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How the Stimulus Bill Would Affect American Businesses: Live Updates

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Across the country, chains have kept open thousands of stores, even as health experts warn that the virus is likely to spread more widely in the coming weeks.

In many states and cities, governors and mayors have mandated the closure of all but the most essential stores. Several retailers — like Sears, Kmart, and Joann Fabric and Craft Stores — have provided employees with letters they can share, arguing that their businesses are essential.

That some retail stores are staying open while others have closed reflects the piecemeal approach to combating the pandemic in the United States.

There are emergency orders limiting business to essential retailers in about half the United States, but much of the South and West has no such government restrictions. The Retail Industry Leaders Association has asked the federal government for clearer guidelines.

The airline industry is poised to receive an enormous bailout as part of the stimulus bill, a draft of which sets aside around $30 billion to pay employees of passenger and cargo employees. It also provides loans to passenger and cargo carriers in addition to some tax relief.

In exchange for the aid, airlines are prohibited from stock buybacks and dividends until a year after the loan is repaid. They must also maintain current staffing levels through September.

THE CONTEXT In recent weeks, the outlook for the global aviation business has soured significantly, with major carriers like American Airlines fighting for survival and United Airlines eliminating virtually all of its international flights for April. During that time, airline executives and industry groups had been lobbying the White House and members of Congress for aid.

THE RESPONSE As executives and union officials pored over the details of the stimulus deal on Wednesday morning, the influential president of the Association of Flight Attendants union claimed victory, calling it “a rescue package for workers.”

The stimulus will allow the troubled hotel industry to gain access to loans and other support. But what remains unclear for some owners is how quickly the money will be available and whether it will be enough to help, with travel expected to be down well into the summer.

THE CONTEXT Top executives from Hilton Hotels & Resorts, Marriott International and large hotel chains met with President Trump as they watched occupancy levels at their hotels in the United States drop through the floor in recent weeks. Lobbying arms pressed lawmakers, warning of layoffs and hotel closures.

Large hotel chains have kept investors happy in recent years with dividend and share buyback programs, but they may be barred from continuing to do so until a year after they repay any money borrowed through the program. And compensation levels for top executives will be capped.

THE RESPONSE The vast majority of brand-name hotels in the country are owned either by individuals or investors, and there is worry over how much red tape these small-business owners will face in obtaining aid. And, once they get the money, there is the question of whether it will be enough to cover expenses for more than a couple of months.

“We don’t have weeks to get this done. Hotels are closing every day,” said Cecil Staton, the president and chief executive of the Asian American Hotel Owners Association, which says its members own half of the hotels in the United States. “But the real question is, do you really think travel is going to return by mid-May? We don’t.”

The Rescue Plan

The stimulus includes several tax breaks that will largely benefit businesses — although it would not necessarily get cash to the companies most in need today. For instance, the bill would temporarily make it easier for big companies to take interest deductions and would roll back losses into older tax years, potentially leading to refunds.

HOW IT COULD PLAY OUT Companies that suffer enormous losses this year would be able to deduct those against profits from the past five years, potentially wiping out their old tax liabilities and generating cash refunds. If they had losses in 2018 and 2019 to offset taxes from profits in even older years, they could get quick cash refunds. But they would not see the cash from any refunds related to this year until at least early 2021.

“It is not targeted at the companies who are most in need today, so it is not an ideal way to allocate relief resources,” said Stephen Shay, a tax law professor at Harvard and former U.S. Treasury official. “It is clearly not the best way, but it’s reasonably fast compared to some alternatives.”

Stocks on Wall Street rose on Wednesday as investors sized up a $2 trillion coronavirus rescue package intended to shore up the American economy, but the gains faded late in the day as debate over the bill continued without a vote in the Senate.

The legislation would be the biggest fiscal stimulus package in modern American history, and more than double the size of the roughly $800 billion stimulus package that Congress passed in 2009, during the last recession.

The S&P 500 climbed more than 1 percent, adding to a 9.4 percent gain on Tuesday that had come as investors anticipated that Democrats and Republicans would reach a deal over the plans.

Some of the companies expected to benefit from government help led Wednesday’s gains. Boeing was up more than 20 percent, helping lift the Dow Jones industrial average. American Airlines and Carnival Corporation both jumped more than 10 percent.

