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On The Money: Unemployment benefits to expire as coronavirus talks deadlock | Meadows, Pelosi trade criticism on stalled stimulus talks | Coronavirus recession hits Social Security, Medicare, highway funding

On The Money: Unemployment benefits to expire as coronavirus talks deadlock | Meadows, Pelosi trade criticism on stalled stimulus talks | Coronavirus recession hits Social Security, Medicare, highway funding
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Happy Friday and welcome back to On The Money, where we’re wishing you a safe and restful weekend. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—Unemployment benefits to expire as coronavirus talks deadlock: Enhanced unemployment benefits are set to expire as congressional negotiators are deadlocked over a coronavirus relief deal.

The additional $600 a week in unemployment insurance that Congress provided in late March will sunset on Friday at midnight, dealing a significant financial blow to millions of jobless Americans amid a weakening labor market.

  • Lawmakers had hoped the deadline would result in the kind of eleventh-hour agreement that was once commonplace in Washington. 
  • But in a sign of how far apart negotiators are, the Senate left town for the week on Thursday, ensuring Congress will careen over the fast-approaching unemployment cliff.

"I think this is something that we saw the deadline coming and knew that we needed to take action. We haven't been able to reach consensus and that's unfortunate, but we need to respond and people expect us to," said Sen. Lisa MurkowskiLisa Ann MurkowskiBiden says GOP senators have called to congratulate him COVID-19 relief picks up steam as McConnell, Pelosi hold talks McConnell in tough position as House eyes earmark return MORE (R-Alaska).

The Hill’s Jordain Carney tells us what went wrong.

“This is a five-alarm fire.” The consequences of inaction are severe: After trending downward since March, unemployment claims rose for the second week in a row, according to Labor Department data released Thursday morning. Roughly 30 million Americans are on some form of unemployment insurance.

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  • Underscoring the economic damage caused by the coronavirus, U.S. gross domestic product contracted by a 32.9 percent annual pace in the second quarter, 
  • With coronavirus cases climbing across the country, economists warn that the U.S. isn’t out of fiscal danger.

Sen. Ron WydenRonald (Ron) Lee WydenHillicon Valley: Government used Patriot Act to gather website visitor logs in 2019 | Defense bill leaves out Section 230 repeal, includes White House cyber czar position | Officials warn hackers are targeting vaccine supply chain Government used Patriot Act to gather website visitor logs in 2019 Despite veto threat, Congress presses ahead on defense bill MORE (Ore.), the top Democrat on the Senate Finance Committee, lamented that “the economists, the people who aren’t political figures, told us ... this is a five-alarm fire.”

But bipartisan negotiators remain at odds: 

  • Democrats want to continue the $600 per week unemployment boost that most Republicans oppose. 
  • The administration wants to switch to a wage-based match, something Democrats and unemployment experts say is unfeasible given how long it would take overburdened state offices to calculate the changes for millions of recipients.

Meadows, Pelosi trade criticism on stalled stimulus talks:  Without any progress to tout, White House chief of staff Mark MeadowsMark Randall MeadowsAlyssa Farah resigns as White House communications director Trump hits Barr over voter fraud remarks: 'He hasn't looked' Trump had tense meeting with Barr after statement DOJ found no widespread election fraud: reports MORE accused Democrats of playing politics in coronavirus stimulus negotiations during an appearance in the White House briefing room Friday, criticism that was swiftly dismissed by Speaker Nancy PelosiNancy PelosiBiden backs 0B compromise coronavirus stimulus bill US records over 14 million coronavirus cases On The Money: COVID-19 relief picks up steam as McConnell, Pelosi hold talks | Slowing job growth raises fears of double-dip recession | Biden officially announces Brian Deese as top economic adviser MORE (D-Calif.) on Capitol Hill.

The sharp exchange of words across the nation’s capital underscored the current gulf between White House and congressional negotiators on a fifth relief package, which economists say will be critical to boosting the ailing U.S. economy in the midst of the pandemic. The Hill’s Morgan Chalfant and Mike Lillis have more here.

LEADING THE DAY

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Coronavirus recession hits Social Security, Medicare, highway funding: The coronavirus recession is taking an axe to revenue streams for key government programs like Social Security, Medicare and highway infrastructure.

The high rate of unemployment during the pandemic means fewer payroll taxes are being collected to fund Medicare and Social Security and less driving means the federal gas tax isn’t bringing in as much money for the Highway Trust Fund as it normally does.

Many of those programs, which Congress established with dedicated funding, were already on borrowed time before the pandemic hit, but the record economic downturn in the second quarter and the deteriorating labor market are accelerating their decline.

  • The Social Security retirement fund was previously projected to run out of money in 2036, according to the Penn Wharton Budget Model. Now, a worst-case pandemic scenario could bump that up to 2032.
  • The Highway Trust Fund, which was already set to run dry in 2022, is now on track to empty its tank next year, according to the Committee for a Responsible Federal Budget (CRFB). 
  • Funding for Medicare Hospital Insurance is expected to be depleted in 2024 instead of 2026.

The Hill’s Niv Elis has more here.

House approves $1.3 trillion spending package for 2021: The House on Friday approved a $1.3 trillion package of spending bills for the 2021 fiscal year.

The package, passed in a largely party-line 217-197 vote, included the spending bills for defense; labor, health and human services, and education; commerce, justice and science; energy and water; financial services and general government; and transportation and housing and urban development.

The House has now approved all but two spending bills, though the remaining bills are not expected to receive floor consideration.

Niv breaks it down here.

GOOD TO KNOW

  • The European economy has fallen into its worst recession on record as strict quarantine measures earlier in the year to stop the spread of the coronavirus brought economic activity to an abrupt halt.
  • House Democrats introduced a bill that would require passengers to wear masks on commercial planes and in airports to combat the coronavirus pandemic.
  • Three top Commerce Department officials have left the Trump administration in the past month to take on lobbying roles at the D.C. offices of major semiconductor companies.
  • Microsoft is in talks to purchase popular social media platform TikTok from Beijing-based company ByteDance, The New York Times reported Friday, the same day reports emerged that President Trump is considering signing an executive order requiring ByteDance to divest the U.S. portion of TikTok.