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Wall St ends mixed after paring earlier losses

Summary

  • closed higher while the S&P 500 and Dow finished lower
  • November jobs data showed modest gains as unemployment rose to 4.6%
  • Investors priced in deeper Fed rate cuts for next year
  • Energy and health stocks dragged markets as crude hit 2021 lows

Dec 16 (Reuters) – ‘s main indexes pared some losses on Tuesday afternoon with the Nasdaq closing up, and the S&P 500 and the Dow closing lower, impacted by declines in healthcare and energy stocks. Investors evaluated delayed economic data to gauge the ‘s monetary policy outlook for next year.

A Labor Department report showed nonfarm payrolls increased by 64,000 jobs in November following a decline in October because of government spending cuts. But the rose to 4.6% in November against the backdrop of economic uncertainty stemming from President Donald Trump’s aggressive trade policy.

A separate report on Tuesday showed retail sales were flat in October, just below an estimate of economists polled by Reuters calling for a rise of 0.1%. Analysts flagged the likelihood of the figures being distorted by slow data collection due to a recent government shutdown.

“This is all fairly old news at this point. Most data points are being viewed in the lens of what they are going to do to the Fed, and the data you got today isn’t likely to move the needle,” said Mark Hackett, chief market strategist at Nationwide.

After Tuesday’s data, investors are pricing in interest rate cuts of at least 58 basis points next year — more than double the 25 bps signaled by the Fed last week.

Trump is set to interview Fed Governor Christopher Waller on Wednesday for the Federal Reserve chair position, the Wall Street Journal reported Tuesday afternoon.

According to preliminary data, the S&P 500 lost 16.42 points, or 0.24%, to end at 6,800.09 points, while the Nasdaq Composite gained 54.05 points, or 0.23%, to 23,111.46. The Dow Jones Industrial Average fell 302.67 points, or 0.63%, to 48,113.89.

Crude prices hit their lowest level since 2021.

“The crude move today is the one that stands out. Everything else seems like lethargy among investors and just a modest technical move to the sidelines,” Hackett said.

In health stocks, Pfizer fell after the drugmaker forecast a challenging 2026 due to weaker sales of COVID-19 products and squeezed margins. Humana slipped after the health insurer announced undefined leadership changes.

The S&P 500 and the Nasdaq hovered near their three-week lows as persistent uncertainty over rate cuts and concerns about lofty tech valuations continued to weigh on market sentiment.

Among other stocks, B. Riley jumped after the investment bank reported a profit for the second quarter, compared with a year-ago loss in an overdue quarterly filing.

Comcast rose after CNBC financial journalist David Faber speculated about potential involvement by an activist investor.

Separately, a Reuters report said Nasdaq submitted paperwork with the U.S. Securities and Exchange Commission to roll out round-the-clock trading of stocks, months after the New York Stock Exchange and Cboe Global Markets announced similar plans.

(Reporting by Abigail Summerville in New York and Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar and Matthew Lewis)

 

Longtime SCC banking commissioner to retire

After nearly three decades under the same leadership, the Virginia ‘s Bureau of Financial Institutions will soon have a new commissioner.

The announced Tuesday that Joseph Face Jr. will retire in January 2026 after serving since 1997 as the state’s commissioner of the Bureau of Financial Institutions, with regulatory authority over state-chartered banks and in Virginia.

Dustin Physioc will soon become commissioner of financial institutions for the Virginia State Corporation Commission. Photo courtesy State Corporation Commission
Dustin Physioc will soon become commissioner of financial institutions for the Virginia State Corporation Commission. Photo courtesy State Corporation Commission

Dustin Physioc, who has almost two decades of experience with the SCC’s Bureau of Financial Institutions, will succeed Face, effective Jan. 25.

The bureau administers state laws applicable to depository and nondepository financial institutions, including state-chartered banks, saving institutions and credit unions. It also handles consumer complaints related to those entities.

Face’s career with the SCC dates back to 1979, when he began work as an examiner. He later became deputy commissioner of financial institutions in 1993. During his time with the SCC, he has also represented state regulators in numerous groups, committees and coalitions

“Joe Face’s steady leadership over the last three decades has been of incalculable value to both consumers and the regulated community,” Commission Chair Samuel T. Towell said in a statement. “Virginia is fortunate to have in Dustin Physioc someone with the experience and demeanor to build on that strong foundation.”

Physioc joined the SCC in 2006 as a financial analyst in the bureau’s licensing division and later held various licensing positions before being appointed deputy commissioner for administration and licensing in 2018. He also led the bureau’s strategic planning and budget programs.