Investors have welcomed the plans, but few are willing to conclusively say that the worst of the market sell-off is over.

In the United States, widespread social distancing measures put in place to control the spread of the coronavirus have hammered consumer spending, the heart of the American economy.

Economists are expecting almost unthinkable declines in the gross domestic product in the second quarter. Analysts at Capital Economics said on Wednesday that they expected U.S. growth to fall 40 percent in the second quarter at an annualized pace, as the unemployment rate jumps to 12 percent, higher than its 10 percent peak in 2009.

The Labor Department’s weekly estimate of new claims for unemployment insurance, which will be released at 8:30 a.m. Thursday, typically draws little attention. Not this week: The report will provide some of the first hard data on the scale of the economic damage caused by the pandemic.

Citigroup economists estimate that the report could show that four million people applied for benefits last week. Other forecasters put the number a bit lower. But there is wide agreement that the total will dwarf the previous record of 695,000 new claims, from October 1982.

“In the whole history of initial claims, there’s never been anything remotely close to that,” said Ben Herzon, executive director of IHS Markit, a business data and analytics firm.

The attorneys general of Washington and 14 states sent a letter to Amazon’s founder, Jeff Bezos, on Wednesday calling on the company to provide more paid sick leave for its workers.

Amazon has given workers two weeks of paid leave if they learn they have the coronavirus or are placed into quarantine, but the attorneys general said that “narrow criteria is particularly insufficient given the realities of the public health crisis, where the lack of access to Covid-19 testing has been widely reported.” Among other things, they said Amazon allow two weeks of paid time off for employees to self-quarantine and seek a diagnosis, as well as to care for children whose schools may have closed.

Amazon workers in a handful of warehouses across the country, including in New York City, have gotten sick from the virus. Amazon did not immediately respond to a request for comment.

They are scrounging for fabric, cutting it up, stitching it together. They are repurposing drapes, dresses, bra straps, shower curtains, even coffee filters. They are building supply chains, organizing workers, managing distribution networks.

Most of all, they are sewing.

All over the country, homebound Americans are crafting thousands upon thousands of face masks to help shield doctors, nurses and many others from the coronavirus.

Legions of sewers have been called to duty in a matter of days via social media and word of mouth, their skills no longer taken for granted or dismissed as a mere hobby. They are making masks for America, much as a previous generation manufactured ammunition and tended “victory gardens” during World War II.

HUB FOR HELP

Your down payment fund was safely in cash. You had planned, perhaps for years, for the 2020 home-buying season. Then, just as the perfect home hit the market, the coronavirus turned the world on its head.

Should you go through with the purchase?

All the uncertainty about the economy may make it seem like an odd moment to consider buying a house. But the experiences of home buyers who took the leap during the Great Recession may provide some cause for comfort.

Ask us your money questions at this difficult time. If you have questions or ideas, write to hubforhelp@nytimes.com and Ron Lieber, Tara Siegel Bernard and our personal finance team will read every message.

  • The Cheesecake Factory will not be able to make rent payments on any of its storefronts on April 1 because of the coronavirus pandemic, a spokeswoman said on Wednesday.

  • Nordstrom will extend its temporary store closures through April 5 and continue to pay store staff through that date, but will furlough “a portion” of corporate employees for six weeks, and the company’s executive leadership group will take a pay cut. Macy’s said that it would reduce pay for director-level employees and above starting April 1 and that its chief executive, Jeff Gennette, would not receive compensation.

  • S&P Global Ratings lowered Ford Motor’s credit rating to junk status on Wednesday, citing “supply-side and demand-side shocks” of the coronavirus outbreak on the company. Ford, which already had a junk rating from Moody’s Investors Service, said on Wednesday that it would keep its North American plants closed past March 30 because of the outbreak.

  • Hollywood agencies are moving ahead with layoffs and announcing that senior executives — Ari Emanuel among them — will forgo salaries for the remainder of the year. On Wednesday, Endeavor, a media company that includes the William Morris and IMG agencies and is run by Mr. Emanuel, laid off about 250 of its 7,500 employees. United Talent Agency instituted a companywide salary cut on Monday, with pullbacks based on income. And Paradigm, an agency with a large roster of musicians, jettisoned more than 100 of its 700 employees on Friday.

