Coronavirus March 19 - 20

Coronavirus: the legislation, the economy, and the healthcare system

"We are only as safe as the least insured person in America." - Sen. Bernie Sanders

POSTED MARCH 19, 2020/UPDATED MARCH 20 

It took some time to convince Trump, Republicans and conservative media that the coronavirus was not a liberal plot to take down President Trump (Politic 2020, The Coronavirus conspiracy theories), but we apparently have crossed that bridge.  Two pieces of bipartisan legislation have now been passed and a third is in the offing.  The markets are plunging and unemployment is rising.  A vaccine is a year or more away, and there are numerous other factors that need to be addressed: the inadequate number of test kits, the lack of hospital beds, shortages of ventilators for patients and of protective equipment for health workers, universal paid sick leave, and health care availability.

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UPDATED MARCH 20: A stunning 45% of the nation approves of Trump's botched handling of the coronavirus crisis.   Vox (sidebar) explains how the Trump Administration response has been years in the making - beginning with the dismantling of the office charged with responding to pandemics in 2018.

THE LEGISLATION

• On March 6, Trump signed a bipartisan $8 billion deal to provide emergency funding to combat the coronavirus outbreak. The bill includes: $3 billion for developing treatments, including $300 million for the government to purchase drugs from manufacturers at “fair and reasonable” prices, $2.2 billion for public health measures to help prevent its spread, and more than $1 billion to be sent overseas. (Axios, Mar 6)

• Yesterday, the Senate approved legislation passed by the House in the wee hours of Saturday morning .  The legislation, dubbed the Families First Coronavirus Response Act, passed on a 90-8 vote in the Senate, and President Donald Trump signed it into law Wednesday evening.  The measure provides free coronavirus testing and ensures paid emergency leave for those who are infected or caring for a family member with the illness. The bill also provides additional Medicaid funding, food assistance and unemployment benefits. (NBC News, Mar 18)

• The House, the Senate and the Treasury Department are preparing proposals for a third coronavirus bill aimed at stopping the free fall of the American economy.  Politico reports:

  • According to the Treasury Department’s proposal, a copy of which was obtained by POLITICO, the so-called “phase three” proposal would include $50 billion to aid the hard-hit airline industry, $150 billion for other distressed sectors of the economy, two rounds of direct payments of $250 billion each on April 6 and May 18, and the creation of a small business interruption loan program....[The Treasury Department proposal will be taken up by the Senate and Senate Majority Leader] McConnell created three so-called “task forces” to come up with specific proposals to assist small businesses as they deal with the plummeting demand that comes with the lockdown orders in several cities across the country. 

  • House Democrats are also drafting a third stimulus bill to act as a counter-offer to the "phase three" package senators are currently drafting. Democratic lawmakers and aides say the House plan could include expanded Medicaid coverage, additional unemployment insurance payments, relief for homeowners and renters, support for small businesses, an airline rescue package and additional food security measures.

THE ECONOMY

Yesterday, the New York Stock Exchange temporarily suspended trading for the fourth time in two weeks as the markets plunged at the opening.  The Dow has now erased nearly all its gains since President Trump took office, and the three major U.S. indexes have burrowed even deeper into bear market territory.

Today, the Labor Department reported that 281,000 people applied for jobless benefits last week, up 33 percent from the prior week. And the worst is yet to come.  The Washington Post reports:

American workers are getting laid off at an unprecedented pace as the coronavirus outbreak shuts down much of the economy, and the government safety net to help the newly jobless appears ill-equipped to handle the surge in the unemployed.  More than a million workers are expected to lose their jobs by the end of March, economists say, a dramatic turnaround from February when the unemployment rate was near a record low. Ball State University economist Michael Hicks predicts this month could be the worst for layoffs in U.S. history.