Physioc has bachelor’s degrees in economics and political science from Virginia Tech. He is also a graduate of the Virginia Executive Institute, the L. Douglas Wilder School of Government and Public Affairs at Virginia Commonwealth University and the Virginia Bankers School of Bank Management.

According to the SCC, the bureau regulates more than 26,000 financial institutions, licensees and registrants controlling some $150 billion in assets.

PayPal applies to form its own bank to expand small-business lending

Summary

  • applied for a charter in Utah and with the
  • A charter would allow insured savings accounts and expanded lending
  • The move aligns with eased banking rules under Trump’s administration
  • Consumers have been wary of PayPal balances lacking federal insurance

PayPal is seeking a that would allow it to boost its lending , offer savings accounts that can earn interest and make customers’ deposits eligible for federal insurance coverage, the payments company said Monday.

PayPal has submitted applications to authorities in Utah and to the Federal Deposit Insurance Corporation to set up PayPal Bank, the online payments company said in a news release.

The banking option would also allow PayPal to expand loans to small businesses and rely less on third parties, it said. PayPal has provided $30 billion in loans to more than 420,000 businesses worldwide since 2013, according to the company.

If PayPal’s applications are approved, the company will join other entities that have not been traditionally seen as banks in receiving banking charters, such as the digital asset firms that have recently received preliminary approval from the federal government. The trend reflects the broader push from President Donald Trump’s second administration to ease banking rules.

The company plans to name Mara McNeill as the first president of the bank. McNeill previously served as the chief executive of Toyota Financial Savings Bank, a subsidiary of the Toyota Motor Corporation.

PayPal was created in 2000 after a payments company co-founded by Elon Musk merged with software company Confinity, whose founders included Trump supporter and tech mogul Peter Thiel. The company has since become a global household name that enables millions of transactions daily. It reported a net revenue of $8.4 billion in the most recent quarter.

But consumers have been wary of storing large amounts of money on the platform or others like it, such as the PayPal-owned Venmo, because the money is not insured by the federal government.

The ‘s Office of the Comptroller of the Currency, a major U.S. financial regulator, last week approved preliminary banking charters for digital asset platforms Circle, BitGo, Fidelity, Paxos and Ripple.

The OCC said that it had “applied the same rigorous review and standards it applies to all charter applications,” while Comptroller Jonathan V. Gould said the approvals would help make the banking industry more competitive by providing consumers with more access to new products, services and sources of credit.

According to the regulator, the public comments it received during the review process raised concerns about “unsavory actors” gaining access to the banking system if digital assets firms were allowed to be banks.

Other companies that have not been traditional players in the banking industry but have submitted applications for charters include Sony and Nissan.

Rod Garratt, a former vice president at the Bank of New York from 2013 to 2015, said permitting crypto and payment companies to have banking charters does “raise concerns about bringing more firms under federal banking regulation and increasing Fed exposure.”

But he said such risks could be mitigated by removing some of the benefits offered to traditional banks. Garratt noted that the Fed could, for instance, provide access to payment settlements but not offer certain lines of credit usually given to banks, referring to remarks by Federal Reserve Gov. Christopher Waller in October.

 

 

Incoming Kraft Heinz CEO says he endorses split, reserves right to improve it

NEW YORK, Dec 16 (Reuters) – Incoming CEO , who previously led cereal maker , said in an interview with Reuters that he endorses the company’s split into two companies and “reserves the right” to improve the plans.

“I’m looking forward to executing it, I think it’s absolutely the right thing to do,” Cahillane said, adding he thinks it will add value to both the condiments and spreads , which includes Heinz ketchup, and the grocery division covering staples like Velveeta cheese.

Cahillane, who oversaw the split-up of Kellogg’s snacks and cereals businesses, added, “We reserve the right to improve upon the plans, make them better, by studying it and having the discussions with all involved.”

“If there’s any changes, we’ll be very transparent about that,” he added.

Some analysts and investors have questioned how Kraft Heinz’s stable of brands was split up between the two companies. For example, Kraft macaroni and cheese, which has seen its market share slip, is included in the condiments unit, which is projected to be faster growing.

Kraft Heinz announced on Tuesday that Cahillane would join the company on January 1, with current CEO Carlos Abrams-Rivera moving into an adviser role until March 6.

