On The Money: Trump orders aides to halt talks on COVID-19 relief | Powell warns of ‘tragic’ spiral of layoffs without further aid | Biden: ‘The President turned his back on you’

On The Money: Trump orders aides to halt talks on COVID-19 relief | Powell warns of ‘tragic’ spiral of layoffs without further aid | Biden: ‘The President turned his back on you’

Happy Tuesday and welcome back to On The Money, where we’d like to ask 2020 to chill out. 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—Trump orders aides to halt talks on COVID-19 relief: President TrumpDonald John TrumpState Department revokes visa of Giuliani-linked Ukrainian ally: report White House Gift Shop selling ‘Trump Defeats COVID’ commemorative coin Biden says he should not have called Trump a clown in first debate MORE said Tuesday that he has instructed his top aides to stop negotiating with Speaker Nancy PelosiNancy PelosiRepublican COVID-19 outbreak rocks the 2020 race Pelosi suggests Trump setting ‘dangerous’ example with quick return to White House Speaker Pelosi, House Democrats leave town, fail the American people MORE (D-Calif.) on future coronavirus stimulus legislation until after the November election, a risky move just weeks before voters head to the polls.

  • Trump, who is himself currently being treated for COVID-19, accused Pelosi in a series of tweets Tuesday afternoon of “not negotiating in good faith” and seeking “bailouts” for states he says are poorly run by Democratic officials.
  • “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted.

The message marked a sharp reversal for the president, who just three days earlier had urged leaders of both parties to come together to finalize an agreement that can hit his desk before the Nov. 3 elections. The Hill’s Morgan Chalfant, Mike Lillis and Scott Wong tell us more about the stunning announcement here.

The strategy:

The divides: The president singled out one area of the talks where both sides have remained far apart for weeks: help for state and local governments. Pelosi is seeking more than $430 billion for those localities, while Republicans have rejected that figure as far too high, wary that Democrats simply want to rescue blue states facing budget crunches as the result of policy decisions made before the pandemic started.

The danger: The strategy is a risky one. Millions of Americans remain out of work; thousands of businesses are on the brink of collapse; the major airlines have furloughed tens of thousands of employees in recent days; and American consumers have been wary of returning to restaurants, theaters and public transit, even in regions where they’ve reopened.

Powell warns of ‘tragic’ spiral of layoffs without further aid: Trump’s decision to blow up negotiations came hours after Federal Reserve Board Chair Jerome Powell warned that a failure to provide further support for the coronavirus-wracked economy could lead to a downward spiral of layoffs and economic decline.

In a Tuesday speech to the National Association of Business Economics (NABE), the Fed chief urged Congress and the White House to strike another deal on fiscal support as the U.S. economy continues to suffer from high unemployment and low demand due to the pandemic.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth,” Powell said.

“Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.”

I have more on Powell’s unheeded warning here.

Read more: 

LEADING THE DAY

Trump administration to impose new rules targeting H-1B visas: The Trump administration announced additional immigration reforms on Tuesday aimed at making it more difficult for skilled foreign workers to acquire visas.

The changes are the latest effort by the Trump administration in recent months to crack down on the use of visas as part of its broader attempt to limit the flow of foreign workers.

  • The Department of Homeland Security (DHS) is expected to publish regulations targeting H-1B visas that are granted to skilled workers and are common in the tech industry. Recipients can typically stay in the United States for multiple years.
  • The rules, which will go into effect in 60 days, would heighten requirements for businesses that hire foreign workers on H-1B visas, according to details reviewed by The Hill. The changes may be challenged in court.
  • The updated regulations redefine “specialty occupations,” limit the validity of an H-1B visa to one year for a worker placed at a third-party worksite, and increase enforcement tools to police companies that do not abide by H-1B rules or cooperate with site visits.

The Hill’s Brett Samuels and Alex Gangitano walk us through the rules here.

US trade deficit rose in August to highest level since 2006: The U.S. trade deficit in goods and services rose 5.9 percent in August, climbing to its highest level in 14 years, according to data released Tuesday by the Census Bureau.

  • The difference in value between the goods and services the U.S. exported and imported in August totaled $67.1 billion, up $3.7 billion from a revised total of $63.4 billion in July, according to the Census Bureau. 
  • The August 2020 trade deficit was the highest since August 2006.

The new figures are the latest window into the impact of the coronavirus pandemic on U.S. production. I break down the figures here.

GOOD TO KNOW

  • President Trump and Democratic nominee Joe Biden are tied on the question of who voters trust to better handle the economy, while Biden leads Trump overall in terms of who voters plan to support in the November election, according to a new poll.
  • The House Judiciary panel on antitrust released its long-awaited report on competition in digital marketplaces Tuesday after multiple delays and a rocky effort to secure bipartisan support for its proposals.