WASHINGTON GOES TO WAR — The Senate passed a second coronavirus relief bill
today. Now the real dealing starts. GOP leadership is engaged in fevered talks along with White House officials and Democrats to produce quickly a third massive package that would inject over $1 trillion into an American economy that is almost certainly in recession right now and may see the sharpest job losses in history in the next two months.
Some Wall Street analysts estimate that as much as half of American jobs are in industries that could be at risk of layoffs, fewer hours and lower pay as large swaths of the economy simply shut down — perhaps for weeks if not months — to slow the spread of the virus.
GM and Ford announced production halts today, another brutal gut punch to the economy.
Wall Street is banking on a bill hitting President Donald Trump's desk by early next week. It won't be as simple a task as some on Wall Street hope.
Politics are absolutely at play in the stimulus fight, making swift passage no lock.
The White House wants $250 billion in direct payments to Americans starting April 6, with another $250 billion round on May 18. The proposal from Treasury also includes $200 billion in industry aid, including $50 billion for airlines, with conditions on executive pay along with aid to small and mid-size businesses.
Democrats are pushing for stock market and climate change conditions
on any airline industry aid, per our Gavin Bade. Senate Minority Leader Chuck Schumer is demanding that any federal money directed to airlines address stock buybacks. Democrats are also focused on limits on executive compensation and giving Americans stock in the airlines. Conservatives don't view buybacks as a bad thing. So that's a potential sticking point.
Democrats are also demanding a much broader paid sick leave policy in order to get the giant package to the 60 votes needed for passage. That's another area where multiple Republican senators could balk, fearing that it would put too much pressure on small businesses and actually lead to layoffs.
Eight GOP senators voted against the second stimulus bill largely citing the burdens it could put on small businesses. Some even still say they worry about the impact on the deficit though that has generally faded as a concern in Trump's Washington. The idea of doing a payroll tax cut — controversial among some members — has apparently been dropped, removing a potential flash point.
The stakes are immense.
D.C. can't mess this one up. But even a trillion dollar-plus stimulus and massive action from the Federal Reserve will likely not be enough to prevent massive job losses and a second quarter economic decline that could hit 6 percent or more. JPMorgan analysts suggested the economy could contract by 14 percent (!) in the second quarter. The mind reels at such a number.
Deutsche Bank's Torsten Slok
now sees "a severe global recession" and drops in GDP that "substantially exceed anything previously recorded going back to at least World War II."
What we're watching — For Wall Street, everything depends on reports about the spread of the virus along with news out of Washington on the stimulus package. Negative news on either front could trigger more multi-thousand point declines and would increase calls for a full trading halt.
Washington really has no choice but to act and act fast. It probably will. The alternative is too terrible to imagine. But brace for some drama and the usual miscommunication between Wall Street and Washington, which rarely speak the same language.
There will probably be several days of haggling that Wall Street will misperceive as indicators that the rescue package is in trouble, potentially leading to sharp down swings.
There is more bipartisan support for getting the next coronavirus bill done. And none of the differences seem irreconcilable. Still, every trader on Wall Street will be glued to their TVs over the next several days and gobbling up every nugget of news on the legislation's progress.
... We'll also be looking at weekly initial unemployment claims which come out at 8:30 a.m. Thursday morning. They are likely to look ... quite bad. And every bit of scary economic news will pressure Congress to ditch any partisan squabbles and just get the thing done.
Businesses are shuttering. The market is teetering. How bad could it get? Ben breaks down where the economy is headed — and how the U.S. could drop more than $1 trillion to fix it, in the latest edition of POLITICO Dispatch.
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The country's manufacturers tell us that they plan on asking the feds for a $1.4 trillion fund to provide interest free loans to companies affected by the crisis. The companies say they're key to keeping shelves stocked during the crisis, but the unprecedented shutdown is rattling many manufacturing companies. "This is a crisis unlike anything we've seen, and it demands a response of historic proportion," said Jay Timmons, president and CEO of the National Association of Manufacturers.
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DESPERATE TIMES — Desperation is not the approach anyone wants to associate with the health care system in the midst of a global pandemic. But even federal agencies with otherwise major clout are acting on the old adage about desperate times. David Lim reports that the FDA is taking to Twitter to track whether testing supplies are coming up short. Wading into the Wild West of social media for help may seem unsophisticated. But thanks to a decades-old law, the FDA cannot require device manufacturers to report shortages in the same way it can for drug makers.
Hospitals aren't just short on supplies. They are short on people. Hospitals are taking extraordinary measures, from calling on retirees for help to assigning medical students to answer the phones, Rachel Roubein and Joanne Kenen report . The Trump administration is trying to intervene, offering new rules today allowing doctors to practice across state lines, without going through layers of recertification and licensing. And CMS, the Center for Medicare & Medicaid Services, is ordering a halt to most elective procedures, which will also free up people and resources. "But the number of physicians is finite — and older ones, as well as those with their own health conditions, are at risk from Covid-19. That means hospitals will have to figure out how to steer any surging workforce, who should concentrate on coronavirus admissions and who should take care of people who still come in with other serious diseases and injuries."