(Reporting by Jessica DiNapoli in New York, editing by Deepa Babington)

 

Unemployment rate rises, signaling weakness in the economy

Summary

  • climbed to 4.6%, the highest since 2021
  • Job losses in October tied largely to federal worker departures
  • slowed to 3.5% as pressures persist
  • Health care and construction added jobs, while federal payrolls fell

The economy is flashing new warning signs, as the shed jobs over October and November, and the unemployment rate ticked up to 4.6 percent, the highest level since 2021.

Job gains of 64,000 in November exceeded expectations but only partially offset the loss of 105,000 jobs in October. Those losses, the sharpest since the covid pandemic-era recession, reflected the exit of tens of thousands of federal workers who took a deferred resignation package earlier this year.

The long-awaited by the Labor Department was delayed because of the federal government shutdown, creating headaches for economists and policymakers trying to assess how fast the labor market slowed this fall, as President Donald Trump’s economic policies, including higher tariffs and immigration enforcement, continue to take hold.

Meanwhile, wage growth cooled significantly in November, reflecting new strain on U.S. households as inflation remains elevated. Average hourly wages have risen by 3.5 percent over the past 12 months, to $36.86 an hour.Ask The Post AIDive deeper

Also, job creation in August was revised down by 22,000, showing the economy shed 26,000 jobs that month. September job gains were also revised lower by 11,000 to 108,000.

“Today’s report showed overall stagnant growth,” said Nicole Bachaud, labor economist at ZipRecruiter. “This really points to the challenges in the policy landscape that businesses are going up against, tariffs, geopolitical uncertainty, inflation that’s staying really stubborn.”

The unemployment rate has risen this year, from 4 percent in January to 4.6 percent in November, as more Americans, some of whom are reentering the labor market, struggle to find opportunities. The unemployment rate rose sharply for African Americans and teenagers. Rising unemployment for those groups often serves as a bellwether for a broader economic downturn.

“The fact that the unemployment rate has gone up [so much] adds to the realization of what we’re seeing in consumer attitudes that even as the economy grows, most Americans don’t feel very good about it,” said Diane Swonk, chief economist with the tax and accounting firm KPMG.

The report does not contain the unemployment rate for October because the government could not collect survey data during the shutdown, a first for the agency since the survey began in 1948.

The highlighted the bright spots in the jobs report. “THE BEST IS YET TO COME!” the White House posted on social media, highlighting growth in the private sector, the shrinking of the federal government and jobs going to “Americans, not illegals.”Ask The Post AIDive deeper

Some economists have noted that there is little evidence that U.S.-born workers are picking up jobs abandoned by immigrants who have left the country.

appeared to mostly brush aside the jobs data as stale news, with major stock indexes wavering midmorning between minor gains and losses.

Health care continued to lead jobs gains in November, adding 46,000 positions. Construction payrolls grew by 28,000 jobs and social assistance added 18,000 positions. But transportation and warehousing and federal government payrolls lost jobs in November.

Since January, the federal government has lost 271,000 jobs, with more than half of those losses registered in October.

The manufacturing sector also shrank in November under the weight of tariffs and has lost jobs most months this year, even as the Trump administration argues that its trade war will revive American manufacturing. Leisure and hospitality, which has helped buoy the labor market this year, shed positions, as consumers have pulled back on discretionary spending.

The labor market has been softening since June, with hiring sputtering to near the lowest level in more than a decade and the unemployment rate rising. Headwinds including tariffs, inflation and cautious consumer spending have prompted employers to suspend hiring. Meanwhile, some white-collar employers have laid off employees or announced cuts this fall, especially amid the growth of , which employers can use to replace jobs. Still, filings for unemployment insurance, the closest to a real-time gauge for layoffs in the broader economy, remain low, although they ticked up last Thursday.

“Businesses need certainty when they go and make their hiring decisions and their investment plans, and when there’s uncertainty in the economy, it just makes things harder,” said Sam Kuhn, an economist with the recruitment software company Appcast.

The report buttressed the ‘s decision to cut interest rates last week, for the third time this year, because of a softening labor market. Federal Reserve Chair Jerome H. Powell warned that official statistics could be overstating job creation by 60,000 jobs a month, calling jobs data “a complicated, unusual and difficult situation.”

But so few are entering the labor market, in part because of the Trump administration’s immigration enforcement, that the economy no longer needs to pump out hundreds of thousands of jobs a month to keep the unemployment rate steady. Economists say it’s possible that creating around 50,000 jobs a month could keep the unemployment rate stable.

“The unemployment rate would be much higher right now without the absence of immigrants that we’re seeing and the loss of participation of older workers retiring,” said Swonk, the KPMG economist.

