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Stimulus package: Senate approves historic $2 trillion stimulus deal amid growing coronavirus fears

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In a remarkable sign of overwhelming bipartisan support for the legislation, the vote was unanimous at 96-0.

The legislation represents the largest emergency aid package in US history and the most significant legislative action taken to address the rapidly intensifying coronavirus crisis, which is overwhelming hospitals and grinding much of the economy to a halt.

It will next go to the House for a vote. House Majority Leader Steny Hoyer announced Wednesday evening ahead of Senate passage that the House will convene at 9 a.m. on Friday to consider the relief package. The plan is to pass the bill by voice vote, a move that would allow the House to avoid forcing all members to return to Washington for a recorded roll call vote.

President Donald Trump has indicated he will sign the measure.

The White House and Senate leaders struck a major deal early Wednesday morning on the package. Senate Majority Leader Mitch McConnell formally announced the agreement on the Senate floor, describing it as “a wartime level of investment for our nation.”

LIVE UPDATES: Coronavirus pandemic alters life as we know it
Legislative text of the final deal was released Wednesday evening ahead of a final vote. Key elements of the proposal are $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies.

The plan will deliver a massive infusion of financial aid into a struggling economy hard hit by job loss, with provisions to help impacted American workers and families as well as small businesses and major industries including airlines.

Under the plan, individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 — and an additional $500 per each child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.

In addition, the bill would provide a major amount of funding for hard-hit hospitals — $130 billion — as well as $150 billion for state and local governments that are cash-strapped due to their response to coronavirus.

It also has a provision that would block Trump and his family, as well as other top government officials and members of Congress, from getting loans or investments from Treasury programs in the stimulus, according to Minority Leader Chuck Schumer’s office.

Hard-fought negotiations

A deal came together after hard-fought negotiations between congressional Republicans, Democrats and the Trump administration.

After two consecutive days of high-profile setbacks — with Senate Democrats blocking procedural votes on Sunday and Monday over opposition to a bill initially crafted by Senate Republicans — a deal appeared to be imminent by Tuesday morning, but was ultimately not announced until the early hours of Wednesday morning.
Democrats had argued over the course of negotiations that they wanted to see more safeguards for American workers in the deal and oversight for how funding would be doled out.

There was intense partisan debate over the $500 billion proposal to provide loans to distressed companies, with $50 billion in loans for passenger air carriers. Democrats initially contended there was not enough oversight on how the money would be disbursed, but the Trump administration agreed to an oversight board and the creation of an inspector general position to review how the money is spent.

There has also been controversy over the stimulus plan’s unemployment benefits.

On Wednesday afternoon, the package hit a last-minute snag with a group of Republican senators arguing that it would incentivize unemployment and could trigger worker shortages and supply disruptions by providing more money to some unemployed workers than they would make working.

“This bill pays you more not to work than if you were working,” GOP Sen. Lindsey Graham of South Carolina said. “You’re literally incentivizing taking people out of the workforce at a time when we need critical infrastructure supplied with workers.”

Republican critics secured a Wednesday evening vote on an amendment to cap unemployment benefits at 100% of the wages workers received while employed, but the amendment did not pass.

Legislation heads to the House next

House Speaker Nancy Pelosi is now emphasizing that Democrats should “recognize the good” in the massive stimulus.

“What is important is for us to recognize the good that is in the bill, appreciate it for what it does. Don’t judge it for what it doesn’t because we have more bills to come,” the California Democrat told CNN’s Wolf Blitzer on “The Situation Room” Wednesday evening.

Those comments came just after Pelosi told House Democrats on a series of conference calls that she is already thinking about the substance of the fourth coronavirus relief package that Congress will have to pass to respond to the crisis, according to sources on the calls.

Pelosi made it clear to members who are disappointed that the pending bill did not include enough of their priorities that they will have a chance to add those provisions in the fourth package, the sources said.
But passage in the House has been made more daunting by the fact that several of its members have tested positive for coronavirus, while many more have self-quarantined after contact with infected individuals.

A voice vote is a procedural move that would avoid a recorded roll call vote, which would have forced members now dispersed throughout the country to travel back to Washington to get the stimulus across the finish line.

“Members are further advised that due to the limited flight options, Members participating in self-quarantine, and several states mandating stay-at-home orders, we expect the bill to pass by voice vote on Friday,” Hoyer announced in a notice to members Wednesday evening.

