of Cheers in Boston and even a National Basketball Association team — are taking their insurers to court, hoping to force them to cover some of the financial carnage. So far, more than 400 business interruption lawsuits have been filed, according to insurance lawyers.

“I think business interruption claims should be paid when business is interrupted,” Mr. Gavrilides said.

Insurance companies don’t see it that way. Most business interruption policies include highly specific language stating that for a claim to be paid out, there has to be “direct physical damage” — say, a flood that washes away a building or a fire that burns down inventory, forcing a business closure.

On top of that, after SARS swept through Asia nearly two decades ago and caused widespread economic damage, many insurers began to write in language that excluded business interruption caused by viral epidemics. For instance, Mr. Gavrilides’s policy states that the insurer “will not pay for loss or damage caused by or resulting from any virus, bacterium, illness or disease.”

Insurers say they aren’t being stingy; they simply don’t have enough capital to cover all coronavirus-related claims and would suffer enormous losses if they had to pay out.

The industry’s position hasn’t deterred business owners. Some plaintiffs are arguing that the pandemic calls for new interpretations of what “direct physical damage” means for their business. Others are highlighting the spillover effects of closures on local economies.

Credit…Matt Stone/MediaNews Group, via Boston Herald

When the governor of Louisiana banned gatherings of more than 250 people in March, John W. Houghtaling II, a New Orleans lawyer and veteran of the insurance wars that followed Hurricane Katrina in 2005, didn’t wait for his client’s insurance claim to be denied before suing. Mr. Houghtaling represents Oceana Grill, a 500-seat restaurant that is insured by an underwriting group with Lloyd’s of London, the insurance marketplace.

“We have reason to believe that Lloyd’s took premiums without the intention of providing the indemnity paid for,” he said.

The lawsuit seeks court affirmation that the insurer must cover Oceana Grill’s lost revenue because the restaurant paid for a policy that covers risks from all pathogens except those introduced through “terrorism or malicious use.” It also argues that the coronavirus contaminates surfaces that can be difficult to clean in New Orleans’s hot, muggy climate, causing “real physical loss and damage.” The city’s mayor, LaToya Cantrell, cited the virus’s propensity to cause such property damage in an emergency proclamation the day the lawsuit was filed.

Lloyd’s has argued that Oceana Grill’s claims are premature and hypothetical. A spokesman declined to comment beyond the court filings. A hearing on whether to dismiss the lawsuit is scheduled for Aug. 20.

Mr. Houghtaling, along with big-name restaurateurs such as Daniel Boulud, Thomas Keller, Wolfgang Puck and Jean-Georges Vongerichten, formed the Business Interruption Group in April to push the insurance industry to pay claims. To draw attention to the matter, the group has advertised on billboards in Times Square and is supporting legislation that would allow insurers that paid business-interruption claims, regardless of policy language to the contrary, to receive reimbursements from the federal government.

But so far, it’s not looking good for the plaintiffs.

On July 1, a county circuit judge threw out Mr. Gavrilides’s case, one of the first to be decided anywhere. Judge Joyce Draganchuk, ruling from the bench in a Zoom hearing, said that for coverage, there had to be tangible damage, something “that alters the physical integrity of the property.”

Both the Soup Spoon Cafe and the Bistro, another restaurant Mr. Gavrilides owns in Ingham County, Mich., were in mint condition, so they didn’t qualify. The judge left little ambiguity, repeating the basis of her decision several times, and said there was no point in filing an amended complaint.

Mr. Gavrilides’s lawyer, Matthew J. Heos, said he has filed an appeal. In the meantime, Mr. Gavrilides, who pays an annual premium of $12,002 for his policy, is staying afloat with a loan from the federal government’s Paycheck Protection Program.

Dozens of minor-league baseball teams have sued Philadelphia Indemnity Insurance Company and others, saying the cancellation of their season qualifies them for business-interruption payments. Minor-league teams normally get their players from Major League Baseball, but none materialized this year. Some lease their stadiums from the cities they play in, and, with no revenue, they can’t make their lease payments. That, in turn, could threaten municipal bond payments and even the urban renewal plans that rely on minor-league baseball in some places.

A spokesman for Philadelphia Indemnity, Bill Procopio, said the company could not comment on pending litigation. The lawsuits are now pending in three federal courts.

The N.B.A.’s Houston Rockets have sued Affiliated FM Insurance Company in a state court in Rhode Island, where the insurer’s parent, FM Global Group, is based. The N.B.A. cut short its season this year, but the Rockets were hit especially hard when Houston emerged as a Covid-19 hot spot. The Toyota Center, where the Rockets play, is a co-plaintiff, having had to cancel rodeos, concerts, a barbecue cook-off and other events as well as basketball. The lawsuit said the loss of the arena was itself a form of “physical damage.”


Credit…Thomas Shea/USA Today Sports, via Reuters

“The property has been impaired,” it said. “The loss of functionality is no less physical than the impact of a property having lost its roof to a tornado or hurricane.” A spokesman for FM Global, Steven Zenofsky, said the company could not comment on the legal dispute, which remains pending.

Many insurance executives argue that pandemics are uninsurable. At its most basic, insurance involves the efficient pooling of risks, so that everybody in a pool pays premiums but only a few have claims. That way, the many who have no losses can subsidize the few who do. That principle can’t work in a sweeping pandemic shutdown, where virtually everybody has a loss.

The American Property Casualty Insurance Association has estimated that if insurers were required to cover all U.S. business interruption losses tied to the shutdowns, regardless of policy exclusions — something proposed by lawmakers in some states — it would cost $1 trillion a month.

The insurance industry could buckle under the strain of having to pay for even a portion of that amount, said Sean Kevelighan of the Insurance Information Institute, a nonprofit industry group. “Only the government has the capacity to provide relief to businesses” in a pandemic, Mr. Kevelighan added.

There are already proposals for federal involvement in future pandemics. Representative Carolyn B. Maloney, a Democrat of New York, has introduced legislation that would create a federal pandemic reinsurance program, modeled after the Terrorism Risk Insurance Act, which she sponsored after the terrorist attacks of 2001.

Reinsurance is widely used by insurers to keep their exposure to risks from growing too large or concentrated; the insurers pay reinsurers to take over the payment of some of their expected claims. But losses from terrorism or pandemics are too big for existing reinsurance companies to take on, which is why Congress is considering a federal version.

Ms. Maloney’s bill would bar insurers from excluding viral epidemics from coverage. In future epidemics, they and the government would each pay a portion of the claims upfront. After that, the insurers would reimburse the government for its outlays over many years.

Evan G. Greenberg, the chief executive of the insurance giant Chubb Limited, has put forward another proposal. His plan would divide the market into two segments, one for small businesses and the other for medium-to-large businesses.

Small businesses would get a simple program that would replace a portion of each company’s payroll quickly. Buying coverage would be mandatory, unless a company opted out in writing. For larger companies the government would create a reinsurer, Pandemic Re. Insurance companies would write pandemic insurance, charging market-based premiums, then transferring most of the risk and the premiums to Pandemic Re.

“It’s a total free-market program,” Mr. Greenberg said. Companies could decide whether or not to participate. “But if you don’t,” he said, “don’t come to the government asking for a handout.”

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