POLITICO NIGHTLY: Contagion locked up

By Renuka Rayasam with Josh Gerstein Presented by The Mortgage Bankers Association PRISON OUTBREAK — President Donald Trump’s ex-campaign chairman Paul Manafort got out of prison today , drawing attention to the largely hidden coronavirus crisis behind bars and squishy rules for pandemic paroles. Critics see political favoritism at work . They note that Manafort — sentenced to seven-and-a-half years — had served a bit less than two and wouldn’t otherwise have been on the priority list for release for at least a year. Current federal guidelines aimed at slowing the spread of coronavirus call for home confinement for some prisoners who have served at least half of their sentences or have less than 18 months to go. Manafort wasn’t due out until 2024. Beyond the questions of a double standard is how the virus has spread like wildfire in the close quarters of many prisons. At one federal prison in Lompoc, Calif., more than 75 percent of inmates have tested positive — so many that authorities built an on-site hospital. More than 4,100 federal inmates tested positive at some point, and 51 have died from Covid-19. The numbers mushroomed in the past week or so, with broader testing finally rolling out. An even bigger problem looms in state and local jails and prisons, which account for more than 90 percent of the incarcerated population. A single prison in Marion, Ohio, reported more than 2,100 cases. The statistics suggest virtually every inmate there has been infected. States and localities have ordered special releases of inmates . The Justice Department has, too, moving more than 2,500 inmates to home confinement in the last six weeks or so. A little-noticed emergency provision in federal coronavirus rescue aid legislation gave Attorney General Bill Barr authority to send home prisoners, like Manafort, who otherwise would not have served enough time to qualify for home confinement. Some federal prisoners who’ve served as little as 25 percent of their sentences qualify for release under the current criteria, which are aimed at protecting public safety, but seem certain to exacerbate racial and ethnic disparities. The one wild card: Trump. When he was asked in April about the virus’ dangers to prisoners, he downplayed the risks and claimed most prisoners are young and unlikely to get badly ill. Then he attacked state and local officials for releasing too many inmates, while boasting: “I have not done that at all … I don't like that. I don't like it.” He even said he might take some unspecified action to block those releases. The administration is appealing a ruling from a federal judge ordering the transfer or release of hundreds of inmates after a virus outbreak in an Ohio prison. It’s not clear if Trump even knows that his administration has sent about 2,000 inmates home since he bragged about his opposition to releases. Also unclear is whether the spate of attention to Manafort’s release could prompt the president to reassess his view that prisoners are getting off easy because of the pandemic. Welcome to POLITICO Nightly: Coronavirus Special Edition. This Atlanta reality star has been charged with bank fraud for using PPP money for personal expenses including a Rolex, Rolls Royce and paying child support. Reach out with tips: rrayasam@politico.com or on Twitter at @renurayasam.   A message from The Mortgage Bankers Association: Individual Needs. Individual Solutions. We understand that mortgage relief is not one-size-fits-all. The COVID-19 pandemic has left many Americans in unique financial situations. That’s why we encourage you to contact your mortgage company if paying your mortgage poses a financial hardship. There are options to help meet your needs. MBA.org/consumerinfo   First In Nightly BACK TO THE FUTURE — Health insurers that fled Obamacare in the law’s early years are now looking to the market exchanges as their best hope in a crashing economy, health care reporters Dan Goldberg and Susannah Luthi write. With tens of millions of people losing their jobs — and their health coverage — along with major cuts to Medicaid, the stability of a government-subsidized private insurance program could be a lifeline to a $1 trillion-plus industry looking to turn profits and keep enough healthy enrollees. It’s a major turning point after years of political attacks and volatility for the law, which the Trump administration is fighting to end in court. The ACA business "is as vital and viable as it's ever been," Centene CEO Michael Niedorff told investors when he raised the health insurer’s revenue forecast for this year, even with unemployment reaching levels not seen since the Great Depression. Nightly Number 26.8 million The number of people who could lose employer-sponsored insurance as a result of being laid off during the pandemic, according to the Kaiser Family Foundation. Of them, 6.1 million are children.   JOIN TOMORROW - WHY IS THE INCARCERATION RATE OF WOMEN RISING? Women are the fastest-growing segment of the incarcerated population in the United States, increasing at a rate nearly double that of men over the past 35 years. Join Women Rule Editorial Director Anna Palmer tomorrow at 3 p.m. EDT for a virtual conversation with April Grayson, campaign surrogate and statewide coordinator for the Young Women's Freedom Center; Scott Budnick, founder of the Anti-Recidivism Coalition (ARC); and Emily Ratajkowski, model, actress and activist. Learn about the challenges women face behind bars and how they fit into the criminal-justice reform movement. Have questions? Submit yours by tweeting it to @POLITICOLive using #AskPOLITICO. REGISTER HERE.     