Pelosi had suggested on Tuesday that she was hoping to avoid bringing the full House back to Washington to vote on the package, seeking to pass it through unanimous consent instead. But any individual member can block such a move, which would make passage more difficult.

This story has been updated to include additional developments Wednesday.

CNN’s Phil Mattingly, Paul LeBlanc and Veronica Stracqualursi contributed to this report.



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Fired Navy captain reportedly tests positive for coronavirus

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Captain Brett Crozier, commanding officer of the U.S. Navy aircraft carrier USS Theodore Roosevelt, addresses the crew during an all-hands call on the ship’s flight deck in the eastern Pacific Ocean December 19, 2019.

Mass Communication Specialist 3rd Class Nicholas Huynh | US Navy

Capt. Brett Crozier, the now-fired Navy captain who wrote a letter asking for help dealing with a coronavirus outbreak on his ship, has tested positive for COVID-19, The New York Times reported Sunday. 

The Times’ report cited two Naval Academy classmates of Crozier who have a relationship with the officer and his family. 

Crozier had been in command of the USS Theodore Roosevelt until this week, when he was relieved of his duty after he wrote a letter to military leadership to request assistance in responding to a COVID-19 outbreak on the vessel. 

The letter, which leaked to the media, was sent outside the chain of command and via nonsecure unclassified email. 

Crozier began to show symptoms of COVID-19 before he was removed from the USS Theodore Roosevelt on Thursday, The Times reported. He is being quarantined on Naval Base Guam, The Times reported. 

In announcing the decision to remove Crozier from his command, Thomas Modly, acting Secretary of the Navy, said the letter “raised alarm bells unnecessarily.” 

“The captain’s actions made his sailors, their families, and many in the public believe that his letter was the only reason help from our larger Navy family was forthcoming, which was hardly the case,” Modly said Thursday at the Pentagon. 

President Donald Trump said Saturday he thought Crozier’s actions were “terrible.”

“The letter was all over the place. That’s not appropriate. I don’t think that’s appropriate,” Trump said. 

There were more than 100 people infected with COVID-19 on the USS Theodore Roosevelt at the time of Crozier’s letter, which was dated March 30 and first reported on by The San Francisco Chronicle. There more than 4,000 crew members on board on the ship. 

“We are not at war. Sailors do not need to die. If we do not act now, we are failing to properly take care of our most trusted asset — our Sailors,” Crozier wrote in the letter. “The spread of the disease is ongoing and accelerating.”

Defense Secretary Mark Esper told CNN’s “State of the Union” on Sunday that 155 sailors have now tested positive for COVID-19.

“Those are all mild and moderate. There have been no hospitalizations whatsoever,” said Esper.

“There is an investigation ongoing” into Crozier’s actions, Esper said. “But at this point in time, Secretary Modly did not have faith and confidence”  that Crozier could continue serving as captain.

Crozier received applause from sailors on the Roosevelt as he left the ship, a videos posted online showed.  

Former Vice President Joe Biden on Sunday criticized the response to Crozier’s letter. 

“I think it’s close to criminal the way they’re dealing with this guy,” Biden told ABC’s This Week. “I think he should have a commendation rather than be fired.”

CNBC’s Spencer Kimball and Amanda Macias contributed to this report. 



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Carnival’s struggle to survive the coronavirus as outbreak wipes out the cruise industry

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The COVID-19 outbreak has laid waste to entire sectors of the global economy, but none faster than the cruise industry. The pandemic has basically shut down the cruise-ship business, with the three largest publicly traded cruise companies suspending some, if not all, of their operations.

Carnival, the world’s largest cruise operator, has been at the heart of the industry’s struggle against the coronavirus. COVID-19 has spread on ships across nearly half of its brands, infecting hundreds of passengers and killing others. 

Shares of Carnival are down more than 80% in 2020 alone, and the company said in a securities filing that it couldn’t predict when any of its ships would begin to sail again or when ports would reopen. 

Yet, time after time, Carnival has proven resilient, despite seemingly insurmountable setbacks. The company has experienced everything from norovirus outbreaks to fires and capsizes, and it’s still bounced back after every crisis.  

Some experts say this time it’s different. 

In over 30 years, it’s unprecedented. We’ve never seen these types of warnings really ever.

