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Washington Report: May 15, 2020 … “Well, The House Is Back”

15 May 2020

Washington Report: May 15, 2020 … “Well, The House Is Back”

Well, The House Is Back … HEROES Act … Measuring The Ocean … Sen. Burr Investigation Just Got Serious … WTFlynn Is Going On? … WisChaos … Yes, Social Distancing Works … and other news of the week. 
Best,
JR

Joyce Rubenstein
Capstone National Partners
P.S. Check out John Roger’s article in Thrive Global on “How We Can Help Coronavirus Lead to a New Renaissance”  Click Here
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Well, The House Is Back

The Politico “… and the vast majority of lawmakers showed up for the votes today, which will stretch into the evening. Speaker Nancy Pelosi needs somewhere in the neighborhood of 204 votes to pass the HEROES ACT if the numbers stay steady, which we expect they will. Fourteen House Dems voted against a procedural motion, which is, at times, a good proxy for the no votes on the final bill.(Voting against leadership on a procedural motion is quite the statement).Pelosi has a 17-vote margin here. It’s going to be relatively close. The $3 trillion spending package is getting squeezed by both sides, but our sources still believe it will pass.
* The $3 trillion,1895 page bill includes $1,200 direct payments to Americans, extended unemployment benefits, prioritizes granting hazard pay to front-line workers and providing aid to state and local governments, which had not been allotted in previous bills. Republicans say they will counter with a bill to shield businesses from virus-related lawsuits.”
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Measuring The Ocean

The number of people receiving unemployment benefits is at its highest level — 22.8 million — in American history.

Axios “The big picture: 36 million Americans have filed jobless claims in the past two months, including 3 million last week.”

  • The better news: For those who’ve managed to get applications approved, the extra $600 a week should help avert household financial catastrophe. The Treasury Department paid out $48 billion in unemployment in April, “greater than three times the amount paid at the monthly peak of the 2007-09 recession, according to a Brookings Institution analysis.” [WSJ]  “The April unemployment payments helped offset more than half of the wages and salaries that were lost during the month.”
  • The bad news: The extra cash won’t last forever, and timelines for economic recovery are becoming less optimistic. RESTAURANTS “One in every four U.S. restaurants will go out of business due to the coronavirus quarantines that have battered the food-service industry, according to a forecast by OpenTable.” [Bloomberg]
  • Perspective: The pre-pandemic record number of claims filed in a single week was 695,000 in 1982. More Americans are eligible for unemployment, including gig workers, and unemployment offices are racing through an avalanche of unemployment filings.

The bottom line: Measuring the backlog is “like trying to measure the ocean, it’s constantly moving,” said New York Labor Department commissioner Roberta Reardon.”

Stat du Jour

“Roughly 100,000 stores are expected to close over the next five years — more than triple the number that shut during the previous recession — as e-commerce jumps to a quarter of U.S. retail sales from 15% last year, UBS estimates.” —The Wall Street Journal

@27 Million Off Health Insurance

Axios “Roughly 27 million people likely have lost job-based health coverage since the virus shocked the economy, from new estimates from the Kaiser Family Foundation. The virus is blowing up health insurance at a time when people need it most. Most of these people will be able sign up for other sources of coverage, but millions are doomed to be uninsured in the midst of a pandemic.  Speaker Pelosi’s latest coronavirus relief bill would fully subsidize the cost of maintaining an employer plan through COBRA — an option that would otherwise be prohibitively expensive for many people. … But that’s a long way from becoming law.”
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Take-Aways From Covid-19 Senate Hearing

BGov “Key takeaways from Senate Health, Education, Labor and Pensions Committee hearing on Covid-19:
  • Fauci said that reopening too soon could lead to dire consequences. “If we don’t respond in an adequate way… then we run the risk of having a resurgence,” he said. Democratic senators pressed officials for CDC guidance on reopening.
  • Officials said that things are trending in the “right direction” but that does not mean that everything is “fully under control.” CDC Director Robert Redfield said that contact-tracing capacity needs to built out by September.
  • HHS official Admiral Brett Giroir says states and territories aim to do 12.9 million tests over the next four weeks. That’s an ambitious goal, and represents more than the about 9.4 million tests the U.S. has done to date.
  • Officials said there are on ongoing trials for several vaccines and promising treatments are being developed, though Fauci said that even at “top speed,” a vaccine is unlikely by the fall. Fauci called Gilead’s Covid-19 treatment remdesivir a “modest success” and says they hope to build on it “with combinations of drugs and better drugs.”
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Take-Aways From Rick Bright’s House Testimony

