POLITICO Pro held a conference call for subscribers on Thursday, March 12th to discuss the latest developments with the ever-evolving coronavirus outbreak.
POLITICO Pro reporters Zachary Warmbrodt, Adriel Bettelheim, Brianna Ehley, Ben Lefebvre and Brianna Gurciullo talked about the pandemic's effect on the stock market, the stimulus measures lawmakers are floating in response to the virus’ spread, how local health officials are dealing with the outbreak and more.
We don’t know exactly how fast the disease is spreading — or where, Brianna Ehley noted. The government doesn’t really know how many people have been tested — a process that was delayed due to diagnostic issues with the original CDC-developed test and the federal government’s decision to forgo using the test distributed by the WHO.
The CDC has promised more information on how many people have been tested by commercial labs — organizations like LabCorp and the Mayo Clinic, which are critical because public health labs have limited capacity to test. But until then, we have little idea of such basic questions as how many U.S. cases there actually are; so far, more than 1,500 have been confirmed.
The lack of clarity and federal direction has left state and local officials steering the early response, making key decisions about cordoning off areas or suspending public events and emphasizing mitigating the virus' effects over trying to contain it. Meanwhile, the White House's recent moves — most notably Wednesday night’s ban on travel from Europe — is still focused on containment, according to Brianna.
While the CDC has broadened testing criteria and made tests available to anyone with a doctor’s order, some doctors offices are operating under outdated criteria — not testing individuals unless they have traveled to China or come into direct contact with an individual confirmed to have contracted the disease.
The federal government’s messaging, too, has lacked cohesion. While the government’s top scientists — NIH immunologist Anthony Fauci and the National Center for Immunization and Respiratory Diseases’ Nancy Messonnier among them — have emphasized the coronavirus is unlikely to dissipate in the near-term and could get much worse, the president has at times contradicted his own health officials.
President Donald Trump’s messaging on the crash in oil prices has also been at times counterproductive, Ben reports. U.S. oil prices have plummeted as the pandemic has cratered energy demand and triggered a price war between Saudi Arabia and Russia. Trump has suggested the decline in oil prices could become a de facto stimulus package, but it seems unlikely folks will drive more and spur the economy amid a pandemic, no matter how low gas prices are.
The stock market plunged another 10 percent on Thursday, continuing a weekslong slide amid concerns about the coronavirus interrupting global supply chains and travel. While big bank CEOs, in town earlier this week to meet with Trump, insist they’re better capitalized than they were before the 2008 financial crisis and that they don’t need a bailout, they could be in big trouble because of low interest rates and the effects of the virus spreading out to the people and businesses they lend to, Zachary warned.
The March 23 meeting of the Financial Stability Oversight Council is something to watch, Zachary said, to get a sense of how the Federal Reserve, the SEC and the FDIC are viewing the state of the financial system. Expect a lot to change between now and then.
House Democrats on Wednesday released a multibillion-dollar stimulus package aimed at alleviating the economic consequences of the coronavirus outbreak. Democrats’ focus is on social safety net policies, including paid sick leave, enhanced unemployment insurance for furloughed workers, additional measures to ensure low-income students have access to school lunches and free coronavirus testing for all, including the uninsured. Republicans prefer tax relief and assistance to small- and medium-sized businesses. And no one wants Trump’s payroll tax cut.
Despite the fact that Treasury Secretary Steven Mnuchin had been working with House Speaker Nancy Pelosi to develop the package, there appeared to be little Republican buy-in for the Democratic bill; House Minority Leader Kevin McCarthy panned the Democrats’ measure, H.R. 6201 (116), Brianna Gurciullo noted. The partisan squabbling over the bill could be adding fuel to the fire for the already-volatile financial markets, Zachary added.
Meanwhile, there appears to be little to no appetite on the Hill for corporate bailouts for banks, airlines, oil and gas companies and other big industries affected by the coronavirus. Mnuchin, testifying on the Hill this week, emphasized there would be no bailouts, Brianna said, and thus far, airlines, banks and major oil and gas companies have all insisted they don’t need a bailout.
Smaller, independent energy producers, on the other hand, have been pushing for a bailout — including folks like oil tycoon Harold Hamm who have the president’s ear, Ben notes. Whether impending layoffs in the energy sector or a further decrease in travel demand will prompt stronger calls for corporate bailouts is an open question.