The Washington PostDemocracy Dies in Darkness

The Finance 202: There's a new bipartisan relief proposal on the table. But it's far from a done deal.

with Brent D. Griffiths

The bipartisan group that has spent weeks negotiating a new round of economic relief forged a breakthrough over the weekend and plans to roll out legislation today. The measure still faces an uncertain path as Congress scrambles to reach an agreement this week.

The group's new strategy calls for splitting aid measures into two packages worth a total of $908 billion. The first bill, with a $748 billion price tag, will include all the spending both sides have signed off on, including replenished funding for small-business loans, extended unemployment, money for schools and vaccine distribution.

Senators will hive off the other $160 billion into a separate bill. That measure will focus on items that continue dividing the parties, including a business liability shield and aid to state and local governments, Politico and CNN reported Sunday night.

It remains to be seen whether the strategy will draw wider support, especially from Democrats.

Last week, Senate Majority Leader Mitch McConnell (R-Ky.) floated removing the controversial items from the rest of the package. Congressional Democrats panned the idea, arguing it would leave state and local governments without critical support. 

House Majority Leader Steny H. Hoyer (D-Md.), for one, indicated Sunday that he could embrace the bipartisan group's approach. “We need to get the essential done,” he said in an interview on CNN’s “Inside Politics.” “We’ll have time to get stuff done that we didn’t include because we couldn’t get political agreement, we’ll have time to do that.”

But House Speaker Nancy Pelosi (D-Calif.) isn’t ready to give up on state and local funding. Drew Hammill, a Pelosi spokesman, cast it as a matter of public safety, as states take on the task of distributing and administering vaccines. She made the point to Treasury Secretary Steven Mnuchin in a phone call Sunday afternoon. From Hammill:

Hammill said the two are set to speak again tomorrow. 

State leaders warn they need billions more dollars to perform inoculations on a massive scale.

The leaders "say they must hire medical workers, provide community outreach and education, set up vaccination clinics and ensure storage capacity for vaccines. Some states are also concerned about having enough supplies, such as gloves and gowns, to protect health-care workers as well as people getting vaccinated,” the Wall Street Journal’s Stephanie Armour and Scott Calvert report.

“Officials in several states said they would spend whatever is needed to get residents vaccinated. Some said that might force spending cuts in areas like education, unless Congress provides additional funding or the federal government reimburses a large chunk of their rollout costs.”

Officially, lawmakers have until Friday to come to an agreement and pass it before quitting town for the year. President Trump signed a one-week extension of government funding late Friday to give Congress a little more time to agree on a long-term funding measure and the relief package, which probably would move together. 

Sen. Joe Manchin III (D-W.Va.), a member of the bipartisan group, said the negotiators are trying to help Americans persevere through “the toughest first quarter of our country that weve ever faced. … The spirit of compromise is this: Everybody’s not going to get what they want.”

Manchin said he isn’t assured the plan will succeed. “There’s no guarantee,” he said on “Fox News Sunday.” “There’s 535 people that have to vote, 535. I cant guarantee theyre all going to vote for it and pass it. But I can tell you one thing: What’s the alternative? What are you going to?”

Russian hack

Russian spies behind massive hack of Treasury and Commerce departments.

They also breached a top cybersecurity firm: “The FBI is investigating the campaign by a hacking group working for the Russian Foreign Intelligence Service, SVR. The breaches have been taking place for months and may amount to an operation as long-running and significant as one that occurred in 2014-2015,” Ellen Nakashima reports.

“The group, known among private-sector security firms as APT29 or Cozy Bear, also hacked the State Department and the White House during the Obama administration. All of the organizations were breached through a network management system called Solar Winds, according to three people familiar with the matter. … Solar Winds could not immediately be reached for comment.”

  • Solar Winds is ubiquitous: “The company says on its website that its customers include most of America’s Fortune 500 companies, all top ten U.S. telecommunications providers, all five branches of the U.S. military, the State Department, the National Security Agency, and the Office of President of the United States,” Reuterss Christopher Bing, who initially broke the story of the hack, reports.

Coronavirus fallout

Shipments of Pfizer and BioNTech’s coronavirus vaccine are packed into boxes and loaded onto trucks at the manufacturing facility in Kalamazoo, Mich. (Video: The Washington Post, Photo: AP/The Washington Post)
Vaccines begin to arrive in states.

The historic moment is months in the making: “Nearly 3 million doses of the Pfizer-BioNTech vaccine are expected to arrive at 145 facilities [today], marking the beginning of a massive logistical effort to stop the rampant spread of the virus, which has so far killed more than 298,000 Americans. The vaccine will arrive at nearly 500 additional sites on Tuesday and Wednesday,” Paulina Firozi, Meryl Kornfield and Josh Dawsey report.

