What to Know in Washington: Trump Waits Amid Stimulus Pressure

President Donald Trump and allies are holding off on more coronavirus-related stimulus as his team tracks the impact of some $5 trillion already poured into the economy — and banks on an economic rebound as shutdown measures are eased.

But they may find themselves under more pressure to act again, sooner than they expected, if efforts to reopen the economy don’t rapidly bear fruit.

Republicans and Democrats joined together in March to fast-track three stimulus measures totaling about $3 trillion as the economy collapsed from social-distancing practices Americans adopted to protect themselves from infection. The U.S. Federal Reserve played its part with two emergency rate cuts, and worked with Treasury to offer $2.3 trillion in loans.

Now, conventional partisan divisions are beginning to emerge as Washington’s policy makers grapple with whether the money was enough.

Democrats and a handful of Republicans are seeking a fourth round of stimulus, particularly to help states faced with massive budget deficits. Speaker Nancy Pelosi (D-Calif.), working with Senate Democrats, has been advocating a massive aid package to get the economy restarted. The House may vote on that legislation as soon as Friday.

Trump has expressed skepticism over helping states with large pension obligations, while pushing for a payroll tax cut that’s opposed by most Democrats and some Republicans.

“We’re transitioning to greatness, and the greatness is going to be in the fourth quarter — but it’s really going to be next year, and it’s going to be a year like we’ve never had before,” Trump said at a White House news conference yesterday.

His economic advisers Larry Kudlow and Kevin Hassett spoke with Republican senators yesterday afternoon as both parties chart a path forward.

Trump will meet with Republican senators at the White House today, according to his daily schedule. Josh Wingrove and Saleha Mohsin have the latest.

Fed’s Role: The measures the government has already taken are still working their way into the economy. Treasury Secretary Steven Mnuchin has so far used less than half of $454 billion Congress authorized as backstops for Fed lending programs. He’s said he’s waiting for four more lending programs the Fed has yet to launch before deciding which ones should be expanded.

For each dollar Mnuchin pledges to the central bank through the Treasury’s Exchange Stabilization Fund, the Fed can leverage $10 in lending to corporations, small and medium sized businesses, and state and local governments.

“What the president has said is, let’s step back for a few weeks, let’s be very considerate in what we do in the next round before we go consider spending another trillion,” Mnuchin said in an interview on CNBC on Monday. “But the president is determined we’ll do whatever we need to do.”

Happening on the Hill

Fauci Leads Health Experts Testifying on Reopening: Top U.S. health officials will discuss how to safely restart the economy before a Senate committee today, with three of the four witnesses — including Anthony Fauci — and the panel’s chairman all appearing remotely because of potential exposure to coronavirus.

The circumstances of the Health Committee hearing, which will include Fauci, the nation’s leading infectious disease expert, and Robert Redfield, director of the Centers for Disease Control and Prevention, accentuates the difficulty the U.S. faces as states move to let businesses reopen and encourage consumers to go out and spend. Amid the sharpest downturn in U.S. history, Trump has been pressing to begin relaxing the lockdowns that have shuttered businesses despite warnings from some public health experts that doing so too quickly risks a further spread of the virus.

Fauci indicated late yesterday he plans to issue a stern warning against cutting corners on standards set by the administration. These include thresholds such as a “downward trajectory” of documented cases or positive tests “within a 14-day period.” Trump has urged governors to move toward easing their lockdowns even though many states don’t meet those standards.

Citing “the danger of trying to open the country prematurely,” Fauci said in an email to a New York Times reporter, “If we skip over the checkpoints in the guidelines to ‘Open America Again,’ then we risk the danger of multiple outbreaks throughout the country. This will not only result in needless suffering and death, but would actually set us back on our quest to return to normal.” Read more from Laura Litvan.

Coronavirus Oversight Panel to Focus on Reopening: A new House panel created to oversee coronavirus relief spending will focus its first briefing on requirements to safely reopen the American economy during the coronavirus pandemic. Among participants at the hearing tomorrow will be former Food and Drug Administration Commissioner Scott Gottlieb, one of the authors of a report released in late March by the conservative American Enterprise Institute, “National Coronavirus Response: A Road Map to Reopening.” Gottlieb served as head of the FDA under Trump until April of last year.

The 12-member committee is led by Rep. Jim Clyburn (D-S.C.), the No. 3 House Democrat. It was created on a party-line vote when lawmakers were in Washington last month to pass the most recent coronavirus aid package. There are seven Democrats and five Republicans on the panel. Republicans have warned they believe Democrats will use the committee for partisan attacks on Trump and his administration. Read more from Billy House.

Defense Bill Passage Seen Likely by July 4: The Senate is on track to be in a position to pass the fiscal 2021 national defense authorization bill by the July 4th holiday, according to a Senate aide familiar with the matter. An aide for the Senate Armed Services Committee said the panel still has to write the bill, which authorizes spending and sets Pentagon policy. Chairman Jim Inhofe (R-Okla.) has said the panel would try to mark up the measure the week of May 18, but that is no longer the plan. Read more from Roxana Tiron.

Senate Joins Calls for Taiwan to Regain WHO Observer Status: The Senate yesterday unanimously approved a bill seeking the restoration of Taiwan’s observer status with the World Health Organization, escalating an international campaign to push back against Chinese efforts to isolate the island. The bipartisan measure calls on the State Department to report about Taiwan’s participation as an observer at the World Health Assembly — a key WHO decision-making body set to meet next week. The bill, which hasn’t yet been passed by the House, would also direct Secretary of State Michael Pompeo to explain any department plans to help Taipei reclaim its observer status. Read more from Karen Leigh and Nancy Ognanovich.

Cruz Seeks to End Dependence on China for Rare Earths: Sen. Ted Cruz (R-Texas) said he plans to introduce legislation today that aims to end U.S. reliance on China for rare earth elements used in the manufacturing of products including consumer electronics, electric vehicles and fighter planes. The bill is part of a push in Congress to shift supply chains, particularly in industries critical for national defense, away from China and back toward the U.S. Read more from Daniel Flatley.

Testing, Treatment & Reopening

Trump Declares ‘We Have Prevailed’ on Testing: Trump declared yesterday at a White House news conference on the coronavirus that “we have prevailed,” as U.S. deaths from the virus exceeded 80,000, a remark he later said pertained only to testing for the infection. “Thanks to the courage of our citizens and our aggressive strategy, hundreds of thousands of lives have been saved,” he said.

There have been over 1.3 million cases of Covid-19 in the U.S., according to data compiled by Bloomberg. The U.S. didn’t exceed 100,000 tests performed until March 19, according to data compiled by the Covid Tracking Project, but more than 300,000 tests were conducted daily on Thursday, Friday and Saturday. The Health and Human Services Department’s No. 2 official, Brett Giroir, added that the U.S. should shortly be on pace to conduct 9 million tests per month. Justin Sink and Mario Parker have more.

The Trump administration plans to distribute $11 billion to states for coronavirus testing, according to senior administration officials. The $11 billion is part of the CARES Act stimulus package. It will be distributed under a formula that reflects the burden of Covid-19 as well as population-based estimates, the officials said. The administration plans to release details about the distribution in the next day or two, the officials said. Read more from Emma Court.

Multiple Vaccines Likely Needed, NIH Head Says: Several vaccines will likely be needed to fight the coronavirus and immunize groups of people in the U.S. and abroad, National Institutes of Health Director Francis Collins said. Collins is a geneticist who leads the agency overseeing the U.S. research response to the virus. Speaking to Bloomberg News yesterday, Collins discussed the efforts to develop and manufacture a vaccine, potential mutations of the virus and what it means for immunity, and how inoculations might be tested, Riley Griffin reports.

Park Reopenings Spur Debate: The Great Smoky Mountains National Park that sprawls across 522,427 acres of North Carolina and Tennessee may seem like the perfect place to practice social distancing. Yet visitors to its lush, mountainous terrain tend to congregate at well-known spots like Clingmans Dome, where they can stand at the highest point in Tennessee, or Grotto Falls, where they can walk behind a waterfall. That tendency has park advocates and former employees worrying about its reopening last weekend — and the plan for other national parks to follow in coming weeks at the urging of Trump — even as coronavirus infections nationwide continue to climb. Read more from Jennifer A. Dlouhy.

Elections, Politics & Policy

BGOV Podcast — California Data Guru on Today’s Special Election: Paul Mitchell, a Sacramento-based vice president at Political Data Inc., joined the latest episode of Downballot Counts to discuss today’s highly competitive special election in California’s 25th District. Republicans hope to capitalize on the oddly timed contest taking place north of Los Angeles and win back one of seven seats the party lost in the state in 2018. Listen to the latest episode of Downballot Counts

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Trump Edges Biden in Fundraising Totals: Trump’s re-election effort raised $61.7 million in April, narrowly topping Joe Biden and the Democratic National Committee in the first full month of lockdown fundraising. “While day-to-day life may have slowed this past month, enthusiasm and support for this president has not,” Ronna McDaniel, chairwoman of the Republican National Committee, said in a statement. The combined total raised by Trump, the RNC and their supporting committees was just shy of their $63 million haul in March. Biden announced earlier Monday that his campaign and the DNC raised $60.5 million in April. Read more from Bill Allison.

DNC Seeks to Allow Remote Participation at Convention: The Democratic National Committee is considering allowing delegates to the nominating convention to participate remotely while giving organizers free rein to make whatever changes are necessary to “protect the public safety” amid the coronavirus pandemic.

The new rules, which will first be voted on today by the Rules and Bylaws Committee before going to all DNC members for a vote, could dramatically change the scale of the party’s convention, scheduled to begin on Aug. 17. Officials said the convention planners were exploring a range of options to ensure all delegates would be able to cast ballots, regardless of their ability to participate in person. The resolution would also confirm that the convention committee’s “authority to plan, arrange, manage and conduct the convention includes the ability to alter the date and other aspects of the convention in order to protect the public safety and ensure compliance with applicable laws.” Read more from Tyler Pager.

Stacey Abrams Endorses Biden for President: Stacey Abrams, the former minority leader of the Georgia House of Representatives, has endorsed Biden for president, pointing to his commitment to fighting climate change, leading an economic recovery and protecting every eligible American’s right to vote.

“While marginalized communities struggle under Donald Trump’s failed leadership and people of color face disproportionate consequences of COVID-19, Joe Biden will take no one for granted,” Abrams says in a statement about the presumptive Democratic nominee Biden. Abrams was Georgia’s Democratic candidate for governor in 2018 and the first African-American woman to become the gubernatorial nominee for a major U.S. party. She has expressed interest in being Biden’s presidential running mate, Deana Kjuka reports.

Reade Team Asks Biden for Delaware Archive: An attorney for Tara Reade yesterday asked Biden to authorize a search of his archives of Senate papers at the University of Delaware for records related to Reade’s accusation that Biden sexually assaulted her in 1993. “Given that you have repeatedly made a blanket denial of any knowledge of any complaint made by Ms. Reade against you, I am sure you would agree that we all deserve to know whether there are, in fact, any records that corroborate Ms. Reade’s allegations in your Archives,” Reade’s lawyer Doug Wigdor wrote. Jeffrey Taylor has more.

What Else to Know Today

Treasury’s Stances on Virus Relief Draw Ire: Narrow tax guidance on some parts of recently enacted coronavirus relief has sparked criticism that the IRS and Treasury aren’t interpreting the law correctly. Read more from Allyson Versprille, Aysha Bagchi and Jeffery Leon.

Companies Cry Foul in Food-Box Contracts Derby: The Agriculture Department is shelling out more than $1.2 billion for food boxes designed to relieve Americans’ hunger and farmers’ sales losses during the coronavirus pandemic. One of the biggest awards —$39 million—will go to a Texas event manager that specializes in weddings. Megan U. Boyanton has more on the loans’s winners and losers.

White House Cuts Off Fund’s Investment in China Stocks: The Trump administration moved on last night to block investments in Chinese stocks by a government retirement savings fund. National Economic Council Director Larry Kudlow and National Security Adviser Robert O’Brien made the administration’s wishes known in a letter to Labor Secretary Eugene Scalia, according to a person familiar with the matter, Justin Sink and Jenny Leonard report.

Facebook Violence Curbs Thwarted by Code Words: Membership in Facebook groups focused on violent anti-government uprisings in the U.S. has doubled in recent weeks as the coronavirus pandemic has spread and governments impose restrictions aimed at slowing the contagion. To get their message across, these groups are exploiting loopholes in Facebook anti-violence policies. Read more from Misyrlena Egkolfopoulou and Alyza Sebenius.

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