A number of high-profile layoffs this fall have fueled unease about the state of the labor market. The rate of layoffs rose substantially in October, a separate jobs report released by the Labor Department on Monday showed. But preliminary estimates from the Cleveland Federal Reserve show that around 20,000 Americans in 16 states received layoff notices in November through the Warn Act, a significant decrease from about 36,000 reported in October for the same states.

In another sign of labor market fragility, the number of Americans working part-time who would prefer full-time work surged by more than 900,000 from September to November.

And the number of Americans who have been unemployed for less than five weeks jumped to 2.5 million in November, the highest level since 2020.

“If you’re a worker that just freshly got laid off or are looking for new work, there’s not a lot of companies hiring right now,” Kuhn said.

– – –

Andrew Ackerman contributed to this report.

 

Roomba maker iRobot files for bankruptcy protection; will be taken private under restructuring

Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process.

IRobot, which became well known for its robotic vacuums, has struggled of late, dealing with increased competition, layoffs and a declining stock price. In 2022 Amazon announced that it had agreed to buy iRobot for about $1.7 billion, but that deal was called off last year. Amazon blamed “undue and disproportionate regulatory hurdles” after the European Union signaled its objection to the transaction.

Amazon said at the time that it would pay iRobot a previously agreed termination fee of $94 million and iRobot said that it would undergo a restructuring to help stabilize the company.

iRobot said Sunday that it is now being acquired by Picea through a court-supervised process. Picea, or Shenzhen PICEA Robotics Co., Ltd., is iRobot’s primary contract manufacturer.. With facilities in China and Vietnam, Picea has built and sold more than 20 million robotic vacuum cleaners.

“The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners,” iRobot CEO Gary Cohen said in a statement.

iRobot said it will continue to operate as normal during the Chapter 11 process and doesn’t expect any disruption to its app functionality, customer programs, global partners, supply chain relationships, or ongoing product support.

The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.

In premarket trading, iRobot shares slid nearly 70% to $1.31.

Ford retreats from EVs, takes $19.5 billion charge as Trump policies take hold

Dec 15 (Reuters) – Ford Motor said on Monday it will take a $19.5 billion writedown and is killing several electric-vehicle models, in the most dramatic example yet of the auto industry’s retreat from battery-powered models in response to the ‘s policies and weakening EV demand.

The Dearborn, Michigan-based company said it will stop making the F-150 Lightning in its electric vehicle form, but will pivot to producing an extended-range electric model, a version of a hybrid vehicle called an EREV, which uses a gas-powered generator to recharge the battery. The company is also scrapping a next-generation electric truck, codenamed the T3, as well as planned electric commercial vans.

Instead, Ford said it will pivot hard into gas and hybrid models, and eventually hire thousands of workers, even though there will be some layoffs at a jointly owned Tennessee battery plant in the near term. The company expects its global mix of hybrids, extended-range EVs and pure EVs to reach 50% by 2030, from 17% today.

Ford will spread out the writedown, taken primarily in the fourth quarter and continuing through next year and into 2027, the company said. About $8.5 billion is related to cancelling planned EV models. Around $6 billion is tied to the dissolution of a battery joint venture with South Korea’s SK On, and $5 billion on what Ford called “program-related expenses.”

The automaker also raised its 2025 guidance for adjusted earnings before taxes and interest, to about $7 billion, up from a previous range of $6 billion to $6.5 billion.

Ford’s shift reflects the auto industry’s response to waning demand for battery-powered models, after car companies plowed hundreds of billions of dollars into EV investments early this decade. The outlook for electrics dimmed significantly this year as U.S. President Donald Trump’s policies yanked federal support for EVs and eased tailpipe-emissions rules, which could encourage carmakers to sell more gas-powered cars.

U.S. sales of electric vehicles fell about 40% in November, following the September 30 expiration of a $7,500 consumer tax credit, which had been in place for more than 15 years to stoke demand. The Trump administration also included in the massive tax and spending bill that passed in July a freeze on fines that automakers pay for violating fuel-economy regulations.

“Rather than spending billions more on large EVs that now have no path to profitability, we are allocating that money into higher-returning areas,” said Andrew Frick, head of Ford’s gas and electric-vehicle operations.

The F-150 Lightning rolled off assembly lines starting in 2022 with much fanfare – comedian Jimmy Fallon wrote a song about the truck. Ford increased production of the model to meet an influx of 200,000 orders, but sales haven’t kept pace. The company sold 25,583 Lightnings through November of this year, a 10% decrease from the prior-year period.

