Airline Payroll Aid Blocked in U.S. House as Layoffs Pile Up

(Bloomberg) -- A last-ditch effort to pass legislation in the House to prevent massive airline layoffs was blocked on Friday, ending an attempt by House Speaker Nancy Pelosi to bypass stalled talks to agree on a stimulus package.

Representative Peter DeFazio, an Oregon Democrat who was leading the push, said Republicans halted his attempt to bring up the measure, which needed unanimous backing by all House members to pass on such short notice. Republicans said they viewed the unusual maneuver skeptically.

That effectively ended hopes until next week at the earliest for payroll assistance to struggling carriers, which have already begun laying off tens of thousands of workers.

Republicans “killed this legislation, plain and simple,” DeFazio, chairman of the Transportation and Infrastructure Committee, said on the House floor. His legislation would have provided more than $28 billion for airlines and contractors if they held off on layoffs until March 31, 2021.

The House isn’t scheduled to return to Washington until after the election. A deal could only pass with unanimous consent while members are away, although House leaders have warned they could call members back for votes, which would require a lower threshold of support to pass.

The back and forth whipsawed airline stocks, which fell early in the session and then jumped on Pelosi’s announcement that she would push for a stand-alone measure to help carriers. A Standard & Poor’s index of U.S. airlines pared gains after the aid was blocked but still advanced 2.3% at the close in New York.

Job Cuts

Payroll support of $25 billion for passenger carriers expired Sept. 30, prompting American Airlines Group Inc. and United Airlines Holdings Inc. to start laying off tens of thousands of employees.

Attempts to provide assistance to push the layoffs back for another six months have so far failed as Pelosi, the White House and Senate Republicans sought agreement on a broader relief bill.

Republicans believed the unusual process of trying to push an airline-specific bill through so quickly was unnecessarily partisan, said one GOP staffer who asked not to be named while discussing deliberations.

Democrats didn’t consult with Republicans and the bill’s budget effects hadn’t been evaluated, the person said. He called the attempt incomplete and sloppy.

Earlier Friday, Pelosi issued a statement saying an agreement on airline aid “is being reached.” After the measure was blocked, she slammed the other party.

“Again and again, Democrats offer legislation to save lives and livelihoods, only to be met by more Republican obstruction,” she said.

She had urged airlines to hold off on layoffs until lawmakers could pass an assistance bill.

Pelosi’s support of stand-alone legislation proposed by DeFazio signaled a newfound willingness to provide airline aid outside of a comprehensive economic rescue package. But it also came at a time of heavy political maneuvering during the lead-up to the November elections in which both parties are trying to blame the other for a lack of Covid-19 aid.

Hit by an unprecedented travel slump because of the coronavirus pandemic, airlines have been parking jets, paring flight schedules and asking employees to accept voluntary separation deals such as buyouts and temporary leave.

‘Cannot Wait’

“We are disheartened that Congress and the Administration have been unable to reach an agreement that would save tens of thousands of highly skilled, quality jobs in the U.S. airline industry,” said Nicholas Calio, president of Airlines for America, a trade group.

American and United said they could recall furloughed workers if Congress acted. Delta Air Lines Inc. and Southwest Airlines Co. didn’t immediately comment.

“Aviation workers cannot wait,” said Sara Nelson, president of the Association of Flight Attendants-CWA. “While Congress and the administration continue to negotiate a broader deal, we are out of time.”

Assistance to pay for airline payrolls has received widespread support. President Donald Trump and a group of Republican senators have previously said they supported the goal. White House economic adviser Larry Kudlow told reporters Friday that the chief executive officer of American Airlines called him.

“The airlines need some help,” Kudlow said.

A bill introduced by Republican senators Roger Wicker of Mississippi and Susan Collins of Maine on Sept. 21 would give passenger air carriers, cargo air carriers, and airline contractors an additional $28 billion in pandemic aid to cover payrolls.

Senate Majority Leader Mitch McConnell hasn’t said whether he supports a standalone relief bill for airlines.

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