TheFix “Bright is a Trump administration vaccine expert who says he was removed from a key role for raising concerns about the federal government’s coronavirus response — and its promotion of unproven drugs to treat the virus — testified Thursday before Congress. Rick Bright became a whistleblower after being removed from his post as director of the Biomedical Advanced Research and Development Authority (BARDA), which falls under the Department of Health and Human Services.
Thursday, we saw Rick Bright rip apart the Trump Administration’s response to the coronavirus, which has now killed more than 84,000 Americans. Bright seized the opportunity. He said the government could’ve done better in its response to the deadly virus. He said they’ve known for a long time that the federal stockpile is “insufficient” and did not have enough masks. He said the government has no “plan on how to fairly and equitably distribute” remdesivir, the most promising drug in combating Covid-19.”
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Investigation Of Sen. Burr Just Got Serious

WaPo “Sen. Richard Burr is stepping down as chairman of the Intelligence Committee, following the seizure of his cellphone by FBI agents investigating stock trades made before the coronavirus crashed financial markets. NEXT IN LINE? Because the intelligence committee is a select committee, its Republican membership and leadership is largely up to McConnell. Aides to the majority leader declined to comment. Burr is expected to remain on the committee even though he will not be chairman.
*Background: The Justice Department has been investigating stock trades Burr made since March. The inquiry followed a review of public disclosures … that showed Burr and his wife sold 33 stocks worth between $628,033 and $1.72 million — including many in sectors hard-hit by the pandemic, such as the hotel, restaurant and shipping industries. Burr reportedly received daily coronavirus briefings in the weeks leading up to the February sell-off.”
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WTFlynn Is Going On? …
The Flynn Case Isn’t Over Until The Judge Says It’s Over

WaPo DEEP DIVE “[Former National Security Advisor] Michael Flynn pleaded guilty to lying to the FBI about his contacts with the Russian ambassador in December 2016 on behalf of the incoming Trump administration. He has actually pleaded guilty twice, before two different judges, admitting under oath that he knowingly lied to the FBI. Members of the Trump administration, including the president himself, agreed that Flynn lied, which is why Trump fired Flynn after only a few weeks as national security adviser.  OOPS, NEVER MIND But Flynn later moved to withdraw his plea and have his case dismissed, based on alleged government misconduct. And, last week, in a remarkable motion, the Justice Department agreed with him. It argued that Flynn didn’t really lie, and that his conviction is flawed because the FBI had no legitimate reason to interview him in the first place. So after pursuing and defending Flynn’s prosecution for more than two years, the Justice Department is essentially saying, “Oops, never mind,” and asking U.S. DIstrict Judge Emmet G. Sullivan to dismiss the case.
What makes makes the Flynn case different, and so unusual, is that Flynn has already pleaded guilty. … The prosecution is largely over, the defendant stands convicted, and all that remains is sentencing — which is the prerogative of the judge. At that point, the court has a greater role to play in determining how the case proceeds. The cases largely relied upon by Flynn and his supporters … are cases involving prosecutorial decisions where there has been no guilty plea. That’s a crucial distinction. No one is pointing to cases in which the government has moved to completely drop a prosecution after a guilty plea because, frankly, no one can think of another example.
At the very least, because the government’s request is so unusual, it raises complex issues concerning how the court should proceed and what legal standards apply. With the Justice Department now in bed with Flynn, neither is going to present the other side of those issues to help Sullivan determine what to do next, and that makes it appropriate for a judge to invite outside experts to provide advice. (Judge Sullivan appointed former federal judge John Gleeson to present the legal arguments opposing the motion and to advise him on whether Flynn should be held in contempt of court.)
The court has institutional interests at stake here, as well. Judges have an interest in ensuring that parties, including the U.S. government, are not abusing the judicial process. Here, the government has abruptly switched sides and now disavows factual and legal arguments it made for two years. … The judge is not required simply to serve as a rubber stamp and thereby become a possible accessory to prosecutorial misconduct.
It is likewise reasonable for Sullivan to explore holding Flynn in contempt. If Flynn now claims he didn’t lie to the FBI, it would mean he lied under oath to Sullivan during his plea. The judge can have no confidence that this Justice Department would pursue a perjury investigation, but he does have the inherent power to punish anyone who lies to him through contempt of court.
The fact that Sullivan is seeking a full airing of these issues does not indicate what he will ultimately do. He may well end up granting the government’s motion. Besides, if Flynn and his allies are correct that his prosecution was a miscarriage of justice, they should welcome a judge’s scrutiny. Perhaps it will showcase the FBI’s alleged misconduct and how Flynn was “set up” by a deep-state conspiracy. But the strident opposition by Flynn and his supporters to the court gathering more information suggests that they have something to hide. Let’s hope Judge Sullivan gets to the bottom of it.”
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The Pandemic Broke America

