What to Know in Washington: Senate on Track to Pass Virus Bill

Treasury Secretary Steven Mnuchin is rallying Senate Republicans to quickly pass the House package of virus-related economic measures, seeking to overcome any reservations by looking ahead to the next round of fiscal stimulus.

The Senate could take up the House-passed bill as soon as today, when Mnuchin is planning to be back on Capitol Hill to meet with Senate Republicans during their weekly lunch.

The House yesterday passed technical corrections to its coronavirus bill, which was first crafted over a week ago as the virus was intensifying in the U.S. Now the White House and most lawmakers are eager to send the bill to President Donald Trump for his signature and to follow up with more ambitious bills.

“We have a lot more work to do,” Mnuchin said yesterday on Capitol Hill. He said he spoke with Republican senators about about additional economic stimulus bills they will work on “ASAP.”

Plunging stock prices and the abrupt drop-off of consumer spending during a time of social distancing has crystallized the need for Congress to act quickly and boldly. The Federal Reserve has already used much of its toolbox to shore up the economy, leaving policymakers to dull the extent of the damage with fiscal stimulus.

The House bill, negotiated by Mnuchin and Speaker Nancy Pelosi (D-Calif.) last week and blessed by the president, pays for virus testing, bolsters unemployment and food assistance and will send tens of billions in fresh aid to states.

Its centerpiece gives workers at companies with fewer than 500 employees up to 12 weeks of paid family and sick leave to deal with issues involving the coronavirus, including staying home to care for children home from school. The tax credits for paid family, sick and medical leave in the virus bill would cost nearly $104.9 billion, according to the Joint Committee on Taxation.

Although Trump said earlier yesterday he wanted all workers to be covered by the paid leave provision and said the Senate could alter the bill, White House legislative liaison Eric Ueland said it would be misquoting the president to say he wanted the Senate to change the bill. Laura Litvan and Billy House have the latest.

Photographer: Oliver Contreras/Sipa/Bloomberg
Trump at a White House briefing on the virus on Monday.

Trump Shifts Tone on Virus Health Response

Trump markedly shifted his tone on the coronavirus outbreak, warning yesterday that it could last months and drive the U.S. into an economic recession after he had repeatedly minimized the impact.

In a remarkable pivot, Trump advised Americans against gathering in groups of more than 10 people and said they should stop eating out at restaurants and going to bars. Children should be educated at home to the extent possible, he said. The U.S. may still be fighting the outbreak until August or later, he said.

“Someday soon, hopefully, it will end and we’ll be back to where it was,” Trump said, but he acknowledged: “It’s bad. It’s bad. We’re going to hopefully be a best case and not a worst case.”

There have been more than 4,000 cases of the virus in the U.S. and 71 deaths from the disease, according to Johns Hopkins University. Yesterday, the benchmark S&P 500 stock market index fell nearly 12%, the most since 1987, and Trump acknowledged that the U.S. economy may enter a recession.

“We have an invisible enemy, we have a problem that a month ago nobody ever thought about,” Trump said. “I’ve seen all of the different problems similar to this that we’ve had — this is a bad one, this is a very bad one, this is bad in the sense that it’s so contagious, it’s just so contagious, sort of record-setting type contagion.” Read more from Jennifer Jacobs.

U.S. Called Private Sector in Late in Testing Ramp Up: Every outbreak of a new disease is a race between the pathogen and the people trying to stop it: At first, the virus is somewhere out in front. Catch up with it before new patients become contagious, and it can be surrounded and cut off. Let it run too far ahead, and the race is lost. In the U.S., the race to contain the new coronavirus with testing is all but over.

With reported cases rising rapidly, hospitals are anticipating a wave of sick patients and struggling to secure supplies of surgical masks, eye protection devices, and ventilators. States are now trying to limit the damage from the pathogen, which experts believe could infect at least half of the country’s 329 million people, curtail economic and personal activity for weeks or months, and plunge the economy into recession.