  • Gap said it would help source masks and protective gowns from its vendors for California hospitals. Canada Goose said it would reopen two manufacturing facilities to produce scrubs and patient gowns for health care workers and patients in Canada.

  • President Trump’s daily briefings on the coronavirus have attracted an average audience of 8.5 million on CNN, Fox News and MSNBC, roughly the viewership of the season finale of “The Bachelor.” On Monday, nearly 12.2 million people watched Mr. Trump’s briefing on cable news, according to Nielsen. But some journalists and public health experts say that could be a dangerous thing: Mr. Trump has repeatedly delivered information that doctors have called ill-informed, misleading or downright wrong.

Reporting was contributed by Michael Corkery, Sapna Maheshwari, Jesse Drucker, Karen Weise, Ana Swanson, Brooks Barnes, Ben Casselman, Patricia Cohen, Niraj Chokshi, Jim Tankersley, Alan Rappeport, Alexandra Stevenson, David Gelles, Julie Creswell, David Yaffe-Bellany, David Enrich, Rachel Abrams, Steven Kurutz, Eduardo Porter, Clifford Krauss, Michael M. Grynbaum, Edmund Lee, Brian X. Chen, Neal E. Boudette, Elaine Yu, Daniel Victor, Jason Karaian, Kevin Granville and Carlos Tejada.

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British American Tobacco working on plant-based coronavirus vaccine | Business

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British American Tobacco, the maker of brands including Lucky Strike, Dunhill, Rothmans and Benson & Hedges, has said it has a potential coronavirus vaccine in development using tobacco plants.

BAT has turned the vast resources usually focused on creating products that pose health risks to millions of smokers worldwide to battling the global pandemic.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

“If testing goes well, BAT is hopeful that, with the right partners and support from government agencies, between 1m and 3m doses of the vaccine could be manufactured per week, beginning in June,” the company said.

The London-listed company used the announcement to trump the positive aspects of its tobacco empire, saying that “new, fast-growing tobacco plant technology” put it ahead of others trying to develop a vaccine.

“Tobacco plants offer the potential for faster and safer vaccine development compared with conventional methods,” the company said.

BAT said its US biotech subsidiary, Kentucky BioProcessing (KBP), has moved to pre-clinical testing and that it will work on the vaccine on a not-for-profit basis.

In 2014, the tobacco firm bought KBP, which has previously worked on a treatment for Ebola. BAT said its work was “potentially safer [than conventional vaccine technology], given that tobacco plants cannot host pathogens which cause human disease”.


BAT said it had engaged with the Food and Drug Administration in the US and the Department for Health and Social Care in the UK to “offer our support and access to our research with the aim of trying to expedite the development of a vaccine for Covid-19”.

Dr David O’Reilly, the director of scientific research at BAT, said: “Vaccine development is challenging and complex work but we believe we have made a significant breakthrough with our tobacco plant technology platform, and we stand ready to work with governments and all stakeholders to help win the war against Covid-19.

“KBP has been exploring alternative uses of the tobacco plant for some time. One such alternative use is the development of plant-based vaccines.”


BAT said it had cloned a portion of the genetic sequence of the coronavirus and developed a potential antigen. The antigen was then inserted into tobacco plants for reproduction and, once the plants were harvested, the antigen was purified. It is now undergoing pre-clinical testing.

The tobacco firm is more typically on the receiving end of criticism from campaigning groups, including the use young and attractive models to entice younger demographics to try e-cigarettes and vaping technology.

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Almost a fifth of small businesses ‘at risk of collapse within month’ | Business

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Almost a fifth of small businesses are at risk of collapsing within the next month as they struggle to secure emergency cash meant to support them through the coronavirus lockdown, according to research by an accountancy network.

The chancellor, Rishi Sunak, has pledged unprecedented aid to companies to try to cushion the blow from much of the economy shutting down but businesses and politicians have raised concerns that there are gaps in the schemes.

Some 18% of small and medium-sized enterprises (SMEs) either probably or definitely will not be able to obtain additional cash from the government to survive for a four-week period, according to the Corporate Finance Network.