Axios “Eight weeks into this nation’s greatest crisis since World War II, we seem no closer to a national strategy to reopen the nation, rebuild the economy and defeat the coronavirus.

Why it matters: America’s ongoing cultural wars over everything have weakened our ability to respond to this pandemic. We may be our worst enemy.
  • The response is being hobbled by the same trends that have impacted so much of our lives: growing income inequality, the rise of misinformation, lack of trust in institutions, the rural/urban divide and hyper-partisanship.
  • We’re not even seeing the same threat from the virus. Democrats are far more likely than Republicans to be worried about getting seriously ill, while Republicans — including the president — are more likely to think the death counts are too high.

    The other side: There’s better news at the state level. “Governors collectively have been winning widespread praise from the public for their handling of the coronavirus outbreak,” the Washington Post reports.  Individual states are making progress, according to the most recent Axios analysis of coronavirus cases — though it’s early and a second wave of infections is still possible.
Between the lines: Nationwide, 71% of Americans approve of the job their governor is doing, according to the Post. For Trump, the figure is 43%. The bottom line: An existential threat — like war or natural disaster — usually brings people together to set a course of action in response. Somehow, we’ve let this one drive us apart.
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WisChaos

Axios “A rolling, living experiment — and preview of coming attractions for the rest of the country — has begun in Wisconsin.  WaPo “The Wisconsin Supreme Court [this week] struck down Gov. Tony Evers’s stay-at-home order extension, which threw the state into chaos. “We’re the Wild West,” said Evers, a Democrat. Immediately after the court’s conservative majority issued the 4-to-3 ruling, the Tavern League of Wisconsin instructed its members to feel free to “OPEN IMMEDIATELY!” And open they did. Mask-less barhoppers crowded into pubs to cheer the reopening, while others worried from home that the decision would spread the virus even further. Restaurants, hair salons, barbershops, spas and gyms opened around the state … but the party was short-lived in the state’s biggest areas — including Milwaukee, Madison, Green Bay and more — which pledged to continue the state’s “safer at home” rules.
The big picture: Lawsuits challenging lockdown measures, in whole or in part, are pending across the country. But they’re mostly failing. Wisconsin’s high court is the only one to strike down an entire stay-at-home order. Courts in Kansas, Michigan, Pennsylvania have sided with those states’ governors, allowing their stay-at-home orders to stand.  Even lawsuits targeted at narrow, specific parts of states’ orders mostly failed, with some exceptions.
Overwhelmingly, the trend is for courts to uphold governors’ orders, even highly restrictive ones like Michigan’s and California’s. Not In Wisconsin. What’s next: The Wisconsin governor announced that his administration is working toward a new administrative rule for managing the crisis, a process he had warned could take weeks and might lead nowhere, AP reports. A notice made clear the new rule will mirror Evers’ earlier recommendations.”
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Positive Signs – For Now

NYT “… The news about the coronavirus really has gotten better over the past week. There have been fewer than 200 deaths in New York for two consecutive days, down from more than 1,000 in early April. Nationwide, the number of confirmed new cases each day has finally begun to decline substantially.
… So why, then, do Fauci and many other public-health experts sound so worried? Because the United States may be on the cusp of ending the very policies that have caused the recent progress.
There have been only two proven approaches to stopping the virus’s spread so far. One is extreme social distancing, like the lockdown that has been in effect across much of the U.S. since March. The other is an intricate program of testing, tracking and quarantining, as parts of Asia have done.

Right now, large parts of the U.S. are moving toward ending their lockdowns before it’s wise to do so, according to many epidemiologists. Perhaps the biggest problem: Despite the recent increase in tests, the country is still doing far fewer than are likely needed to avoid new outbreaks. Fauci, in his remote testimony to the Senate this week, said: “There is a real risk that you will trigger an outbreak that you may not be able to control” if the economy opens too quickly, “leading to some suffering and death that could be avoided.”
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Yes, Social Distancing Worked.