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Medical personnel talk to a person at a drive-thru coronavirus testing station in New Orleans. | Getty Images
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The shift is more than just rhetorical — the White House is mobilizing a massive response including a $1 trillion stimulus package, marshaling military resources and deploying military ships to virus hotspots. The administration is also suspending foreclosures and evictions as the virus continues to rage.
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$980,150,000. Almost $1 billion of the Trump administration's $48 billion request for coronavirus-related agency funds can be used for cleaning-related work. That's what Bianca Quilantan tallied by combing through a 118-page request from acting OMB Director Russ Vought sent this week. While most of the sanitizing requests are lumped in with expanding telework for federal agencies, the request mentions that amount can be used for cleaning, sanitizing, sterilizing or disinfecting government agency offices and facilities, schools, national parks, airports, border quarantine facilities and tribal facilities.
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GO GLOBAL ... FROM HOME: Global Translations, presented by Morgan Stanley, serves as your guide to understanding the global issues that impact us all without having to travel further than your inbox! You'll learn more about the power players and trends shaping our planet in ways you can apply to your own work and life. In the latest edition, author Ryan Heath ties together the global response to the ongoing coronavirus outbreak and the ways it's affecting 2020 election season in the United States, the health and financial crisis in Italy, and more. SUBSCRIBE TODAY.
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With the help of The COVID Tracking Project — a volunteer-run accounting of every coronavirus test conducted in America — POLITICO is monitoring how many Americans have been tested in all 50 states. Our live tracker will continue to update with the latest numbers across the country as they come in.
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Beatrice Jin | POLITICO
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NOT EVERYTHING IS BIGGER IN TEXAS — Top Republican leaders in the Lone Star state love to tout Texas's hands off government and focus on personal freedom. Now Covid-19 is testing the limits of that small government philosophy, reports your newsletter author from Austin. Public health officials are calling on federal and state leaders to order lockdowns, close schools and ramp up testing. Texas Gov. Greg Abbott is so far leaving those hard decisions to local leaders, though he's planning to announce new statewide restrictions Thursday.
As a result, there's been a patchwork of school and business closure regulations, state beaches are still entertaining Spring Break revelers and health care providers say they lack critical equipment.
The state has the highest uninsured rate in the country, so people don't have a place to turn to when they get sick with symptoms and are burdening emergency rooms when they are most needed. Texas officials have been sluggish in ramping up testing compared with other states, which could make the Lone Star state vulnerable to a major, uncontrolled outbreak.
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'WHIPLASH MOMENT' — After years of vilifying Silicon Valley giants, the Trump administration is courting them to track and slow the spread of the virus, senior technology reporter Nancy Scola told us. And tech companies are eager to get back into Washington's good graces after the Cambridge Analytica scandal tarnished the industry's reputation.
"It's a whiplash moment," Scola said.
So far, companies have donated money, pledged to use their AI to analyze research papers on coronavirus and worked to pull down false information about Covid-19. But tech giants could go one step further and use location, search engine and the reams of other personal data they have to track the virus spread.
Something similar has been done before — From 2008 to 2015, Google used CDC numbers and its own search-term data to find flu hotspots before they popped up in federal agencies' own information. Such a resource could go a long way towards helping public health officials figure out how to contain the disease spread. It would also open up tech giants to the charge that they hold the keys to too much personal information and are willing to turn it over to the government when the going gets tough.
"It's potentially a tremendous public health asset," Scola said. "But it ends up feeding into the same charge that they have been trying to fight for years — that they are spying on us."
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THE CORONAVIRUS GENERATION: "There are two large reasons to believe the political echo of this crisis will last much longer than the crisis itself," John F. Harris writes in his Altitude column . "The first is that many of the people whose expectations and routines are most dramatically upended by the pandemic are students. The interruption, and in some cases irreplaceable loss, of important experiences in their education, as campuses empty and untold events are canceled, will likely shape their consciousness in more lasting ways than for the rest of us. ... More profoundly, the dynamics of the coronavirus moment likely will resemble the dynamics of other great public policy issues shadowing the next generation. In particular, the global pandemic and the harsh choices it imposes offer — in highly concentrated fashion in coming months — much the same choices that responses to global climate change will impose in coming decades."
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A message from Ro:
The future of healthcare is one in which providers are empowered by technology, unburdened from administrative paperwork, and able to practice medicine where and when patients need it most. Ro is striving to make this a reality every day. To meet the needs of COVID-19, Ro has responded to the public crisis with a free telehealth assessment following CDC and WHO guidelines, to triage patients concerned about the virus. Telehealth can help slow the spread of COVID-19 and keep the "worried well" and those with mild symptoms from overwhelming the healthcare system. Learn more at
Ro.co. |
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