A deal months in the making
Lawmakers finally struck a $900 billion stimulus compromise yesterday, after months of warnings from economists, corporate leaders and the Fed that the U.S. economy needed additional help. The questions now are whether it’s enough, and who will benefit the most.
The deal provides for $600 in direct payments to millions of Americans, as well as $300 a week in supplemental federal unemployment benefits for 11 weeks. It also includes:
$284 billion to revive the lapsed Paycheck Protection Program, along with additional small-business aid
$15 billion in payroll support to airlines
$25 billion in rental assistance and eviction moratoriums
A tax break for corporate meal expenses derided by critics as a deduction for “three-martini lunches”
A ban on most surprise medical bills
Skeptics say it may be too little, too late. Economists have warned that the bill would fall short of what was required to support the economic recovery. Democrats, who already accepted a sharp cut from the $2.2 trillion the House had approved earlier this year, called on President-elect Joe Biden to take more action when he assumes office next month: “It cannot be the final word on congressional relief,” said Senator Chuck Schumer, the minority leader.
Mr. Biden suggested he’d pursue more aid: “This action in the lame-duck session is just the beginning. Our work is far from over.”
But any fight for more stimulus faces daunting odds. Yesterday’s bill was already the work of intense negotiating between Democrats and Republicans, and was nearly scuttled several times. Senator Mitch McConnell, the majority leader who stymied previous aid legislation, called the package “smart and responsible.” Unless Democrats win both of Georgia’s Senate seats in next month’s runoffs, giving them control of Congress, it’s increasingly unlikely lawmakers will take further action.
HERE’S WHAT’S HAPPENING
Travel from the U.K. is halted amid new coronavirus strain. After Britain locked down London and surrounding areas, citing concerns about a new, fast-spreading variant of the virus, a growing list of countries barred travelers from the U.K. (Here’s why there might not be a reason to panic about the new strain yet.) Meanwhile, Britain is still negotiating with the European Union on a post-Brexit trade deal, and the clock is ticking.
Jack Ma’s rejected olive branch to Beijing. The billionaire reportedly offered “any of the platforms” run by Ant Group, the fintech giant he co-founded, shortly before its planned I.P.O. last month, according to The Wall Street Journal. The proposal failed to placate government officials skeptical of the company: Days later, regulators blocked Ant’s stock offering.
Employers can mandate vaccines, a regulator rules. The Equal Employment Opportunity Commission has issued guidance that companies can bar employees from the workplace if they aren’t vaccinated. Separately, the C.D.C. voted to recommend that people over age 74 and frontline essential workers should be next up for inoculations, while companies lobby for their employees to get higher priority.
Conservative news outlets face potential defamation lawsuits over voting claims. Smartmatics and Dominion, two major voter-system companies, are threatening legal action over repeated baseless claims of election meddling by commentators on Fox News, Newsmax and OAN. Legal experts told The Times’s Ben Smith that the companies have strong legal ground.
Ray Dalio’s son dies in a car crash. Devon Dalio, 42, was a private equity investor who had previously worked at his father’s hedge fund, Bridgewater Associates. The elder Mr. Dalio confirmed the news on Twitter: “My family and I are mourning and processing.”
A big day for Tesla, and the markets
Today, Tesla is officially joining the S&P 500 — and the inclusion of a controversial company with a $650 billion market cap may have strange consequences.
It will instantly be the sixth-biggest company in the index. (That’s if you combine the two classes of Alphabet stock.) In anticipation of Tesla’s inclusion, which means its shares will be widely held by the universe of funds that use the S&P as a benchmark, the company’s stock ran up 6 percent on Friday alone.
A question of volatility. Over the last five years, Tesla has been 60 percent more volatile than the S&P 500 — and almost 90 percent more volatile than the index this year alone. Market experts hope that trading in the company will calm down, in part by being included in the S&P. (Most passive investors who own S&P stocks buy and sell the index’s shares as a group.)
Anger over crypto ‘midnight rulemaking’
Late on Friday, the Treasury Department proposed a new disclosure rule for certain digital currency transactions “aimed at closing money laundering regulatory gaps.” Critics of the move in the cryptocurrency community decried the proposal.
Critics are focused on the process. While one crypto executive said that the rule, which requires disclosure for certain big transactions with the Treasury Department and had been rumored for some time, “could’ve been worse,” critics took particular issue with its rollout. The department is allowing only two weeks over the holidays for public comment, which they say isn’t enough time:
“The process for this rule is entirely out of order,” tweeted Jake Chervinsky, general counsel at the fintech company Compound Labs, deriding the Treasury Department’s actions as “midnight rulemaking” aimed at forcing through a “predetermined result.”