The Treasury Department/Senate effort may or may not slow the stock market crash, but it does not adequately address the financial problems faced by the unemployed.  Proposals being made in the House more directly help the latter, but the problems are exacerbated by our "service economy"  -  more than 70% of the non-farm payroll employees work in private service-providing industries.  These are the first of the workers who are being laid off or having their hours reduced and those most likely not protected by good worker benefits.   The compromise struck between House Democrats and the Treasury Department to get passage in the Senate of the Families First Coronavirus Response Act covers only 20% of US workers -with companies having less than 50 employees or more than 500 not required to provide paid sick leave. (see sidebar)

Worker benefits in the U.S. lag behind European nations, and, perhaps most notably in these times, in the areas of unemployment insurance and paid sick leave.  For comparison, a 2016 report notes that Denmark, e.g., provides unemployment benefits of "90 percent of previous earnings for up to 104 weeks. As a benchmark, the U.S.offers between 40 percent and 50 percent of earnings for up to 26 weeks, depending on the individual state.  Paid sick leave is most generous in the Netherlands, where workers can be absent for up to 104 weeks and receive 70 percent of their salary for the whole period." 

THE HEALTHCARE SYSTEM

Of course, the primary immediate concern is how to stop the pandemic.  A vaccine is a year or more away, and there are numerous other factors that need to be addressed: the inadequate number of test kits, the lack of hospital beds, shortages of ventilators for patients and of protective equipment for health workers, universal paid sick leave, and health care availability.  Steps are being taken in all these areas - belatedly in some instances and inadequately in others.  

• Test kits - rather than approach the World Health Organization for kits immediately, the US chose to provide its own kits and have all tests coordinated by the CDC in Atlanta.  Even those tests turned out to be faulty.  US companies are ramping up production (link sidebar) and Turkey has sent 500,000 test kits to the US.  The New Yorker (link sidebar) reports on the early confusion and its impact:

The three-week delay caused by the C.D.C.’s failure to get working test kits into the hands of the public-health labs came at a crucial time. In the early stages of an outbreak, contact tracing, isolation, and individual quarantines are regularly deployed to contain the spread of a disease. But these tools are useless if suspected cases of a disease cannot be tested. The void created by the C.D.C.’s faulty tests made it impossible for public-health authorities to get an accurate picture of how far and how fast the disease was spreading. 

• Hospital beds - Every corner of the U.S. is at risk for a severe shortage of hospital beds as the coronavirus outbreak worsens, according to new simulations from Harvard, mapped out by ProPublica and the New York Times.   To help with the shortage, the Navy will be deploying two hospital ships in the coming weeks and the Pentagon will be providing an additional 2000 hospital beds. The Navy hospital ships will be used to provide care for non-coronavirus patients to free up beds in the hospitals.  

• Ventilator shortage - Governments and companies around the world are racing to produce more ventilators.  U.S. hospitals have something like 62,000 up-to-date machines immediately available, plus another 99,000 obsolete units that could be pulled out of storage in an emergency, says the Society of Critical Care Medicine. If the pandemic in the U.S. veers off in the Italian direction, that entire collection may be inadequate. Manufacturers could ramp up production but that will take 3 to 4 months. (see sidebar)

• Respiratory mask shortage - "With the pandemic sweeping the globe, demand has skyrocketed and global supply chain issues have resulted in plummeting availability.  The upshot, according to health care workers around the country, has been a frightening shortage, further exacerbated by hoarding — and even stealing."  Doctors and nurses are reaching out to their communities asking hoarders to consider donating them to a hospital.  (BuzzFeed News)  See sidebar for avoiding "COVID-19 panic."

• Universal paid sick leave - the sick leave measures covered in the "Families First" legislation covers about 20% of the work force.  The exceptions allowed  for companies with less than 50 employees or more than 500 employees must be removed.  

• Health care availability - Steps are being taken in the proposed legislation to ensure that no one goes untreated in the current crisis, but we may be coming up against inherent structural limits on what can be done.  Sen. Bernie Sanders opinion piece in the Erie News says it best: