— President Donald Trump and his top advisers are struggling to find the right way to soothe public anger over the police killing of George Floyd. Protests and rioting have swept a nation already in turmoil from a coronavirus pandemic that has killed more than 100,000 Americans and left more than 40 million unemployed. Trump hasn’t said much beyond brief condolences for the Floyd family and tweets on the protests have only fanned national outrage and done little to heal racial divisions that Trump has spent much of his adult life building his brand around. With just five months until the November election, what will the White House do for a country in dire need of leadership?
— Trump is pushing the nation to reopen in the coming weeks, as unemployment is expected to reach upwards of 20 percent in June. But altered or hidden Covid-19 data from states is hindering the ability to detect a surge of infections.
— The summer is primed to be a time for big decisions affecting the tech industry, which is facing increasing hostility from the capital and executive branch. Trump’s executive order against social media asks regulators to reinterpret a law that shields internet companies from lawsuits over content on their sites, among other asks that will revive action on and off the Hill.
THE CONTINUING ECONOMIC UNCERTAINTY
Will jobs come back? The unemployment rate could shoot north of 20 percent in the May jobs report, which will be released Friday, nearing the record 24.9 percent in 1933 during the Great Depression. Kevin Hassett, President Donald Trump’s senior economic adviser, says the number should continue to climb in June but then expects it “should start to trend down.”
With nearly 1 in 4 workers out of a job, the administration has forged ahead with plans to reopen the country, pressuring states to restart local economies and allow non-essential business to operate. Trump is betting on a swift economic rebound, with his Cabinet seizing on a recent Federal Reserve estimate that 91 percent of people who lost their jobs or were furloughed expect to return to the same employer eventually. But the sheer breadth of the business closures will likely turn many of these temporary layoffs and furloughs permanent, economists say — and leaning on the statistic as a sign of economic well-being may be misleading. Forty-two percent, or 11.6 million, of all jobs lost through April 25 due to Covid-19 will become permanent, according to research from the University of Chicago’s Becker Friedman Institute. — Rebecca Rainey
Loan forgiveness risks: The emergency pandemic-relief loan program created to avert massive layoffs at the country’s millions of small businesses is entering a perilous new phase. Borrowers in the coming months will begin to file applications to have the loans forgiven, a key selling point for employers to take the aid in exchange for maintaining payroll. Business groups warn that the process remains too complex and will lead to new frustrations for ailing employers at risk of being stuck with the debt and create unexpected problems for banks serving as middlemen in the process.
Fed stress test results: The Federal Reserve will soon announce the results of its annual stress tests, intended to measure how big banks would weather a hypothetical severe downturn. It’s no longer hypothetical given the severe economic woes amid the pandemic, so the central bank is adding some features to the exams. Depending on how the big lenders fare, the stress tests could provide a reason for the Fed to restrict dividend payments from some or all of them in an effort to get the lenders to hold onto more loss-absorbing capital. — Mark McQuillan
BILLS, BILLS, BILLS
Major lands bill vote: Senate Majority Mitch McConnell said the chamber will vote in June on a bipartisan bill, S. 3422 , that provides full, permanent funding for the popular Land and Water Conservation Fund, which uses royalties from offshore oil and gas production to support conservation projects. The bill, championed by Sens. Cory Gardner, Steve Daines and Joe Manchin , also provides billions to address the maintenance backlog on the nation’s public lands. Trump announced his support earlier this year, and a similar package in the House enjoys broad bipartisan support. Despite reticence for the measure among many Republicans, its passage is aimed at providing a win for Gardner and Daines, who are both vulnerable in the November election. — Anthony Adragna
Defense bills inching forward: After weeks of coronavirus delays, the Senate Armed Services Committee is ready to debate its version of the National Defense Authorization Act bill this month. The panel will mark up the defense policy bill the week of June 8, with the goal of passing the bill on the Senate floor before the July 4 holiday.
The House Armed Services Committee, meanwhile, hasn't nailed down a date for its markup after more than a month of delays. The 57-member panel is still sorting through how it will safely consider the defense bill. — Connor O'Brien
Appropriations schedule slips into summer: Congressional appropriators hope to launch markups in coming weeks after the pandemic upended the schedule for crafting fiscal 2021 spending bills . But the House doesn’t plan to hold any markups until Congress agrees on another round of federal coronavirus relief — which Senate Republicans aren’t in a hurry to negotiate. The Senate hopes to mark up a few bills before the July 4 recess, with most occurring after the break. — Caitlin Emma
LOOKING AHEAD TO THE NEXT STIMULUS
Agree to disagree: As all sectors of the economy continue to weather the storm caused by the coronavirus pandemic, Congress is looking to solve the problem with more money — but Democrats, Republicans and the Federal Reserve don’t yet see eye-to-eye on whether another package will be needed and when.
White House pushing to end ‘surprise’ medical bills: The yearlong battle over “surprise” medical bills is being revived in time for the next coronavirus rescue package — with major implications for the hospitals, physicians, employers and insurers that scuttled bipartisan proposals addressing the issue last year.