Stewart Chiron

Cruise Industry Expert

For one thing, the government has effectively temporarily cancelled an entire industry. The State Department has advised that no American should set foot on a cruise ship. The Centers for Disease Control and Prevention, which typically issues health warnings about certain regions of the world, not forms of transportation, has warned travelers against all cruise travel worldwide.

“In over 30 years, it’s unprecedented. We’ve never seen these types of warnings really ever,” said cruise industry expert Stewart Chiron. 

Also different this time around — unlike past viral outbreaks aboard ships — passengers have been forced to quarantine on an unprecedented scale either in their rooms on the ships or at U.S. military bases after disembarking. 

Carnival is rapidly hemorrhaging money, and so far, the U.S. government has made it clear that it won’t be helping to bail them out. The question now: Is Carnival too big to fail?

Why Carnival keeps rebounding

Shares of the three largest publicly traded cruise line companies — Carnival, Royal Caribbean, and Norwegian — are all down more than 80% so far this year, putting the valuations of the big three at multiyear lows.

Carnival and Royal Caribbean did not respond to CNBC’s requests for comment, and Norwegian declined to comment. 

Carnival is no stranger to calamity, and when its stock price has taken a hit, it has shown it can recover.

Over the years,  the company has faced every disaster you can envision, from viral outbreaks, to colliding ships, flooding, and fires. But perhaps its two biggest scars are the sinking of the Costa Concordia off the Italian coast in 2012, killing 32 passengers, and an engine-room fire that left the Carnival Triumph without power for days, causing toilets to backup and human waste to overflow into rooms and hallways. That so-called “poop cruise” gripped global media.

Carnival wasn’t defeated. It sunk hundreds of millions of dollars into upgrading its systems across the fleet, and it gave the Carnival Triumph its own $200 million makeover, plus a new name.

After each one of these crises, Carnival’s stock mostly rebounded. Lately, things haven’t been looking quite as good for Carnival’s stock. It has been steadily declining since 2018 and began 2020 at a lower share price than in 2016. On Tuesday, Carnival announced it would suspend dividend payments.

Credit rating agency S&P downgraded Carnival on March 13 and says it’s continuing to monitor the company for further downgrades.

The fundamentals

Despite the onslaught of bad news, Carnival still dominates the market. It is the world’s largest cruise operator, accounting for nearly 50% of all cruise passengers. It  also enjoys a stronger balance sheet than its rivals. 

Until the outbreak of COVID-19, sales for Carnival had been strong, rising every year since 2015, and up more than 10% from fiscal year 2018 to 2019. That’s nearly double the revenue of Royal Caribbean and more than three times Norwegian’s sales in fiscal year 2019. Net profit also dwarfs the competition, though the company has been struggling to maintain growth.

Carnival’s long-term viability ahead of the outbreak was also promising. As of the end of fiscal year 2019, Carnival’s debt-to-equity ratio, a measure used to help evaluate a company’s risk, was 45.3%, which is considered a good balance between what it owes and what it owns.

Compare that to its two chief rivals. Norwegian and Royal Caribbean’s debt-to-equity ratios are around 100%. Both took on a lot of debt, at a time when debt was cheap, which may prove difficult to pay back during a rough patch like this. 

Carnival has its own debt payments coming due, not to mention the fresh injection of new debt it took on last week, and the $4.8 billion it’s committed to spending on new ships in 2020. 

On top of the $518 million in cash it already had on hand, Carnival tapped its entire $3 billion credit facility, and it is trying to raise over $6 billion in stock and debt. However, Carnival said it needs about $1 billion a month to keep operating, according to an April 3 securities filing. 

Getting credit investors on board comes at great cost to the company. The bulk of this new financing is from bonds paying investors 11.5%, an interest rate typically seen in the junk bond market. 

“The cost of financing was particularly onerous, given this is an investment-grade entity with a substantial amount of collateral coverage,” said John McClain, a portfolio manager at Diamond Hill Capital. “Its collateral coverage is 86 vessels, plus intellectual property, with a net book value north of $28 billion. Historically, this would give a huge amount of confidence.”

The future

Some have compared the current plight of the cruise industry to that of the airlines, when the government closed airports following the September 11 terrorist attacks in the U.S. Travel demand tanked, and several major American airlines declared bankruptcy, despite receiving federal aid. 