Coronavirus hospitalizations have declined in many states — another indication that social distancing has been effective. Why it matters: Hospitalizations are an important metric to watch to gauge the severity of the outbreak, especially because testing shortfalls have skewed some other measurements.
10 Weeks Of Trial And Error: 
WaPo “For the first time since a wave of patients flooded their emergency rooms in March, Dr. Jose Pascual, a critical care doc at the University of Pennsylvania Health System, and others on the front lines are expressing a feeling they say they haven’t felt in a long time — glimmers of hope. They say they have devised a toolbox, albeit a limited and imperfect one, of drugs and therapies many believe give today’s patients a better shot at survival than those who came only a few weeks before. To be clear, these are not therapies proved to kill or stop the virus. They range from protocols to diagnose and treat dangerous, but sometimes invisible, breathing problems that can be an early warning of covid-19 in some people, to efforts to reduce the illness’s severity or length. At this stage, they are still experimental approaches by doctors desperate to find ways to help gravely ill people and throwing everything they can think of at the problem. 

The World Health Organization also sounded a note of optimism on Tuesday, saying it sees “potentially positive data” in four or five coronavirus treatments and planned additional studies to be able to make recommendations. “We do have some treatments that seem to be in very early studies limiting the severity or the length of the illness,” spokeswoman Margaret Harris said.”
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8 Minutes

WaPo “The simple act of speaking can emit small droplets that linger in the air for at least eight minutes and potentially much longer, according to a new study. This could help explain why covid-19 cases cluster in places with poor air circulation, such as nursing homes, households and cruise ships. It also shows why face coverings are so important to prevent the spread. Read about the study and what scientists are saying about its implications for covid-19.  This new study did not involve the coronavirus or any other virus, but instead looked at how people generate respiratory droplets when they speak.”
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Farewell To The Greatest Era Of Globalization

Axios “The pandemic will politicize travel and migration, and entrench a bias towards self-reliance, The Economist writes: “This inward-looking lurch will enfeeble the recovery, leave the economy vulnerable and spread geopolitical instability.”
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Supremes

NYT “The Supreme Court heard arguments Tuesday about President Trump’s efforts to shield his tax returns from Congress and prosecutors. Some of the justices’ questions raised the possibility that they might avoid taking a stand on the weighty constitutional issues and return the cases to lower courts. “That would have the incidental effect of deferring a final decision beyond the 2020 presidential election.” In that case, the public would be unlikely to see the president’s financial records before November.”
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Retail Plunge

‘Retail sales plunge a record 16.4% in April, far worse than predicted,’ CNBC “Economists surveyed by Dow Jones expected the advanced retail sales number to fall 12.3% after March’s reported 8.3% dive already had set a record for data going back to 1992.

“Clothing stores took the biggest hit with a 78.8% tumble. Other big losers were electronics and appliances (-60.6%), furniture and home furnishing (-58.7%) sporting goods (-38%), and bars and restaurants (-29.5%). Nonstore retailers rose 8.4%. … The retail industry, particularly brick and mortar stores, already had been in a state of peril, and the coronavirus measures have only added to the misery.”
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Campaign 2020

GOP Wins in Special Elections:

California: NYT “Mike Garcia, a former military pilot and newcomer to Republican electoral politics, has defeated Christy Smith his Democratic opponent in a special election to fill a House seat in Southern California. The victory is the first time the G.O.P. has flipped a Democratic held seat in California since 1998 and is a significant win in an election that was primarily conducted by mail and reflected the country’s bitter partisan mood. The two candidates will meet again in November, when both are planning to run for a full term. The win clinched a two-for-two showing by the G.O.P. in Tuesday’s special House elections.
Wisconsin: In rural northern Wisconsin, Tom Tiffany, a Republican state senator, handily beat Tricia Zunker, a Democratic school board member, in the state’s 7th Congressional District race.”

Ad Wars 2020:

Politico “A new, joint report from the ad tracking firm Advertising Analytics and analytics company Cross Screen Media projects that the total ad spending on the 2020 election cycle will reach $6.7 billion, up 12 percent over their initial $6 billion projection for the cycle. … The bump is due partially to a record level of primary spending, but the coronavirus is also expected to help boost that total … Traditional media is still expected to rule the day, even as campaigns increasingly turn their attention online. … But digital advertising is also experiencing significant growth.”

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