Its accountancy firm members estimated that almost a third of their 13,000 small-company clients from around the UK would be unable to acquire the cash needed to ride out an extended, three-month lockdown.

Rachel Reeves, the Labour MP who heads the business select committee, wrote to the chancellor on Tuesday outlining concerns with the schemes to support companies.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

Those concerns included some banks’ use of personal guarantees in the form of savings and mortgages to secure lending to small businesses under the government’s hastily formulated business interruption loans scheme. She also said that some of the banks offering the government-backed loans were putting in place “punitive” interest rates that made it impossible for companies to borrow money.

“The challenge now is getting the money out of the door to support businesses before it’s too late,” she told BBC radio on Wednesday. “There are many businesses who if they don’t quickly access this cash they are going to go under.

“That will have huge consequences for employment and also our ability to grow the economy when this pandemic has passed. If businesses collapse they won’t be able to ensure our economy can recover. They will be lost for ever.”

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The banking industry body, UK Finance, has said it is running the schemes in line with the government’s design.

In her letter to Sunak, Reeves said the history of support to the banking sector meant they had to step up. The industry and regulators at the Bank of England have said that banks are well positioned to support the economy through the crisis. The banks on Tuesday night agreed to scrap dividend payouts to shareholders after Bank of England pressure.

“Banks were kept afloat by government and taxpayers during the financial crisis,” Reeves wrote. “I would urge them to play their part in helping small and medium-sized businesses through this crisis.”

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Texas ‘mom and pop’ business flooded with orders for helmet ventilators amid coronavirus crisis

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One month ago, Chris Austin was running a little-known mom-and-pop business in Texas that fielded a few dozen orders a week for his helmet-style ventilation devices.

He had five employees and a handful of volunteers from the family’s church who would pitch in at the workshop behind their home in the small town of Waxahachie.

Then the coronavirus epidemic hit.

Austin’s company, Sea-Long Medical Systems Inc., is getting thousands of orders every day, from America’s top hospitals to countries as far flung as the United Arab Emirates. Researchers say the device, which costs less than $200, could help hospitals free up ventilators for only the most critically ill coronavirus patients.

“‘Overwhelmed’ doesn’t scratch the surface,” Austin told NBC News.

Sea-Long Medical Systems helmets resemble crude spacesuit helmets, with transparent hoods sealed at the neck and two tubes extending from the base.Sea-Long Medical Systems

The demand for the Sea-Long helmet underscores the dire shortage of ventilators in the U.S. and around the globe fueled by a surge in hospital patients suffering from COVID-19.

In the last few weeks, hospitals have been flooded with patients experiencing respiratory problems so severe they need the help of a machine to help them breathe.

Governors have made impassioned pleas for more equipment. Companies like General Motors and Ford have redesigned their assembly lines to produce the lifesaving devices. And hospital executives are scrambling to snap up any equipment that might help ease the escalating crisis playing out inside their facilities.

The Sea-Long device doesn’t look the part of a lifesaving medical device. It resembles a crude spacesuit helmet, with a transparent hood sealed at the neck and two tubes extending from its base. The helmet was originally designed to supply oxygen to patients receiving treatment in hyperbaric chambers.

But doctors in Italy, where a version of the helmet has long been used to treat people experiencing breathing problems, found it to be effective in helping some COVID-19 patients.

Dr. Bhakti Patel, who has been studying the devices for four years, said they hold promise as an early intervention that could spare respiratory patients the need to be put on the more traditional — and costly and invasive — ventilators.

“I would love for there to be a silver bullet for this pandemic,” said Patel, a pulmonologist at the University of Chicago. “My best hope is that the way it changes the game is that maybe it shaves off the number of patients who need a ventilator — even if it’s 1 out of 3 or 1 out of 5.”

“If that is the case,” Patel added, “that would be a game changer when we’re seeing this tidal wave of patients who need a ventilator.”

Full coverage of the coronavirus outbreak

Patel led a first-of-its-kind study in 2016 that tested the Sea-Long helmet against an oxygen mask for a group of 83 intensive care patients suffering from acute respiratory distress. The researchers found that the helmet led to superior outcomes: Patients using them required ventilation 18.2 percent of the time, compared to 61.5 percent for the masks, and had a better 90-day survival rate, according to the study, published in the Journal of the American Medical Association.