The successor to the F-150 Lightning, the T3 truck, was supposed to be built ground-up for production at a new complex in Tennessee, and be a core part of Ford’s second-generation EV lineup. Ford is now replacing production of the EV pickup with new gas-powered trucks starting in 2029 at the Tennessee factory.

Ford effectively killed the entirety of its announced second-generation of EV models with Monday’s announcement. For its future EV lineup, the company is shifting focus to more affordable EV models, conceived by a so-called skunkworks team in California. The first model from that team is slated to be priced at about $30,000 and go on sale in 2027. This midsize EV truck is being built at Ford’s Louisville plant.

 

(Editing by Mike Colias; Editing by Lisa Shumaker)

 

Nasdaq seeks to extend trading hours, as Wall Street gears up for 24/7 move

NEW YORK, Dec 15 (Reuters) – , one of the world’s largest exchanges that is home to tech companies Nvidia, and Amazon, is planning to submit paperwork with the U.S. Securities and Exchange Commission on Monday to roll out round-the-clock trading of stocks, as it looks to capitalize on a global demand for U.S. equities.

Investor demand for nonstop trading in U.S. stocks has surged in recent years, prompting regulators to introduce new rules and green-light proposals from major exchanges to enable trading beyond normal market hours. The U.S. represents almost two-thirds of the market value of listed companies globally, while total foreign holdings of U.S. equities reached $17 trillion last year, according to data compiled by Nasdaq.

Nasdaq’s filing with the SEC will mark its first formal step towards rolling out round-the-clock trading, five days a week. In March, Nasdaq President Tal Cohen said the exchange operator had started discussions with regulators and expected to launch nonstop five-day-a-week trading in the second half of 2026. The New York Stock Exchange and Cboe Global Markets also recently announced plans to move to round-the-clock trading for stocks.

“There’s been this trend towards globalization for some time and we’ve seen the U.S. markets themselves become much more global,” Chuck Mack, senior vice president of North American markets at Nasdaq, told Reuters.

TWO DAILY TRADING SESSIONS

Nasdaq plans to expand trading hours of stocks and exchange-traded products from 16 hours to 23 hours, five days a week. Currently, Nasdaq operates three daily sessions during weekdays: the pre-market session from 4 a.m. to 9:30 a.m. Eastern U.S. time, the regular market session from 9:30 a.m. to 4 p.m., and the post-market session from 4 p.m. to 8 p.m. When Nasdaq moves to 23/5, it plans to operate two trading sessions, with the day session starting at 4 a.m. and ending at 8 p.m., followed by a one-hour break for maintenance, testing, and clearing of trades. The night session will kick off at 9 p.m. and end at 4 a.m. the following calendar day.

The day session will continue to include pre-market, regular, and post-market trading hours, and will feature the opening bell at 9:30 a.m. and the closing bell at 4 p.m. In the night session, trades executed between 9 p.m. and 12 a.m. will be considered trades for the following day.

Under the new plan, the trading week will start on Sunday at 9 p.m. and end on Friday at 8 p.m. after the day session.

The successful rollout of round-the-clock trading hinges on upgrades to the securities information processor that displays the most accurate stock quotes on U.S. exchanges. The central clearing hub, the U.S. Depository Trust and Clearing Corp., is scheduled to roll out nonstop clearing for stocks by the end of 2026.

Advocates of the broader move to round-the-clock trading have argued it will allow investors, especially those based outside the U.S., to react more quickly to developments that happen outside regular market hours. Major banks, however, are cautious about the push toward nonstop trading, citing concerns around lower liquidity, heightened volatility, and uncertainty over returns on investment.

‘OWN TERMS, OWN TIME ZONES’

While volumes during extended hours are usually much lower than during regular hours, demand has been booming for trading during overnight U.S. hours, Mack said. Investors who want to trade 24/7 currently rely on off-exchange trading venues, or alternative trading systems, such as Blue Ocean, Bruce ATS, and OTC Moon.

“We see these things manifest themselves in the U.S. equities market, through increasing demand for companies specifically listed on Nasdaq from geographies outside of the U.S., much more now than in the past,” Mack said. “If you think of those investors around the world, they want to access this huge market on their own terms and they want to do it in their own time zones.”

Trading hours on large stock exchanges such as the NYSE date back more than a century, to when trades were placed in person on trading floors by brokers who took orders on paper. While most stock trading is now done electronically, trading hours on most U.S. exchanges have largely remained the same over the decades.

