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On The Money: Mnuchin, Pelosi reach informal deal to avoid government shutdown | Trump eviction ban tests limits of CDC authority | Initial jobless claims hit 881,000; unadjusted claims tick up

On The Money: Mnuchin, Pelosi reach informal deal to avoid government shutdown | Trump eviction ban tests limits of CDC authority | Initial jobless claims hit 881,000; unadjusted claims tick up
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Happy Thursday and welcome back to On The Money. 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—Mnuchin, Pelosi reach informal deal to avoid government shutdown: Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: Businesses, wealthy brace for Biden tax hikes | Dow falls more than 650 points as COVID-19 cases rise, stimulus hopes fade | Kudlow doesn't expect Trump to release detailed economic plan before election Overnight Health Care: US sets a new record for average daily coronavirus cases | Meadows on pandemic response: 'We're not going to control it' | Pelosi blasts Trump for not agreeing to testing strategy Gaffes put spotlight on Meadows at tough time for Trump MORE and Speaker Nancy PelosiNancy PelosiOn The Money: Businesses, wealthy brace for Biden tax hikes | Dow falls more than 650 points as COVID-19 cases rise, stimulus hopes fade | Kudlow doesn't expect Trump to release detailed economic plan before election Overnight Health Care: US sets a new record for average daily coronavirus cases | Meadows on pandemic response: 'We're not going to control it' | Pelosi blasts Trump for not agreeing to testing strategy Gaffes put spotlight on Meadows at tough time for Trump MORE (D-Calif.) have informally agreed to pursue a short-term stopgap measure to avert a government shutdown at the end of the month, sources in both parties confirmed Thursday.

  • That means the continuing resolution (CR) needed to keep the government open past Sept. 30 would be free of controversial policy riders that have derailed past funding bills, cutting the chance of a shutdown leading up to the crucial Nov. 3 elections.
  • The tentative deal also means the government funding bill and a new coronavirus relief package being negotiated between Pelosi and Mnuchin would not be part of the same talks.

The Hill’s Scott Wong has more here.

LEADING THE DAY

Trump eviction ban tests limits of CDC authority: The Trump administration’s new eviction ban faces a slew of legal and political challenges that could undercut an ambitious and unorthodox attempt to save tens of millions Americans from homelessness.

  • The Centers for Disease Control and Prevention (CDC) on Tuesday issued an order banning landlords from evicting tenants that can no longer afford to pay rent due to a pandemic-related expense or hardship through the end of 2020. 
  • That order, along with previously issued federal protections, could ensure all of the nation’s 40 million rental households keep their residences during the pandemic.

But the eviction ban is a groundbreaking test of the CDC’s power that experts say will undoubtedly prompt several legal challenges. And advocates for both tenants and the real estate industry fear that the expiration of the protections at the end of the year could create a dangerous housing crisis at the start of 2021.

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I explain why here.

Uncharted legal waters: While the ban could be a crucial lifeline for struggling renters, experts say its legal basis rests on a broad interpretation of a 1944 law.

  • The regulation cited by the CDC gives it power to take whatever action it deems necessary to stop the interstate transmission of an infectious disease.
  • “This is definitely unprecedented,” said Lindsay Wiley, a law professor and director of the health law and policy program at American University. “The CDC has really broad authority on its face, but it's never pushed the boundaries of that authority.”
  • Wiley added that the regulation in question focused mainly on efforts such as fumigation and sanitation practices, making the ban vulnerable to a legal challenge over whether the CDC exercised its power beyond the intent of Congress.

Kicking the can down the road?: The eviction ban also sets the stage for a painful start to 2021.

  • Tenants will be required to pay all of the rent due per the terms of their lease in January, a daunting and likely impossible task for many households who would benefit from the order. 
  • Landlords, meanwhile, could be hit with a steep drop in income during the no-eviction period and be forced to sell their properties or take on massive debt to weather the storm.

The solution: Avoiding a crisis in the coming months will likely rest on how much progress the Trump administration and congressional Democrats can make toward another stimulus bill. 

  • Treasury Secretary Steven Mnuchin voiced support for boosting rental assistance during testimony before a House committee on Tuesday, and Democrats have made eviction and foreclosure protections a top priority in negotiations.
  • The Democratic-controlled House passed a bill in June that would provide $100 billion in rental aid meant to cover the costs of a 12-month eviction and foreclosure ban.

Read more: Record deficit complicates GOP path to coronavirus relief

Initial jobless claims hit 881,000; unadjusted claims tick up: The Labor Department reported 881,000 new jobless claims on Thursday, a dip because of a new methodology it now uses to count seasonally adjusted claims. 

The department also reported 833,252 new jobless claims without seasonal adjustments, a tick up from the previous week of 821,591 claims. The figures overall show the toll the pandemic continues to take on the economy and the nation's workers.

The Hill’s Niv Elis breaks them down here.

Union urges Trump administration to make payroll tax deferral optional: The American Federation of Government Employees (AFGE) is urging the Trump administration to allow federal employees to choose whether to have their payroll taxes deferred.

In a letter sent Thursday to Office of Management and Budget Director Russel Vought, AFGE National President Everett Kelley asked that "employees be given the opportunity to opt in, rather than have participation be the default."

"At a minimum, federal employees should have the ability to opt out of the deferral," he said.

The Hill’s Naomi Jagoda explains why here.

GOOD TO KNOW

  • The trade deficit in July spiked 18.9 percent to $63.6 billion, the highest since July 2008 during the Great Recession, according to Commerce Department data released Thursday.
  • AFL-CIO President Richard Trumka on Thursday said an effort by major corporations to include the well-being of workers in their goals was more talk than substance.
  • The Trump administration will decline to pay tens of millions of dollars owed to the World Health Organization (WHO) in annual dues as part of the U.S.'s withdrawal from the global body, which is scheduled for next year.
  • Stocks dropped sharply Thursday, pushed downward by plunging share prices of major technology companies that had driven most of the stock market’s pre-pandemic rally and subsequent rebound. 
  • A recent study predicts that the coronavirus pandemic could hold the economy back for decades due to a lack of risk-taking and decreased economic output.
  • The Department of Justice plans to file antitrust charges against Google as soon as this month, The New York Times reported Thursday.