The trial was stopped early because the helmets proved more effective than the masks, resulting in a smaller sample size than originally intended. But Patel believes the device could lead to a sea change in intensive care units that have long relied on traditional ventilators. Those devices require doctors to fully sedate patients and insert a tube into their windpipes, a process that can cause pneumonia and other problems when used for extended periods of time.

“If we take away the ventilator — which comes with this package of sedating people, making them not move, making them sort of not have memory of what’s happening — perhaps we could spare some patients some long-term complications,” Patel said.

At $162 apiece, the Sea-Long helmet costs a tiny fraction of the five-figure ventilators.

The original devices were made to run through ventilators. But working with Patel and her mentor, Dr. John Kress, Sea-Long has modified the helmets so they can be hooked up to a hospital’s regular oxygen supply, keeping the ventilators free for those who need them most. They have also made another significant modification, adding a viral filter to prevent possible COVID-19 exposure to others.

This week, the team at the University of Chicago Medical Center used the helmet on one coronavirus patient and has gotten encouraging results, Kress said. The facility has received 20 of an expected 100 helmets and is planning to use them on additional patients, the doctors said.

Chris Austin, fourth left, says his team has been working around the clock for the past several weeks.NBC News

Other companies make similar ventilator helmets, but Sea-Long’s is the only helmet available in the U.S. that meets requirements of the Food and Drug Administration and has been validated in a clinical study for acute respiratory syndrome. No studies have yet been done, however, examining the effectiveness of the devices in treating COVID-19 patients.

Austin’s team has been working around the clock for the past several weeks. The workforce has at least doubled to more than 10 people, Austin said, and volunteers have been showing up in droves.

“We have people showing up that we don’t even know that say: ‘We’re here to help. What can we do?'” Austin said. “They don’t ask for anything. They don’t expect anything. They just say, ‘Whatever you want me to do, we’ll do it.'”

“It just about brings tears to my eyes,” Austin added.

The attention has led to some other acts of extraordinary generosity.

Austin said he recently got a surprised call from Virgin Galactic CEO George Whitesides offering to help him produce more devices.

“Chris, I saw what you do, and we want to help,” Whitesides said, according to Austin. “Whatever it takes.”

Austin told him he needed more machines to manufacture the devices but didn’t have the cash to pay for them. Later that day, Austin got a call from his New Jersey-based supplier.

“Somebody just paid your bill,” Austin said he was told. “They’ll be shipping tomorrow.”

With the four additional machines, Sea-Long expects to produce thousands of helmets a week. The goal is to produce 50,000 per week.

“This is the classic sort of American story,” Patel said. “It’s the little engine that could.”

Download the NBC News app for full coverage and alerts about the coronavirus outbreak

James Vanderploeg, Virgin Galactic’s chief medical officer, said the company is working with Sea-Long “to help them expand their capacity, helping with recruiting additional people and getting equipment in place and helping with the logistics and so forth — anything we can do to help them expand their throughput.” Virgin Galactic is also modeling potential prototypes for its own design of helmets used for ventilation, Vanderploeg said.

Major U.S. medical centers are now stocking up on the helmets, including Massachusetts General Hospital and the Hospital of the University of Pennsylvania. Austin said he’s also received orders from Canada, Mexico and several countries in Europe, including hard-hit Italy.

A Mass General spokesperson said the hospital has ordered five Sea-Long helmets but has not yet received them.

A Penn Health spokesperson confirmed that the hospital has ordered the devices.

With so much of the world in need and so many orders coming in at once, Austin has faced a difficult question: Whom to prioritize?

“We really look at where is the need,” Austin said. “We know New York has a stronger need. We know Boston. We know Chicago. … But we also know that we have to get what we can to Italy.”

For now, the company is shipping only a limited number helmets per order, “because we still can’t afford the volume of a huge order,” he said.

Amid the worsening pandemic, Sea-Long isn’t planning to raise the price in part because it doesn’t want to limit who has access to the devices.

“This probably sounds sappy,” Austin said, “but we think of what if that was our son or daughter or grandfather sitting there in that bed gasping for air and we have to explain to him: ‘I’m sorry. We don’t have anything for you.'”

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