Earlier this year, Nasdaq filed with U.S. regulators to introduce trading of tokenized stocks, as it sought to double down on a boom in tokenization amid an easing of crypto regulations under the .

“When there’s market stress and volatility, the traffic in the market and the activity levels pick up significantly. We have built systems that are extremely resilient, have a lot of throughput, and have the ability to handle those types of situations,” Mack said.

(Reporting by Anirban Sen in New York; Editing by Megan Davies and Rod Nickel)

 

Leidos names AI chief technology officer

Reston-based Fortune 500 has named Theodore “Ted” Tanner Jr. its next , according to a Monday announcement.

Previously, Tanner worked as chief and strategy officer at , an provider for defense, security and critical infrastructure headquartered in McLean.

“Ted is a high-impact leader who pairs entrepreneurial creativity with execution discipline to solve tough deep-technology challenges,” Tom Bell, Leidos CEO, said in a news release.

Tanner will assume the role Jan. 5, 2026. He succeeds Jim Carlini, Leidos’ since 2019. Carlini will remain a senior adviser to Bell on national security matters.

At BigBear.ai, Tanner led the development of AI and machine learning capabilities for the U.S. Department of Defense, which is also referred to as the Department of War, as well as for intelligence and civilian agencies. Previously, Tanner worked at , and IBM Watson Health. He also co-founded startups PokitDok, a platform-as-a-service company for health care, and Belief Networks, a machine learning and natural language processing as-a-service company.

Currently, Tanner sits on the scientific advisor board of QuiverBioscience, a Massachusetts-based company that uses technology to develop medicines for the brain. He holds 18 U.S. patents in artificial intelligence, machine learning and other technologies.

Earlier this year, Leidos unveiled its NorthStar 2030 growth strategy, which is designed to differentiate the company in the space and maritime industries, digital modernization and full-spectrum cyber, managed health services, mission software and energy infrastructure. “To a large extent, the progress in those areas, and others, is fueled by driving outcomes through proven AI,” the company stated in Monday’s news release.

With 47,000 employees worldwide, Leidos reported $16.7 billion in revenue for the fiscal year that ended Jan. 3.

Sen. Cruz threatens another shutdown unless restrictions on military flights are approved

WASHINGTON D.C. (AP) — Republican Sen. Ted Cruz threatened Monday to hold up funding to keep the federal government open after the end of January if reforms don’t pass by then to tighten up the rules on military flights and help prevent deadly crashes like the collision between an airliner and an Army helicopter over Washington, D.C., that killed 67.

Cruz and Democratic Sen. Maria Cantwell held a news conference Monday with some of the victims’ families to urge Congress to strip provisions from a massive defense bill that would allow military aircraft to get a waiver to return to operating without broadcasting their precise location, just as they were before the Jan. 29 crash.

It’s not clear if Republican leadership will allow the defense bill to be amended because that would send the bill back to the House and could delay raises for soldiers and other key provisions. But if the defense bill passes as written now, Cruz said, he will hold up government funding until the bill he introduced last summer is passed to fix the problem.

Cruz said the defense bill provision “was airdropped in at at the last moment,” noting it would unwind actions taken by President Donald Trump and Transportation Secretary Sean Duffy to make the airspace around D.C. safer.

“The special carve-out was exactly what caused the January 29th crash that claimed 67 lives,” Cruz said.

Before the crash, military helicopters routinely flew through the crowded airspace around the nation’s capital without using a key system called ADS-B to broadcast their locations. The Federal Aviation Administration began requiring all aircraft to do that in March.

Transportation Safety Board Chairwoman Jennifer Homendy, senators, airlines and key transportation unions all sharply criticized the new helicopter safety provisions in the defense bill last week when they came to light.

Cruz and Cantwell said they only became aware that the sprawling military bill would have that language after it was finalized by congressional leaders last week. They began strenuously objecting as soon as they realized it contained the exemptions.

The families of the crash victims said this bill would weaken safeguards and send aviation safety backwards.

“Our families know the consequences of systemic failures, and we cannot accept a policy change that makes our skies less safe,” the families said in a statement.

The NTSB won’t release its final report on the cause of the crash until sometime next year, but investigators have already raised a number of key concerns about the 85 near misses around Ronald Reagan National Airport in the years before the crash and the helicopter route that allowed Black Hawks to fly dangerously close to planes landing at the airport’s secondary runway.

The bill Cruz and Cantwell proposed to require all aircraft to broadcast their locations has broad support from the White House, the FAA, NTSB and the victims’ families.