“But even as state officials scrambled to distribute the first doses, they criticized the federal government for a lack of transparency and limited financial help, warning that both could hamper efforts to quickly vaccinate the most vulnerable populations, including health-care workers and the elderly.”

  • There are already concerns that health passport apps could unfairly exclude people: “In the coming weeks, major airlines including United, JetBlue and Lufthansa plan to introduce a health passport app, called CommonPass, that aims to verify passengers’ virus test results — and soon, vaccinations. The app will then issue confirmation codes enabling passengers to board certain international flights … The digital passes also raise the specter of a society split into health pass haves and have-nots, particularly if venues begin requiring the apps as entry tickets. The apps could make it difficult for people with limited access to vaccines or online verification tools to work or visit popular destinations,” the New York Times's Natasha Singer reports.

BioNTech CEO is looking to boost production: “Ugur Sahin said the biggest challenge facing it and partner Pfizer Inc now that their vaccine is authorized for use in the United States will be to scale up manufacturing to meet huge demand … One way he hopes to boost supply would be by bringing on earlier than projected the 750 million-dose-a-year plant BioNTech bought from Novartis AG in Marburg, Germany,” Reuters's Michael Erman reports.

More from the U.S.:
  • Nearly 300,000 people have died: “It took 2½ months for the virus to claim its first 50,000 Americans, then just one month for the death toll to climb to 100,000. The pace of death eased somewhat with warmer weather and more-concerted efforts to encourage mask use … Between late September and mid-November, the death tally climbed from 200,000 to 250,000. Now it has nearly reached the 300,000 marker in less than half that time — even though treatment of the most severe cases has improved,” Marc Fisher, Scott Wilson and Arelis R. Hernández report.
  • Trump reverses plan for White House staff to to get the vaccine first: “The shift came just hours after the Times reported that the administration was rapidly planning to distribute the vaccine to its staff at a time when the first doses are generally being reserved for high-risk health care workers,” the Times's Annie Karni and Maggie Haberman report.
Around the world:
  • The prime minister of eSwatini has apparently become the first head of state to die from covid-19: “A statement from country’s deputy prime minister said that Ambrose Dlamini had died ‘while under medical care in a hospital in South Africa.’ The 52-year-old tested positive for the coronavirus one month ago, according to Reuters, and at the start of December was moved to South Africa so that doctors there could ‘guide and fast track his recovery,’” Antonia Noori Farzan reports.
  • Germany will implement Christmas-related restrictions: “Under the policies, which take effect next week, most retail stores except those selling food must close and schools must pivot to virtual learning. Gatherings are limited to five people from no more than two separate households, though on Christmas each household will get a temporary reprieve and be allowed to host up to four adults,”  Antonia Noori Farzan reports.

The transition

The Fix’s Eugene Scott analyzes some of President-elect Joe Biden’s Cabinet picks and why he is under ongoing pressure to make more diverse picks. (Video: The Washington Post)
CEOs want to see to see Biden go slow on regulations.

Here's what else top executives told the Wall Street Journal: “They advised the incoming administration to find productive ways to re-engage with allies and international organizations … Second, a little less disruption, please. Companies, just like stock markets, like consistency and predictability, not big swings in policy,” the WSJ reports.

“The CEOs advised Biden to go slow on raising corporate taxes (no surprise there) and on reinstituting regulations cut by the Trump administration. (Biden is looking at consumer finance and energy.) Business knows the policy landscape will be changing under a new president, but the CEOs asked for moderation and a long-range plan.”

Some of Biden's Cabinet picks are frustrating his own party: “Biden's decision to fill his White House and Cabinet with longtime colleagues has led to frustration from liberals, civil rights leaders and younger activists, who worry he's relegating racial minorities to lower-status jobs while leaning on Obama-era appointees for key positions,” Seung Min Kim and Annie Linskey report.

“Biden’s Cabinet process has also discomforted some allies on the Hill, who say senators from his own party have not been sufficiently consulted about picks, even though Biden will need influential Senate Democrats to help steer nominees through the confirmation gauntlet. Senior Democratic senators have gotten little or no advance warning about the president-elect’s selections, according to a half-dozen senior congressional officials and others familiar with the process.”

Market movers

The Fed’s nightmare isn’t over yet.