The White House is floating for inclusion in the next aid bill a plan that would ban health care providers from putting patients on the hook for thousands of dollars in expenses for emergency or out-of-network care — but without mandating how doctors and hospitals would recover their costs from insurers. Insurers and employers say that without a formula to resolve payment disputes, they could face costly litigation if hospitals or doctors want higher rates.
Support for the White House plan could hinge on its cost and the prospect it raises the price of health care. Though congressional scorekeepers haven't issued a formal estimate, a congressional aide said the Congressional Budget Office has advised through informal guidance that the plan would raise premiums by driving up provider rates. — Susannah Luthi
More tax breaks in the cards? There’s no shortage of tax ideas circulating for the next rescue package. One proposal that could draw bipartisan support is expanding the job-retention tax credit lawmakers created in March, by making more employers eligible and the credit more generous. But the White House seems to prefer giving a weekly bonus to workers who return to their jobs. Trump economic adviser Larry Kudlow said recently that numerous tax proposals are “in play.” But, he added: “We haven’t made up our mind on specifics yet. … We are in the assessment or reassessment period.” — Toby Eckert
Water, green energy infrastructure on tap? House leaders are expected to unveil their version of a major water infrastructure bill in the coming weeks that could form a major chunk of an economic stimulus package. The Senate Environment and Public Works Committee has already advanced its version of the measure approving new harbor, levee and dam projects, along with a drinking water bill. Committee Chairman John Barrasso has said he expects those measures, along with his highway bill, to serve as the infrastructure package Trump has asked for. There’s also pressure from rank-and-file Democrats to do more for the ailing clean energy industry, which has already lost more than 600,000 jobs during the pandemic. — Annie Snider
Pleas for telehealth policy changes: Advocates for telehealth are pressing congressional leaders to use upcoming coronavirus rescue packages to expand access to virtual visits for behavioral health services and build on earlier e-health initiatives that Congress and the Trump administration made in response to the pandemic. The overarching goal is to make permanent the temporary CMS payment increases and the removal of licensing barriers that the industry and its allies in Congress contend have held back wider adoption of virtual care. But while telehealth enjoys growing bipartisan support, cost could be a long-term obstacle. — Mohana Ravindranath
CAN'T STOP, WON'T STOP
Did you do your taxes yet? The IRS is churning toward a July 15 deadline for Americans to file their taxes. The three-month delay in the usual deadline gave both the IRS and taxpayers some breathing room as many agency workers were suspended due to the pandemic. While some work continued remotely, agency employees in several states have been called back to the office starting today, and more are expected to return to other locations in coming weeks. But there’s a lot of backlog to deal with, and summer is usually when the agency starts gearing up for the next tax filing season. — Toby Eckert
SCOTUS to rule in DACA, school choice cases: Justices are expected to decide on the legality of the Trump administration’s decision to end the Obama-era Deferred Action for Childhood Arrivals program. Another decision is expected in Espinoza v. Montana Department of Revenue, a school choice case in which three Montana families asked the court to declare that excluding religious schools from student aid programs is unconstitutional. — Nicole Gaudiano
Payday rule coming: The Consumer Financial Protection Bureau is expected this month to release a final rule to overhaul the agency’s contentious 2017 regulation reining in payday lenders — escalating a showdown with Democrats, who have called on CFPB Director Kathy Kraninger to drop all rulemaking unrelated to the virus. Democrats are also seeking an inspector general investigation into allegations of improper political influence on the drafting process for the rule, which is expected to roll back a key provision of the original Obama-era regulation that required lenders to ascertain whether borrowers had the ability to repay the loan. The increasing financial desperation of many households because of the pandemic may increase demand for the lenders, which often charge sky-high interest rates. — Mark McQuillan
‘Decision time’ looming for wars on tech: Trump issued an executive order on social media that calls for action from a variety of agencies this month: The Commerce Department’s National Telecommunications and Information Administration is supposed to ask the FCC to clarify when online companies qualify for their congressionally granted legal immunity for hosting or removing user-posted content. (It’s not entirely clear that the FCC really has the legal power to determine that.) The FTC and state attorneys general, in partnership with the Justice Department, are tasked with separately reviewing whether internet companies have deceived or been unfair to users in the way they moderate political speech. And all federal agencies have 30 days to report how much money they spend on ads and marketing on online platforms, so that DOJ can determine whether any of the platforms are “problematic vehicles for government speech.”
The House Judiciary Committee’s antitrust subcommittee may also release its long-awaited report on the tech industry in the next several weeks, Chairman David Cicilline (D-R.I.) has said.
Google antitrust cases in the offing: The Justice Department and a coalition of state AGs are likely to file antitrust cases in the coming months against Google, people familiar with the probes have told POLITICO. Attorney General William Barr said earlier this year that DOJ hopes to bring its probes to “fruition” by “early summer” — “and by fruition, I mean decision time.” — Bob King
THE STATE OF TRAVEL
A slow start for planes, trains: For most modes of transportation, summer will continue the theme set by spring as people continue to stay home. Air travel is beginning to show some signs of life, but passenger volumes were still down almost 90 percent over last year and likely will not recover much. Airlines, airports and other adjacent industries will continue to struggle with how best to inspire consumer confidence, including the potential for temperature checks, mask mandates and more. One thing that likely won't be on the table much longer is blocked-out middle seats; most of the airline industry has said that social distancing on planes won't work for long. The industry is likely to continue planning for smaller operations, which inevitably means industry-wide layoffs at the end of September, when the statutory mandate to maintain workforces will expire.
