POLITICO Pro reporters held the second in a series of conference calls for subscribers to discuss the latest developments on the coronavirus outbreak and the federal and state governments’ responses.
Pro Financial Services’ Mark McQuillan and Victoria Guida, Pro Health Care’s David Lim, Pro Transportation’s Tanya Snyder and POLITICO New York’s Shannon Young discussed the state of the financial markets, testing rollout in New York, the strain on the medical supply chain and more in the hourlong call Thursday morning.
The U.S. has been struggling heavily to stand up the amount of testing that experts want to see to get a grasp on how widely the coronavirus has already spread across the country, David notes. Further compounding testing shortages are inadequate stocks of key components needed to test for the coronavirus, like cotton swabs, RNA extraction kits and personal protective gear such as face masks and gowns required both by front-line health care workers and technicians in labs developing and performing tests for the virus.
Every country wants the same health care products right now, putting a huge strain on the medical supply chain. The FDA is aiming to grant regulatory flexibility to labs and to state governments. President Donald Trump’s invoking of the Defense Production Act on Wednesday would allow him to direct U.S. companies to manufacture critical medical products, but the administration has yet to complete a comprehensive needs assessment.
Meanwhile, the FDA has also been trying to cut down on the materials needed to test each patient — for instance, by waiving requirements for some public health labs to send CDC tests for confirmation.
That depends on how long the pandemic lasts. A vaccine is at least a year to a year and a half away, top government scientists say. And, meanwhile, more and more extreme containment measures are coming; the State Department Thursday enacted an unprecedented Level 4 travel advisory, urging Americans not to travel overseas and for those currently abroad to return to the U.S. if they can and to shelter in place otherwise.
While financial markets are under a great deal of strain, banks seem to be weathering the storm thus far, Victoria notes. Coming out of the 2008 financial crisis, Congress put in place measures to ensure that banks are prepared for an unexpected shock, but it remains possible that a tinder box could get lit. The high amount of business debt could be one such box, according to Victoria, if a highly indebted company sees revenue collapse and creates a domino effect throughout the economy.
While the Federal Reserve has stepped in to attempt to calm the markets, there’s only so much it can do when the underlying uncertainty around the public health crisis remains. The financial markets, Victoria says, want to see something aggressive out of Washington — something that acknowledges the scale of the problem.
Things on the Hill are fluid right now, with both the House and Senate weighing remote voting — which would be an historic move for Congress — and other measures to minimize the spread of Covid-19 and to protect lawmakers and staff, especially in light of the first two members of Congress testing positive for the disease this week. States seem ahead of the curve here. In New York, where a third member of the Assembly tested positive for the disease on Thursday, legislators are experimenting with voting in shifts and voting from their offices, Shannon says.
Industries from airlines and public transit to hotels and restaurants are all lobbying Congress to receive relief aid as part of any measure. Airlines have asked for $60 billion, Tanya notes, though some Senate Democrats are loathe to pass a bailout for the industry without securing labor protections, long-term limits on executive pay and consumer protections on airline baggage and ancillary fees as part of a deal. Some Senate Republicans have even suggested moving on a highway bill that they had slated for the fall as part of a stimulus package.
Senate Republicans managed to introduce their trillion-dollar coronavirus stimulus package Thursday, the centerpiece of which is direct payments to qualified Americans of up to $1,200.
New York has suddenly found itself the epicenter of the coronavirus outbreak in the U.S., with more than 5,300 confirmed cases as of Thursday, according to data from Johns Hopkins University. The state is leading the nation in positive cases in large part because it has successfully ramped up testing, according to Shannon, having conducted over 22,000 tests as of Thursday. Gov. Andrew Cuomo’s aggressive posture with the federal government has contributed to Cuomo arguably being the most successful governor in getting what he wants out of the federal government, says Shannon, though David Lim adds that the state has a few intrinsic advantages.
Not the least of those advantages is the Albany-based Wadsworth lab, one of the most high-tech in the country, according to David. The FDA last week authorized New York State's Department of Health to process thousands of coronavirus tests per day by contracting with private labs, and has since allowed other states to take similar steps. But it’s an open question, David says, whether other states have both the technical know-how and the confidence in their labs to follow in New York’s footsteps and similarly ramp up testing.