“Bad process for a bad rule,” tweeted the Blockchain Association, calling a Jan. 4 deadline for comments “the first flag” of trouble. The trade group said it has hired Paul Clement, a former solicitor general, to lead its legal challenge.
“It doesn’t follow the correct process, and we’ll be challenging it,” said Brian Armstrong, the Coinbase C.E.O. who previously warned about the potential rules.
“The first email literally got stuck in my junk mail.”
— Adam Zimmerman, the C.E.O. of Craft3, a nonprofit community lender, about the initial outreach from MacKenzie Scott’s small team of philanthropic advisers. (She eventually gave $10 million to his group.)
A failed coup at the Washington Football Team
Efforts to oust Dan Snyder, the majority owner of the N.F.L.’s Washington Football Team, may have backfired, The Times’s Ken Belson and Katie Rosman report. The team’s three minority owners may have wanted him out — but now they’re poised to sell their holdings to him at a steep discount to what they had sought for their shares in June.
The fight began over money. The three minority owners — the FedEx founder Fred Smith, the financier Robert Rothman and the real estate developer Dwight Schar — protested Mr. Snyder’s decision to cut their dividend payments amid the pandemic. They tried to sell their combined 40 percent stake over the summer, but Mr. Snyder instead threw them off the board.
An effort to leak negative information was discovered. Court filings by Mr. Snyder assert that Mr. Schar teamed up with a former assistant to Mr. Snyder to pass damning material to news media to help force him out. (Phone records show 123 calls between the assistant and The Washington Post, which eventually published a huge story on sexual harassment allegations against team executives — though Mr. Snyder himself wasn’t implicated.)
Mr. Snyder may now have even tighter control, months after he was criticized for his longtime refusal to get rid of the team’s previous name, seen by many as a racist slur, and logo. He is expected to pay up to $900 million for the three partners’ shares, down from the $1.5 billion valuation they had cited in June.
When a credit card giant tells a merchant ‘no’
Mastercard stopped processing credit card payments for Pornhub after The Times columnist Nick Kristof wrote that the site distributed videos of child abuse and sexual assault. On the latest episode of Kara Swisher’s Times Opinion podcast, Sway, out this morning, Mastercard’s C.E.O., Ajay Banga, explains when and where he drew the line.
Being mindful of the “slippery slope.” Mr. Banga said Mastercard often faces pressure to stop doing business with a sector — “Is alcohol bad? This topic has been about guns in the past. Are birth control pills bad?” — but Pornhub was a relatively easy call. “We went back to Pornhub and said, sorry, you’ve crossed the legal standard,” Mr. Banga told Kara.
Finding the balance between social responsibility and the law. Kara pushed Mr. Banga on what it means to be socially responsible if Mastercard is willing to do business with controversial industries. His response:
“I have to follow a legal standard. I’m not trying to follow a moral standard. If I did, I personally abhor all kinds of things to do with gun sales as well. I don’t own a gun. I also abhor things to do with porn. But you know what? That’s not what this is about. There are laws in a country, and we’re trying to work within the laws.”
THE SPEED READ
SoftBank is expected to launch a SPAC that will seek to raise up to $600 million. (Axios)
AT&T is reportedly disappointed with bids for its DirecTV division and may call off the sales process. (NY Post)
Two payments giants, FIS and Global Payments, are said to have held talks to merge in a deal potentially valued at $70 billion, though negotiations broke down. (WSJ)
Politics and policy
The chairman of the Senate environmental committee suggested that Republicans would resist confirming Jennifer Granholm, President-elect Joe Biden’s nominee for energy secretary, over her previous comments criticizing fossil fuels. (NYT)
Advisers to Mr. Biden are reportedly weighing retaliation against Russian infrastructure in response to a major hack thought to have been ordered by the Kremlin. (Reuters)
President Trump signed into law a bill that could delist Chinese companies from U.S. exchanges unless American auditors review their books. (Bloomberg)
How the antitrust cases against Big Tech companies are relying on former insiders for support. And here’s what experts think of the likelihood of success for those legal battles. (NYT, Axios)
The businesses of Intel and Nvidia are increasingly threatened by their best customers. (WSJ)
Inside the disastrous rollout of the video game Cyberpunk 2077, and what the fallout might be for the industry. (NYT)
Best of the rest
Working from home has given some employees more power to push back on busywork. (WSJ)
Companies rushed to embrace corporate diversity training — but follow-up has been lacking. (WSJ)
How a reporter fell for the “pharma bro” Martin Shkreli. (Elle)
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