For the moment, it doesn’t look as though the U.S. government will be coming to the rescue of any of the major cruise lines. The $2 trillion relief package excludes companies which are not incorporated in the U.S. and don’t have significant operations in and a majority of its employees based in the U.S. 

Carnival, for example, is headquartered in Miami, its shares trade on the NYSE, but it is actually incorporated in Panama. Cruise lines also tend to hire foreign workers who don’t always fall under the protection of American minimum wage requirements.

Industry experts think that, unlike past outbreaks, COVID-19 will fundamentally alter the cruising model.

An image of Carnival Splendor cruise ship at the Overseas Passenger Terminal in Circular Quay on March 22, 2020 in Sydney, Australia.

Izhar Kahn | NurPhoto | Getty Images

“Even under the best case scenario where there’s containment of this virus, it could literally take up to a year for things to get back to any semblance of normalcy,” said Tuna Amobi, senior media analyst at CFRA Research. 

To try to salvage sales while the industry is effectively dormant, cruise lines are looking to revive their post-pandemic travel seasons, slashing ticket prices in order to lure customers. 

“Cruising is pretty affordable, and the allure of cheap travel options will continue to drive new cruisers, despite the pandemic. Cruise lines are going to be offering unbelievable deals,” said McClain. 

Also promising: Americans love to go on cruises.

Before the coronavirus pandemic brought the industry to a standstill, 2020 was poised to be a record-breaking year for the business. The industry was expecting to carry more than 32 million passengers, almost twice as many as in 2009. And they’re getting younger travelers on board, with 71% of millennials having a more positive attitude about cruising compared to 2017, according to Cruise Lines International Association.

Still, some analysts remain bearish on the industry’s ability to recover.

“If you look at the whole tourism segment, I think that this is going to be painful for all of them, but airlines will likely recover. People will get back on planes. I think that hotels will also recover. But I think cruises may actually have a hard time,” said Gina Sanchez, founder and CEO of Chantico Global.



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Mystery Shipwreck Dates to Before Revolutionary War, Researcher Says

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In 1769, a cargo ship laden with flour, pork and English goods set sail from Salem, Mass., headed to Portland, Maine.

The ship encountered a fierce storm and never made it to its destination. Now a maritime archaeologist believes he may have solved the mystery.

Every few years, the remains of a shipwreck have surfaced on a beach in York, Maine. Its wooden hull, which is about 50 feet long, appeared in 1958 after a storm, and again in 1978, 2007 and 2013, capturing the interest of local residents and visitors to Short Sands Beach. The last time waves exposed its frame was in March 2018.

The Maine Historic Preservation Commission has said it believes the wreckage dates from the period between the Revolutionary and Civil Wars. But the history and identity of the ship remained uncertain in York, a small resort town 45 miles south of Portland.

In 2018, after waves revealed the wreckage again, Mr. Claesson took wood samples from the hull plank and ship frame. The samples were tested at the Cornell University Tree-Ring Laboratory in Ithaca, N.Y., to determine their age.

The analysis suggested that the trees that were felled had a ring date of about 1753.

“Of interest in this particular study was that three different species were used, two that are not commonly used in shipbuilding, that grow right here in New England and northeastern North America,” Carol B. Griggs, a senior research associate at the Tree-Ring Laboratory, said on Sunday.

Whether the ship is the Defiance or another vessel, it was built in 1753 or soon after, and most likely somewhere along the New England coast, she said.

After combing through historical and notary records, including a firsthand account he found at the Phillips Library at the Peabody Essex Museum in Rowley, Mass., Mr. Claesson learned that there was a sloop called the Defiance that had been wrecked in York in 1769.

He also found that a sloop with the same name “was coincidentally built in 1754 in Massachusetts, which fits well with out tree-ring dates of circa 1753,” he said.

Mr. Claesson said his research found that the Defiance was traveling from Salem and headed for Portland when it encountered a storm.

“They took anchor, but in heavy seas the crew was forced to cut the anchor cables, and were pushed ashore onto York Beach,” Mr. Claesson said. “The ship was a total loss, but the crew survived.”

“It would be great to have a chance to conduct a more detailed archaeological investigation to understand how the ship was designed and built, and confirm the identification as Defiance,” he said. “We may not have too many more opportunities to document marine architecture of this vintage, and tell the story of these early American seafarers.”



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