The jobs outlook continues to look dour: “The Federal Reserve will start confronting the case for more stimulus to support the U.S. economy on Wednesday as it holds its final policy meeting of a truly momentous year,” Bloomberg Newss Steve Matthews reports.

“The central bank in Washington, one of at least 16 monetary institutions worldwide scheduled for a decision this week, now has the specter of a marked slowdown in the labor-market’s rebound to consider after the latest jobs data for November. … That may push the Federal Open Market Committee to debate changes to its bond-buying program or alter its guidance for future purchases, Fed watchers say.”

Mutual funds bleed as ETFs triumph: “The arms race between mutual funds and their exchange-traded brethren turned into a beat-down in 2020,” Bloomberg News’s Katherine Greifeld reports.

“Roughly $427 billion has poured into U.S. exchange-traded funds this year, divided almost evenly between equity and fixed-income funds, according to Bloomberg Intelligence data. Meanwhile, mutual funds have bled roughly $469 billion of assets in 2020, on track for the worst year on record in Investment Company Institute data going back to 1990.”

Roblox delays IPO amid huge swing: “The gaming company that had been preparing to go public this month, has decided to delay its initial public offering until next year, in a sign that the enthusiastic market for I.P.O.s by DoorDash and Airbnb this past week has made it difficult to price shares accurately,” the Timess Kellen Browning reports.

“A slew of companies have rushed to go public before the end of the year. But the head-turning results have raised concerns about a new stock market bubble and prompted questions about whether the valuations of the unprofitable start-ups were divorced from reality.”

Pocket change

BlackRock signals it will back more shareholder votes on climate change.

Investment pressure on corporations looks to be increasing: “In the past week, Exxon Mobil was targeted by activist investors, as well as CalSTRS, one of the nation’s largest pension funds. New York State’s $226 billion pension fund announced a plan to potentially divest from oil and gas stocks in the years ahead. The world’s largest money manager, BlackRock, issued an update to its approach to engaging with corporations, indicating it will be more inclined to vote in favor of shareholder resolutions, and against boards of directors at companies,” CNBCs Eric Rosenbaum reports.

“While that BlackRock strategy change … may seem to be the mundane one among recent climate actions in the market, impact investing experts say that ahead of the 2021 annual shareholder meeting season, the $7 trillion fund manager’s plans represent an important change.”

AstraZeneca makes a $39 billion play to expand in immunology: “The British drugmaker has agreed to buy U.S. drugmaker Alexion Pharmaceuticals in its largest ever deal, diversifying away from its fast-growing cancer business in a bet on rare-disease and immunology drugs,” Reuterss Ludwig Burger reports.

“Alexion’s best-selling drug is Soliris, used against a range of rare immune disorders including paroxysmal nocturnal hemoglobinuria (PNH), which causes anemia and blood clots, and whose revenue rose 3.6% in the first nine months to $3 billion.”

A growing number of Silicon Valleys exes live in Texas: “Silicon Valley has been the epicenter of the tech industry for decades, starting in 1938 when Bill Hewlett and David Packard started tinkering in a Palo Alto garage,” CNN Businesss Clare Duffy reports. But that may be changing.”

“Perhaps the most striking evidence of that: A descendant of the company they founded, Hewlett-Packard Enterprise, will move its headquarters to Texas. On Friday, another longtime Silicon Valley stalwart, Oracle, announced plans to join them, saying it will relocate its headquarters to Austin. A string of high profile tech investors and executives are leaving San Francisco, too: Last week, Elon Musk said he has moved to Texas after selling his Bel Air homes earlier this year.”

CNN Ratings Surge as Network Boss’s Fate Is Uncertain (WSJ)

Daybook

Tuesday:

  • Slack CEO Stewart Butterfield and Box CEO Aaron Levie headline a Post event on the future of work
  • Eli Lilly CEO David Ricks speaks during a Post event
  • A Senate Commerce subcommittee holds a hearing on how the pandemic has affected the live-entertainment industry
  • A Senate Commerce subcommittee holds a hearing on the venture capital gap that exists in different regions throughout the country

Wednesday:

  • The Feds Federal Open Market Committee (FOMC) begins its two-day meeting

Thursday:

  • Fed Chair Jerome H. Powell meets the press after the FOMC meeting concludes
  • The Labor Department reports weekly jobless claims

Friday

  • Fed Governor Lael Brainard gives a speech about climate change and financial regulation at the Center for American Progress

The funnies

Bull session

"Saturday Night Live" featured Anthony S. Fauci, played by Kate McKinnon, and Deborah Birx, played by Heidi Gardner, in a vaccine-themed cold open on Dec. 12. (Video: The Washington Post)
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