From the Health Desk PASS FAIL — A rapid coronavirus test used to screen White House staff and visitors may miss up to half of infections detected by other tests on the market, writes health care reporter David Lim. The preliminary research from New York University, which has not been peer reviewed, found that Abbott’s test missed a third of infections when sample swabs were stored in chemicals and more than 48 percent when sample swabs were kept dry. HHS testing czar Brett Giroir touted the Abbott test at a Rose Garden press conference Monday as “highly sophisticated.” More than 235,000 of the rapid tests have been sent to public health labs across the country and over 90,000 have been provided to the Indian Health Service, he said. Abbott spokesperson Darcy Ross said that the NYU researchers used the rapid test platform “in a manner that it’s not intended to be used.”     Agriculture SWAP MEAT — Plant-based meat is booming, spurred by slaughterhouse shutdowns, supermarket shortages and other pandemic-induced problems in animal-based meat supply chains, Michael Grunwald emails us. Impossible Foods expanded its retail footprint 18-fold last month, while Beyond Meat has more than doubled its revenues from last year. The boom was happening even before coronavirus tore through more than 100 U.S. meat and poultry processors, cutting U.S. pork production in half and limiting Costco customers to three meat items per visit. A record $824 million was invested in alternative protein companies in 2019, and the Good Food Institute reported today that a stunning $930 million was invested in just the first quarter of 2020. Ethical and environmental considerations aside, the business of raising, killing and transporting animals for human consumption is an extraordinary logistical challenge, and the virus has exploited its vulnerabilities, ravaging assembly lines crammed with laborers who debone, decapitate and eviscerate at close quarters. Plant-based meat requires innovative product development — it’s hard to replicate beef or pork without creatures that moo or oink — but the manufacturing is comparatively simple. “The magic of the Impossible Burger doesn’t happen in the plant,” says Impossible Foods Chief Communications Officer Rachel Konrad. “Our magic is in the lab.” Fake meat will keep growing after the pandemic, because consumers like it and technologists keep improving it. The question is whether it will grow fast enough to change the meat industry or save the planet. Substitutes like oat milk and almond milk are now nearly 15 percent of the dairy market, but alternatives are still less than 1 percent of the $200 billion meat market. But meat shortages might create some unlikely first-time plant-based consumers. “Yes, they’ll see how great the products are,” Paul Shapiro, CEO of The Better Meat Company, says. “But they also might start to see themselves as the kind of people who enjoy plant-based meat. That’s how habits change.” An audience during the first live theater show in the Czech Republic, as the country lifted more regulations to allow public events of up to 100 people. | Gabriel Kuchta/Getty Images On The Economy THE FED, UNRESERVED — The Dow Jones industrial average dove 500 points today after Federal Reserve Chair Jerome Powell issued a dire warning about the future of the U.S. economy — which is expected to take another hit when the latest unemployment figures emerge Thursday morning. Powell made it clear he believes Congress, deeply divided over another rescue, needs to pass a massive stimulus package to stave off a painful recession that could leave lasting damage. The Fed already has spent trillions and gotten creative about keeping the economy afloat. Your host Slack chatted with financial services reporter Victoria Guida about Powell’s plain-spokenness and whether the Fed can stay above the fray. This interview has been edited. How is the Fed’s role different than in the 2008 banking collapse? Its role here is much broader. The last crisis was about the implosion of the financial sector, and it was the Fed’s job to get that under control. Here, the problem is external (AKA the pandemic). A lot of what it’s been doing since the pandemic started is designing programs to make emergency loans to businesses, as well as state and local governments. It’s a pretty big deal: In some cases the Fed will be lending directly to businesses and municipalities. How does Powell see the Fed’s role right now? Well, that’s a fascinating piece of all of this. The Fed is independent but part of how it’s able to maintain that independence is by keeping its responsibilities relatively narrow. But all of this is starting to go beyond that, and the Fed is really sort of carrying out policy on behalf of the Treasury Department, because Congress has basically directly asked the Fed to help out. I think Powell is aware he’s probably going to get yelled at for mid-crisis decisions that don’t end up sitting well with people, but his approach seems to be we’ve got to do everything we can to save the economy. How does Trump’s pre-crisis criticism of Powell play into what’s happening now? Oddly enough, I think the fact that Powell stayed out of the political fray and didn’t engage with Trump’s criticisms helped bolster his credibility on both sides of the aisle. I think putting the Fed in charge of these lending programs gave lawmakers some level of comfort that the decisions would be nonpartisan, even if they end up disagreeing with some decisions. Powell seems to be less of a cipher than his predecessors. Is that the case? He was trained as a lawyer and made his money as a private equity investor, so he thinks about markets much more from a practical perspective more than a theoretical one. You’re absolutely right that he places a much bigger emphasis on speaking in English rather than economics jargon. A lot of experts see that as a positive in this crisis. What tools does the Fed have left? Can they cut interest rates to below zero? So, yeah, the Fed cut interest rates essentially to zero in March. So while it’s theoretically possible, Powell has ruled out negative rates for now pretty