Congress Hits a Speed Bump on the Way to Spending Nearly $2 Trillion

As US cases of the coronavirus now double every two and a half days, more than 84 million Americans are spending a bleak Sunday night facing a week – and maybe months – ahead, either off the job or teleworking, separated from relatives and friends, seeing paralysing discord on Capitol Hill where the virus is spreading.

The “stay-at-home” orders are in effect or are about to be in California, Washington State, New York, Pennsylvania, New Jersey, along with Ohio, Delaware and Louisiana added Sunday. Los Angeles and Philadelphia imposed newly specific city orders. Although the orders were called temporary or for a few weeks, there was no real assurance they wouldn’t last eight weeks or more.

As overseas markets awakened, US stock futures were signalling another bout of precipitous losses for Monday, down for a while at the 5% limit allowed before trading is halted. When trading resumed, losses in early hours bounced around the minus 4% mark before creeping back toward 5%

As sombre background music, the Oil-Patch nightmare-level oil prices were back down another 2% to 4% with the US West Texas Intermediate benchmark at $22.14. In the Treasuries market, the early-hours 10-year yield was at 0.815%, having dropped 41 basis points.

President Trump, in the evening’s Coronavirus Task Force briefing, for the first time attached numbers to shipments of sorely needed medical equipment and field hospitals. The quantifications were immediately welcomed by medical professionals on cable news channels, who nevertheless in several cases said the totals are still insufficient and overdue. Although 40,000 people a day are being tested for the virus, some hospital professionals said that number should be three or four times that large at this stage.

Trump had some praise for Democrat governors in New York and California and even for New York City Mayor Bill de Blasio, who was again sharply critical of Trump and his administration’s virus response earlier in the day. Trump said the federal government has taken over all the expense of National Guard mobilisations in California, New York and Washington State. He also made clear that he is so far not using the Defense Production Act authorities to mandate production of scarce supplies. He and his trade advisor Peter Navarro said just the “threat” of using it that was embodied in its invocation Wednesday has been enough to prompt widespread offers of repurposed and new manufacturing facilities toward the cause.

Asked why he is not using the DPA that he invoked, Trump at first answered, “We are using it now.” He then added, “The concept of nationalising our business is not a good concept…We may have to use it someplace along the chain but we’re getting calls” in which firms volunteer to repurpose or operate unused facilities to make the needed supplies.

The positive impact of the president’s momentary suspension of partisanship and his concrete numbers showing masks, gowns, face shields and respirators on the move soon became blurred by presidential digressions. As the briefing went on for an hour and a half Trump gave extended accounts of how much he says he has sacrificed by becoming president, a decision he said he still does not regret.

Both Trump and earlier, Cuomo, endorsed a clinical trial beginning Tuesday in New York of the administration of combinations of chloroquine, the less toxic hydroxychloroquine and the antibiotic azithromycin. “I don’t want to get anybody overly excited but I’m very excited” by the chance of success, Trump said.

At one point there was a jarring note as Trump was informed by a reporter that five senators are now in isolation, four of them because their colleague Rand Paul, the Republican from Kentucky, has tested positive. “Romney’s in isolation? Gee, that’s too bad,” a remark about Mitt Romney reminiscent of Trump’s repeated criticism of another Republican Senate adversary, John McCain – even after his death from cancer. Trump answered a reporter’s question saying “no,” he was not being sarcastic about Romney.

CNN was first to report that Paul, the only senator who voted against the first congressional virus response legislation, was not only in the still-open Senate gym and swimming pool Sunday morning, but has been mingling with other senators for several days while he awaited results of his test. Rand apparently caught the virus from city officials at a Louisville event last week.

Each Republican senator placed in isolation is one less vote in favour of the GOP virus package. Even so, that was not a factor when the first necessary procedural vote on the package faced solid Democratic opposition Sunday evening, failing 47-47 when 60 votes were needed to pass. Talks among top congressional leaders – not necessarily in the same room – went on Sunday night with some lawmakers saying they were willing to stay up into the early morning hours if necessary. The first-round balk was not unexpected given what’s at stake, close to perhaps $2 trillion in spending. The GOP plan also included up to $4 trillion in loan guarantees for business big and small.

Democrats, drafting their own alternative, have objected to the ratio of money spent on big business to that being spent on direct aid to workers, now a single payment of up to $3,000. The payroll supplement payments to small businesses is part of an untested concept that would provide up to four months of subsidy that would not have to be repaid if employees kept getting pay cheques for that long. The prospect of a free payroll subsidy so far seems to have had little effect as layoffs are forecast to reach 2.5 million in a week.

Treasury Secretary Steven Mnuchin, in a morning Fox News interview, did not quarrel with an estimate that the size of the Phase 3 congressional package has grown to $1.8 trillion. According to Senate Democratic leader Chuck Schumer, he and Mnuchin are negotiating into the night.

Italy’s death toll went up by 651 in the latest 24 hours, not as much as the previous day’s 793, sparking some small hope that mortality has peaked. Eighteen doctors have died there. German Chancellor Angela Merkel, also in isolation after a routine visit to a doctor who tested positive, has limited the size of gatherings in her country to only two people. Spain’s toll continued to worsen.

Both Spain and Italy are gratefully importing donated medical supplies and personnel from China. Trump, who repeated his “Chinese virus” label, was asked if he would consider importing medical supplies and said that would probably not be necessary.

Trump also said he’s “a little upset with China” for not accepting US medical observers early on and for not notifying the US and other countries of the severity of the outbreak. He acknowledged China is buying significant amounts of farm product from the US as agreed to, despite the virus disruptions.

Vice President Mike Pence, in the briefing, said a new streamlined virus test has been approved and will start to be distributed in coming days, capable of returning results in 45 minutes.

Gov. Cuomo, whose daily “fireside chats” prompted a trending hashtag “Cuomo for President,” Sunday repeated up to 80% of New Yorkers can expect to eventually catch the virus and the only point of his “stay-at-home” edict is to slow down the spread so hospitals are not overrun and medical equipment then rationed.

He asked New York City officials to come up with a plan by Monday on how to cut down the number of young people who continue to cluster in parks, ignoring the warning of how they can spread the disease to grandparents and other vulnerables or become seriously ill themselves. Elsewhere, though, there were even fewer signs of social distancing, such as at Georgia beaches, packed Sunday afternoon.

Hawaii’s imposition of a two-week quarantine for all entrants that begins Thursday is backed up by the threat of $5,000 fines and a year in jail. Hawaiian Airlines will stop most long-haul flights to the islands, also on Thursday.

denny@macenews.com

www.macenews.com

 

Colin Lambert

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