Amtrak has begun to resume some routes that had been suspended, particularly in the Northeast Corridor — but its workforce is still being eyed for cuts even as the service asks Congress for another $1.5 billion to keep the trains running.
And for automobiles a bright spot: Passenger traffic on roadways is steadily rising from its trough of 50 percent to 60 percent of normal, where it stayed for late March and much of April, and is now topping 80 percent of normal miles. — Tanya Snyder
CHINA ON THE BRAIN
Moving to revoke Hong Kong’s trade privileges: The Trump administration is looking to crack down on China after Beijing’s top legislature voted to impose national security laws on Hong Kong. Trump said he plans to revoke Hong Kong's preferential treatment as a separate customs and travel territory apart from China. The move could hurt U.S. businesses and diminishes Hong Kong's position as a global finance and trade hub, but it remains to be seen how quickly and extensively Trump's measures will be implemented. — Sabrina Rodriguez
Will China hit back at Canada, and how hard? Last week, a Canadian judge ruled the extradition case of senior Huawei CFO Meng Wanzhou will proceed, rejecting the defendant’s effort to have it thrown out. The Chinese Embassy in Ottawa called Meng’s case part of an attempt by the U.S. to bring down Huawei and other Chinese high-tech companies with Canada acting as an “accomplice." It remains to be seen how Beijing might react as Meng moves one step closer to being surrendered to the U.S. — Andy Blatchford
THE WORLD KEEPS TURNING
Eyes on automakers as USMCA implementation nears: The USMCA takes effect on July 1. Officials from the three countries argue it will offer some much-needed certainty to help recover from the pandemic, but experts say it’ll take more than the new pact, which largely preserves NAFTA, to help jump-start the economy. The auto industry, which is only just resuming operations amid the pandemic, must make some time-consuming and expensive changes this summer under the USMCA. Some automakers and other manufacturing companies are keeping an eye on Mexico, which reopens its economy today, to see if there will be any big supply chain disruptions that further hurt their businesses.
U.K. talks moving ahead: Officials from the U.S. and United Kingdom will have another two-week round of virtual negotiations starting June 15, as they try to keep moving forward at an “accelerated pace.” There’s no deadline to wrap up talks, but negotiators are expected to stay in communication this summer as they pursue a “comprehensive” trade agreement that Congress would ideally pass before summer 2021, when the trade promotion authority legislation expires. — Sabrina Rodriguez
PUTTING THE ‘S’ IN ESG: The pandemic has thrown millions of people out of work and also focused new attention on the plight of low-wage workers. Look for those trends to carry over to the priorities of sustainability-minded investors, companies and activists. Corporate sustainability commitments focused on environmental, social and governance issues, or ESG, have typically prioritized the E and G, but social factors are becoming a larger area of focus since coronavirus, analysts say. Barclay’s identified social factors as a “ core risk consideration” in light of factors like the U.N. Principles for Responsible Investment calling on signatories to address public health and inequality in responding to the crisis. — Nick Juliano
CHECKING THE WATCH
Delays mar USDA’s food box program: The Agriculture Department’s new initiative in which private companies assemble and distribute boxes of food for low-income people hurt by the pandemic runs through June 30, and the government may decide to extend the program through the end of the year. The program has stirred up some controversy as certain awardees lack direct nutrition assistance experience and have been slow to meet contract obligations. — Liz Crampton
Time to comply with investment advice rule: The SEC has set a June 30 deadline for compliance with Regulation Best Interest, a new rule that seeks to fulfill a provision of the landmark Dodd-Frank law to raise the standard of conduct for those giving retirement advice. The rule will require brokers to act in the best interest of their clients, including by mitigating — and possibly eliminating — conflicts involving how they are paid for investment recommendations they make. — Mark McQuillan
Democrats vie to challenge cannabis advocate Gardner: Endangered Republican Sen. Cory Gardner’s opponent in November will be determined on June 30. Two candidates are running in the Democratic primary: former Gov. John Hickenlooper and left-leaning former Colorado Speaker of the House Andrew Romanoff. Hickenlooper is viewed as the front-runner, both for the primary and general elections.
Gardner has emerged as a key ally of the cannabis industry but has failed to pick up any legislative victories in the GOP-controlled Senate, which is dominated by staunchly anti-marijuana lawmakers. Most recently, Gardner has been pushing for cannabis banking legislation to be included in a forthcoming coronavirus relief package. Hickenlooper has long been viewed with skepticism by the cannabis industry. Like Gardner, he opposed Colorado’s 2012 legalization referendum. He vetoed three industry-backed bills during his final year in office. — Natalie Fertig and Paul Demko