explicitly. The Fed has the ability to buy larger amounts of long-term government debt and mortgage-backed securities down the road, but for now its main tools will be these emergency lending programs it’s setting up. After the immediate crisis is over, there is a real question as to how much more the Fed can do to help the economy, since borrowing is already so cheap and people and businesses already have so much debt. Is there any behind the scenes disagreement on the Fed’s response? There almost surely is, but we won’t learn about most of that until later. Transcripts of meetings are released five years after the fact. Talking to the Experts What can public transit operators do to regain riders’ trust? “ I think New Jersey Transit has a long way to go to build trust in ridership. They were having problems before this occurred, this has just magnified them tenfold. There were issues over maintenance of buses and trains prior to this in terms of cleanliness. Public transit is carrying all the essential workers to their jobs, which is a group of people who don’t have their own cars and have been forced to endure less social distancing on public transit. It is completely wrong in terms of servicing the people riding there, health-wise, because they are going into places where they could expose other people.” — New Jersey state Sen. Loretta Weinberg (D-Bergen) as told to reporter Samantha Maldonado “It’s a combination of taking the appropriate measures and ridership being confident that those are the correct measures to make them comfortable. That may mean adding capacity. They may need to add additional buses to routes, additional trains to train routes so that there’s more room for people to spread out. Either way it’s going to be more expensive, and that doesn’t bode well for service boards or ridership. The last things service boards want to do is raise fees on their riders, be it train service or bus service. There will be serious financial considerations, and these service boards being able to adapt will be the norm for protecting riders.” — Illinois GOP state Sen. Donald DeWitte, minority spokesperson for the state Senate Transportation Committee, as told to Illinois Playbook author Shia Kapos “It will be incumbent on those of us who lead transit organizations to take big, bold steps to show that we are still the best option in town — still the most efficient and safest form of transportation in any city — but also the cleanest, the easiest to access, the most seamless experience. Like in any crisis, I already see great opportunity.” — Sarah Feinberg, interim president of the New York City Transit Authority and former Federal Railroad Administration, as told to Daniel Lippman   JOIN FRIDAY - HOW DOES THE GLOBAL ECONOMY START MOVING AGAIN? The pandemic has caused the global economy to come to a halt, triggering economic crises around the world. What happens next? Join Global Translations author Ryan Heath on Friday at 1 p.m. EDT for a virtual discussion with Kristalina Georgieva, managing director of the International Monetary Fund, focused on the trade-offs and investments needed to get the global economy moving again, the role that China can be expected to play, and how growing debt and deficits will impact the developing world. Have questions? Submit yours by tweeting it to @POLITICOLive using #AskPOLITICO. REGISTER HERE TO PARTICIPATE.     Covid-2020 LANDING THE RIGHT PUNCH — The presidential election rages on. Eugene Daniels talks to Alex Isenstadt about Trump’s efforts to find the right attack lines against former Vice President Joe Biden, with the backdrop of the nation’s fight against coronavirus. The Global Fight AFRICAN MIRACLE STARTS TO CRACK — All countries in Africa now have active coronavirus cases and African governments have won praise for locking down their countries before infections soared, helping their often developing health systems survive what was expected to be an onslaught. Young populations, warm weather and experience gained in the recent Ebola epidemic also have contributed to keeping the official death toll at barely 2,400 among 1.2 billion Africans. But weaknesses are emerging. South Africa, Ghana and Nigeria are starting to ease restrictions despite hundreds of daily new cases. Madagascar President Andry Rajoelina is hawking a coronavirus herbal remedy called Covid-Organics, based on plants with antimalarial properties. The concoction has been sold to Equatorial Guinea, Guinea-Bissau, Niger and Tanzania. Meanwhile, Tanzania’s president John Magufuli is in hiding, holding up regional coordination efforts, and claims there’s a plot to falsify test results in Tanzania. Ask The Audience Our question for readers this week: What does reopening look like where you live? Snap a photo sometime this week and send it to nightly@politico.com. We’ll share our favorites on Friday. Parting Images Stephen Voss for POLITICO THE HILL RETURNS — With the Senate back in session, but much of the country shut down because of the coronavirus, Capitol Hill doesn’t look like it used to. Photographer Stephen Voss walked the near-empty halls of the Capitol and its adjacent office buildings, capturing what Congress reporter Andrew Desiderio said “feels like [will] be the new normal for at least a long time.”   A message from The Mortgage Bankers Association: Individual Needs. Individual Solutions. We understand that mortgage relief is not one-size-fits-all. The COVID-19 pandemic has left many Americans in unique financial situations. That’s why we encourage you to contact your mortgage company if paying your mortgage poses a financial hardship. There are options to help meet your needs. Visit MBA.org/consumerinfo for more information on forbearance options.   Did someone forward this email to you? Sign up here.   Follow us on Twitter Renuka Rayasam @renurayasam   Follow us

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