AAL American Airlines Group Inc

By Kristina Peterson and Alison Sider 

WASHINGTON -- House Speaker Nancy Pelosi (D., Calif.) signaled Thursday she wouldn't support a stand-alone airline relief bill without a broader coronavirus aid package, the latest twist in late efforts to pass more economic aid before the election.

Mrs. Pelosi and Treasury Secretary Steven Mnuchin were expected to talk Thursday about potential aid for airlines, which are planning deep job cuts as travel spending remains depressed due to the coronavirus pandemic.

"There is not going to be any stand-alone bill unless there is a bigger bill and it can be part of that, or it could be in addition to it," Mrs. Pelosi said of the airline aid, in remarks to reporters.

Earlier this week, President Trump ended broader negotiations between Mrs. Pelosi and Mr. Mnuchin over a multitrillion-dollar relief package and began a push to instead pass individual relief bills, including aid for airlines and another round of direct checks to many U.S. households.

"I shut down talks two days ago because they weren't working out. Now they're starting to work out," Mr. Trump said Thursday on Fox Business Network. "We're talking about airlines, and we're talking about a bigger deal than airlines," he said, mentioning the $1,200 stimulus checks to taxpayers that both parties have said they support.

Mrs. Pelosi said Thursday that Democrats were open to further talks on a broader deal, but there were few indications that such an agreement could be reached before Election Day.

"We are at the table. We told the White House we are at the table. We want to continue the conversation." She said negotiators have made some progress on possible legislative language, "so we will see how they come back," she said, without offering further details.

Senate Majority Leader Mitch McConnell (R., Ky.) said Thursday he hoped to see negotiations continue, but said the impending election was making compromise more difficult.

"We do agree another rescue package is needed. We had vast differences about how much we should spend," he said at an event in Kentucky. "I do believe we should continue to talk and try to get an outcome."

Airlines are now at the center of stimulus negotiations after months of intense lobbying for a second round of government funds to continue paying workers. Despite bipartisan support, their efforts so far haven't been enough to break an impasse over other elements of a broader pandemic relief package.

Carriers began cutting tens of thousands of workers last week as a deadline passed without any firm commitment for more government funds, but they said they would bring workers back if Congress is able to reach a deal. More broadly, data out Thursday show U.S. unemployment claims remained elevated at 840,000 last week as the labor market flashes signs of a slowdown and more layoffs become permanent.

Democrats have generally opposed passing stand-alone bills, saying that approach would leave out some of their priorities, including funding for state and local governments, food-stamp assistance and child care.

The party, however, has been willing to consider a stand-alone airline relief bill. Last week, House Democrats attempted to pass separate legislation to prevent tens of thousands of layoffs in the struggling industry, but it was blocked by Republicans, who said they hadn't had a chance to vet it. GOP lawmakers argued that the House should have advanced a separate airlines bill with bipartisan support.

On Wednesday evening, Mrs. Pelosi and Mr. Mnuchin spoke about airlines aid for about 20 minutes and agreed to talk again Thursday, according to Mrs. Pelosi's spokesman.

Last week, American Airlines Group Inc. and United Airlines Holdings Inc. said they would go forward with a total of more than 32,000 job cuts after lawmakers were unable to agree on a broad coronavirus-relief package.

Airlines received $25 billion in aid under the Cares Act passed in March. A stipulation of that aid was that the carriers couldn't lay off or furlough any workers before Oct. 1.

Airlines had hoped they would be on firmer footing by the time that assistance ran out, but travel demand hasn't bounced back. Passenger volume is down around 70% from a year ago, according to Transportation Security Administration data.

The companies have warned for months that they would need to cut staff when that date arrived unless they received another $25 billion to cover salaries and benefits through the end of March. Carriers feared that another round of assistance would be less likely if airline aid was the sole focus of legislation.

On Thursday morning, two Republican senators signaled concerns with a stand-alone package for airlines, saying it was unsustainable to continue to provide grants to maintain the industry's payroll.

"No one wants to see layoffs, but we have a responsibility to ensure that taxpayer resources are used in an appropriate and equitable manner, " GOP Sens. Mike Lee of Utah and Pat Toomey of Pennsylvania wrote in a joint statement. The two also said that a bill should not be considered without amendments, an indication they would likely block any efforts to pass it by unanimous consent.

That would make consideration of a bill more time consuming, since it would then require floor time for a debate and votes.

The Senate isn't expected to convene until the week of Oct. 19, to give several GOP senators time to recover from Covid 19. That leaves only two weeks before the Nov. 3 election, during which Republicans plan to confirm Supreme Court Justice nominee Amy Coney Barrett.

Two bills introduced last month, but not yet voted on in the Senate or House, would extend about $25 billion to airlines, specifying that most of the money come from unused allocations previously approved by Congress. The legislation Democrats put forward last week didn't include measures to repurpose existing funds.

Before Mr. Trump's intervention Tuesday, the two sides had been edging closer after the House passed a $2.2 trillion aid bill last week, down from its earlier $3.5 trillion package. The Democratic bill would provide assistance to airlines, give money to state and local governments, send another round of stimulus checks, and reinstate $600 weekly unemployment benefits, among other measures.

Mr. Mnuchin had proposed a $1.6 trillion offer last week in response. Deep disagreements remained, including how much state and local aid to include, as well as issues including Covid-19 testing, aides said.

--Gordon Lubold contributed to this article.

Write to Kristina Peterson at kristina.peterson@wsj.com and Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

October 08, 2020 13:22 ET (17:22 GMT)

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