“We’re so far behind this thing at this point. And the reason we’re so far behind is because we’ve had so little testing,” said Ashish Jha, director of the Harvard Global Health Institute. “This is such a rapidly moving infection that losing a few days is bad, and losing a couple of weeks is terrible,” Jha said. “Losing 2 months is close to disastrous, and that’s what we did.” Read more from Emma Court.

DOD Stance in Virus Treatment: The Pentagon is expressing caution about its ability to provide swift medical assistance in the effort to treat the coronavirus outbreak after former Vice President Joe Biden called for a mobilization using military hospitals and tents. The Defense Department’s 36 hospitals in the U.S. are better-suited to treating battlefield traumas than contagious diseases and are designed to meet the “immediate” needs of service members and families, Air Force Brigadier Gen Paul Friedrichs, the surgeon who advises the Joint Staff, told reporters. He said the same is true for “deployable” hospitals. “We do not have any 500-bed hospitals designed for infectious disease outbreaks,” he said.

The remarks came after Biden, the leading Democratic presidential candidate, said in his debate with Sen. Bernie Sanders (I-Vt.) on Sunday that the U.S. military should be called upon to do more to help respond to the spread of the virus. “The answer is I would call out the military,” Biden said. “They have the capacity to provide this surge.” Read more from Glen Carey and Roxana Tiron.

Europe, U.K. Limit Travel: The European Union proposed a temporary halt to non-essential travel, while Canada and the U.K. placed restrictions on who can enter the country, further steps to firm up the world’s borders to prevent the spread of Covid-19. Read more from Nikos Chrysoloras, Viktoria Dendrinou and Milda Seputyte.

Teachers Union Demand Shutdown: The National Education Association, the largest teachers union and largest single labor union in the U.S., said yesterday that schools across the country should close for at least two weeks in response to the outbreak of coronavirus. The CDC on Sunday issued a recommendation against gatherings of more than 50 people, but it exempted schools. President Lily Eskelsen García said the same standards should apply to school campuses to protect students and teachers.

The American Federation of Teachers, the second-largest teachers union, called a national school shutdown “inevitable” but the group didn’t call for a shutdown outright. Both groups said states and school districts should prepare to provide support, including meal services, to vulnerable students should campuses close, Andrew Kreighbaum reports.

More on the Economic Response

Economists Rush to Quantify Recession: Trump now sees the risk of a U.S. recession due to the coronavirus. His frankness, which contradicted his previous optimism and the view of Secretary Mnuchin one day earlier that the nation could skirt this fate, rattled investors, with stocks closing 12% lower for their steepest losses since 1987.

Forecasts for the U.S. vary wildly, with some guessing economic activity could decline by as much as 5% or even 10% in the second quarter. An even harder question is how long the slowdown will last: a short, sharp shock or something lingering or nasty. “The middle two quarters of this year are going to be very challenging even if we get the spread of the coronavirus under control quickly,” said Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago and a former Fed staffer. Read more from Christopher Condon and Jeff Kearns.

Direct Aid for U.S. Airlines: Senate Republican leaders are discussing options to help the U.S. airline industry weather the slowdown in business caused by the pandemic, including loan guarantees and direct financial aid, Senate Transportation Chairman Roger Wicker (R-Miss.) said before he joined McConnell and others for a closed-door meeting. “Loan guarantees properly structured can be helpful but we may need a cash infusion,” he said. Read more from Nancy Ognanovich.

States And Cities Scramble: Faster unemployment benefits were instituted yesterday in at least three states, and San Francisco announced it will help private employers pay sick leave as governors and mayors moved to blunt the impact of paychecks lost because of the new coronavirus. “We want everyone to know that staying home to take care of themselves and their families is the most important thing they can do,” San Francisco Mayor London Breed said.

Meanwhile, the California Legislature yesterday unanimously passed an aid package that would provide an initial $500 million and allow for as much as $1 billion to be appropriated if needed. