What to Know in Washington: Ragtag Virus Tracer Army Takes Shape

U.S. health experts say a force of as many as 300,000 contact tracers is crucial for coast-to-coast reopening in the wake of the new coronavirus. So far, though, the country has a far smaller ragtag army that’s many weeks, if not months, from full deployment.

West Virginia wants tracers to go unpaid. Texas, advertising jobs at $17 to $22 an hour, calls the gig a “simple” matter of telling people to stay home. New York City is seeking 1,000 hires with public-health backgrounds.

North Carolina, which is targeting unemployed people with high-school educations, received about 1,500 applications for 250 positions in just 24 hours.

“That shows you that there are a lot of people out of work,” said Paul Mahoney, a spokesperson for the program’s coordinator, Community Care of North Carolina. Five weeks into the pandemic, a record 26 million Americans had filed for unemployment benefits, more than 875,000 in North Carolina.

That wave of desperation explains why Texas, Georgia and other states are stirring to life this week. Gov. Gary Herbert (R) said yesterday that Utah will reopen in a limited capacity Friday, including gyms, salons and dine-in restaurants so long as they “exercise extreme precautions,” and Wyoming will do likewise. California Gov. Gavin Newsom (D) is considering opening schools as early as July to make up for lost class time.

But experts say long-term stability won’t come without a way to quickly spot Covid-19 outbreaks and stop them. So the U.S. — with the world’s richest economy, but a flagging public-health system — is asking trainees to press total strangers: Where have you been, for how long, and who else was there? And their phone numbers, please?

In all, America could use 300,000 tracers and specialists, according to Tom Frieden, a former U.S. Centers for Disease Control and Prevention director and New York City health commissioner. By comparison, the New Deal’s Civilian Conservation Corps employed about 500,000 people at its peak.

“Early in the outbreak, many health departments began systematic contact tracing but rapidly became overwhelmed,” Frieden said in an email. “Now that cases are coming down in some areas, we have to trace contacts in a simple, more scalable way.” Read more from Elise Young, Keshia Clukey and Kurt Wagner.

FEMA, HHS Acknowledges Shortages to Panel: House Oversight and Reform Chairwoman Carolyn Maloney (D-N.Y.) said yesterday in a statement that officials from the Federal Emergency Management Agency and Department of Health and Human Services had told lawmakers in briefings that states face shortages of testing supplies as well as personal protective equipment, such as masks and medical gowns.

The acknowledgment comes after weeks of President Donald Trump stating governors have sufficient testing and equipment.

Trump said in a Twitter post last night that “the only reason the U.S. has reported one million cases of CoronaVirus is that our Testing is sooo much better than any other country in the World.”

A Test for States of the Unions: The coronavirus crisis is thrusting governments on both sides of the Atlantic into a fiscal emergency along with the medical one, as the European Union and the U.S. grapple with how to assist their hardest-hit members without being dragged down by them. In Europe, indebted Italy is in need, and in the U.S., it’s big states like New York and Illinois. The geography and political systems may differ, but the problem is the same.

Both economies boast central powers that want to avoid getting on the hook for the debts of the under performers. Republicans in Washington grumble about taking on Illinois’ problems, while Berlin fears Rome’s. Read more from Craig Stirling, Steven T. Dennis and Catherine Bosley.

THE PATH TO REOPENING

Trump Orders Meat Plants to Stay Open: Trump signed an executive order yesterday that compels slaughterhouses to remain open, setting up a showdown between the giant companies that produce America’s meat and the unions and activists who want to protect workers in a pandemic. Meat processing plants around the U.S. have shut down because of the coronavirus, but Trump said in the order that “such closures threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency.”

Using the Defense Production Act, Trump is ordering plants to stay open as part of the critical infrastructure needed to keep people fed amid growing supply disruptions from the coronavirus outbreak. The government will provide additional protective gear for employees as well as guidance. Read more from Jennifer Jacobs and Lydia Mulvany.

Mandatory Face Mask Rule Sought on Airplanes: A bipartisan group of House Transportation and Infrastructure Committee leaders are seeking tighter airline protections against the coronavirus and more liberal cancellation policies. A bipartisan letter, signed by four leaders on the committee, was sent to the industry trade group Airlines for America.

Every U.S. carrier should adopt policies requiring both passengers and flight attendants to wear masks or keep their face covered for the “entirety of their air travel,” the lawmakers said in the letter. Read more from Alan Levin.

• Meanwhile, a dramatic decline in air travel has Delta and JetBlue asking the Transportation Department to allow the carriers to suspend flights with low traffic, Ryan Beene reports.

What to Watch Today

Trump hosts a call with food and agriculture industry leaders at 10 am, and meets with Louisiana Gov. John Bel Edwards (D) at 11 a.m.

Trump participates in a roundtable at 4 p.m. with executives from the hospitality, food and automotive industries on re-opening America.

Happening on the Hill

Senate Panel Planning to Approve Stalled Fed Nominee: The Senate Banking, Housing and Urban Affairs Committee is preparing to approve the stalled nomination of Judy Shelton to be a member of the Federal Reserve Board next week, according to two Republicans familiar with the planning. A formal announcement of a committee vote hasn’t been made, and a committee spokeswoman declined to comment yesterday. Committee action would send the nomination to the floor for a confirmation vote by the GOP-controlled Senate.

Trump’s nomination of Shelton for the Fed had been held up by reservations among some senators over her views on monetary policy. In the past she has advocated returning the dollar to the gold standard and expressed skepticism about the relevance of the Fed’s congressional mandate to pursue maximum employment and stable prices. Read more from Erik Wasson and Josh Wingrove.

• The committee did announce a hearing for May 5 on the nomination of White House lawyer Brian Miller to be the Treasury’s special inspector general for pandemic recovery. The panel also will consider the nomination of Dana Wade to be assistant secretary of housing and urban development.

Democrats Blast Plans for D.C. Circuit Pick Hearing: Senate Judiciary Committee Democrats lashed out at a planned hearing next week for Trump’s latest nominee to what’s often regarded as the second-most powerful court in the nation. In a letter to Judiciary Chairman Lindsey Graham (R-S.C.) that was obtained by Bloomberg Law, the 10 Democrats asked that plans for the hearing they said was scheduled for May 6 be delayed until the panel can address issues related to the coronavirus pandemic. “Now is not the time to process routine judicial nominations,” the lawmakers wrote. Read more from Madison Alder.

Esper Taps Funds From Russia Programs for Wall: Defense Secretary Mark Esper is directing Pentagon budget planners to defer $545 million worth of construction projects—many in Europe meant to counter Russian aggression—to pay for Trump’s border wall with Mexico. In a memo sent yesterday to the Pentagon’s comptroller and other officials, Esper lists several projects in Norway, Germany, Spain and elsewhere totaling more than $200 million from which he says funds can be redirected. The projects are all part of the European Deterrence Initiative designed to bolster allies and undermine Russia’s growing influence on the continent.

Similar moves by Esper and his predecessors in the Trump administration have enraged members of Congress from both parties, who are particularly wary of seeing funding cut for construction projects in their districts or states. And Esper’s initiative would appear to conflict with the National Defense Strategy, which prioritizes “great power competition” with Russia and China.

House Armed Services Chairman Adam Smith (D-Wash.) slammed what he called the “Trump administration’s continued theft of DOD funding.” “Our partners and allies rely on the support of EDI funds to prevent Russian aggression in the region and these cuts will have real, lasting effects on our national security,” he said in a statement. Read more from Roxana Tiron.

Senators Ask FTC to Probe Meat-Industry Consolidation: Sens. Tammy Baldwin (D-Wis.) and Josh Hawley (R-Mo.) are asking the Federal Trade Commission to investigate consolidation in American meatpacking and processing for any anticompetitive behavior resulting from concentration. The senators said that four companies process 85% of all beef in the U.S. and three companies control 63% of pork processing. That has “undermined the stability of America’s meat supply and become an issue of national security,” according to a copy of the letter sent to the FTC today and seen by Bloomberg. Read more from Michael Hirtzer.

Economic Actions & Industry Pains

Small Business Loan Program Faces Bipartisan Scrutiny: The Small Business Administration’s rocky rollout of the Paycheck Protection Program is drawing the attention of lawmakers. Sen. Jack Reed (D-R.I.) is calling for a congressional investigation and audit into how the program, which was launched to give aid to small businesses crippled by the pandemic, is being administered by banks and overseen by Treasury and SBA. He said in a release the program has been “been plagued by problems, mismanagement, and lack of sound guidance” — and that “favored companies are winning while small businesses are being shut out.”

Sen. Hawley also tweeted that “big banks give their richest customers concierge service and they go to front of line” and that the relief legislation “does NOT authorize this special treatment by big banks for their wealthiest clients.” Senate Minority Leader Chuck Schumer (D-N.Y.) said on MSNBC that the Treasury Department and the SBA failed to give guidelines to the banks that would have pushed more of the financing toward smaller firms. And Sen. Martha McSally (R-Ariz.) called for more guidance on how applications should be processed to ensure independent contractors, self-employed individuals and other small firms get relief.

• A coalition of trade groups representing the interests of thousands of U.S. banks and credit unions urged the SBA to fix its application system for companies seeking rescue financing, or to explain the problems directly to entrepreneurs. “Quite simply, it is taking too long to submit loans and get these funds where they need to go,” groups like the American Bankers Association and Financial Services Forum wrote in the letter. Read more from Hannah Levitt.
• Wells Fargo submitted more than 100,000 applications to the SBA’s relief program Monday. The firm continues to prepare and submit packets “24 hours a day,” according to an internal memo from small-business head Steve Troutner reviewed by Bloomberg. The San Francisco-based bank said it is expecting an “uneven” pace of approvals from the SBA as a flood of applicants slows processing times for all lenders participating in the program. Read more from Hannah Levitt.

Trump’s Rural Base Fared Better in SBA Loans: The first round of coronavirus aid to small businesses was a boon to rural states that backed Trump but haven’t been hit as hard by the pandemic as Democratic strongholds on the coasts, contributing to rising political tensions over a multitrillion-dollar relief effort.

The skewed distribution doesn’t necessarily point to regional or political bias in the PPP’s administration or design, which is first-come, first-served. In many cases, smaller lenders who have close relationships with small-town business owners played a outsized role in issuing loans by moving quickly to tap the program. Yet the disparity adds to a litany of complaints about the SBA program. Read more from Mike Dorning, Steve Matthews and Catarina Saraiva.

Trump Ties Aid to ‘Sanctuary’ City Action: Trump indicated he wouldn’t allow federal aid for states facing budget deficits from the pandemic unless they take action against “sanctuary cities”—municipalities that prevent their police from cooperating with immigration authorities. “We would want certain things” as part of a deal with House Democrats to aid states, he said at the White House, “including sanctuary city adjustments, because we have so many people in sanctuary cities.” Read more from Jennifer Jacobs and Mario Parker.

U.S. to Reclaim Payments to the Dead: The Treasury Department is planning to instruct people whose deceased relatives received coronavirus stimulus payments to return the money to the federal government, according to a department spokesman. The Treasury is aware that some individuals who have recently died received the $1,200 economic impact payments and plans to issue guidance in the coming days, the spokesman said. Laura Davison has more.

Air Ambulances Win Access to Aid: The White House reversed its decision to deny air ambulance companies access to coronavirus aid over the weekend, a move the industry says is needed as it sees a drop in air medical transports. The Health Resources & Services Administration in the Department of Health and Human Services updated sometime between Friday and yesterday its website on Covid-19 claims reimbursement for testing and treatment to health-care providers and facilities serving the uninsured. Alex Ruoff and Jeannie Baumann have more.

Industry Groups Call for Insurance Extensions: Health industry and business groups are asking lawmakers to find ways to extend health insurance to people losing their coverage, pushing back on the Trump administration’s decision to use funds originally earmarked for hospitals and doctors to cover costs related to testing and treatment of Covid-19 for those without coverage.

The American Hospital Association, America’s Health Insurance Plans, the U.S. Chamber of Commerce and other groups urged lawmakers to give employers temporary subsidies for giving their employees health-care benefits as well as expand the Affordable Care Act’s insurance subsidies. On a call with reporters yesterday, AHA President and CEO Rick Pollack said the White House’s current system of reimbursing providers at Medicare rates for treating the uninsured is “way less than adequate,” Alex Ruoff and Sara Hansard report.

Politics & Elections

Biden Woos Left Flank Along With Wall Street: Joe Biden is trying to win over progressives by courting the movement’s leaders and backing their calls for significant increases in pandemic relief, yet faces an uphill fight to convince skeptics on the left he won’t abandon working people in favor of Wall Street.

Since the economic crisis began with the coronavirus pandemic, he has shifted some of his stances leftward, calling for trillions of dollars more in stimulus spending and complaining about big banks getting a federal bailout while some small businesses were unable to secure life-saving loans. He’s agreed to create several policy task forces that join his staff with Sen. Bernie Sanders’s (I-Vt.), and has adopted small pieces of Sen. Elizabeth Warren’s (D-Mass.) agenda, and says he’s willing to hear more.

To key progressive groups and leaders, the steps he’s taken are a good start. But they’re still worried that once in office, his economic recovery plan will mirror that of President Barack Obama, which they believed betrayed the values he campaigned on and favored banks and Wall Street at the expense of workers. Read more from Jennifer Epstein.

Biden Wins Ohio’s Mail-in Primary: Biden won Ohio’s Democratic presidential primary yesterday in a mail-in only contest that replaced regular voting due to the pandemic. The Associated Press declared the former vice president the winner with 74% of the vote with just a few precincts reporting. The primary had been scheduled for March 17, but was postponed due to concerns about safety and eventually conducted only by mail. The state has 153 delegates, roughly 4% of the pledged delegates to the Democratic National Convention. Read more from Magan Crane.

Amash Launches Presidential Bid: Rep. Justin Amash (I-Mich.) launched an exploratory committee on yesterday for a possible Libertarian presidential campaign. Amash, a conservative member of Congress and vocal opponent of Trump, left the Republican Party and became an independent in 2019. He launched a website yesterday and tweeted, “Let’s do this.” Read more from Magan Crane.

Mfume Wins Race for Former Rep. Cummings’ Seat: Former NAACP CEO Kweisi Mfume (D) won the special election against Kimberly Klacik (R) for Maryland’s 7th Congressional District, AP reports. Mfume, who previously held the seat from 1987 to 1996, beat out more than 20 other Democrats in the February primary for the overwhelmingly Democratic district formerly represented by the late Elijah Cummings.

Yang Sues N.Y. for Canceling Democratic Primary: Former Democratic presidential candidate Andrew Yang and a group of candidates seeking to represent him at the party’s national convention sued New York for canceling its presidential primary, saying the move tramples on the voting rights of millions of the state’s residents. New York said on Monday it wouldn’t hold the June 23 Democratic presidential primary because none of the races on the ballot are contested, having earlier postponed the election from April. Yang and the others asked a federal judge yesterday to block the state from canceling the election and to reinstate the vote. Read more Chris Dolmetsch.

What Else to Know Today

Romney Urges Action on Chinese ’Propaganda’: Sen. Mitt Romney (R-Utah) says he and other senators are urging the Trump administration to undertake a “very aggressive” effort to combat what he says is Chinese propaganda intended to portray the U.S. as incompetent in handling the coronavirus crisis. Romney said in an online discussion sponsored by the Georgetown Institute of Politics and Public Service that there is growing concern that China is trying to take advantage of the current crisis to expand its influence. Read more.

Democrats Call for Court Help With Trump Subpoenas: Judges peppered a lawyer for the Trump administration with tough questions yesterday in a case that will help determine how much power the president and his successors can wield. The questioning came as House Democrats urged a federal appeals court to rule that Congress can sue the executive branch over its defiance of a subpoena for the testimony of former White House counsel Donald McGahn. The case was triggered last year when Trump said his aides were “absolutely immune” from congressional subpoenas, hobbling the House’s efforts to get testimony during the Russia probe. The dispute could shape fights ranging from the quest for Trump’s tax returns to the conflict over his border wall with Mexico. Read more from Erik Larson.

High Court Win Could Lead to Bigger ACA Refunds: Health insurers could see a surge of cash following a Supreme Court decision that the federal government must pay the $12 billion it’d promised them under Obamacare. But that money could come in and go right back out. Under the law, health insurers that cover individuals and small businesses must spend at least 80% of their revenue on health-care costs or write rebate checks to their enrollees. Big-market insurers with more enrollees must spend at least 85% of their revenue on health costs. Even without the $12 billion payout from the government, insurers are on track to issue about $2.7 billion in rebates to their enrollees for 2020, data from the Kaiser Family Foundation show. Read more from Lydia Wheeler.

Trump Signs Second GI Bill Fix: Trump yesterday signed a bill that would allow additional student veterans who can’t complete their courses due to Covid-19 to maintain their educational benefits. The House passed the measure on March 31, and the Senate cleared it on April 21. The bill would authorize the Veterans Affairs Department to make payments or extend eligibility periods for students who participate in work-study or vocational rehabilitation programs, are affected by school closures, or can’t take courses online. For more, read the BGOV Bill Summary by Michael Smallberg.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com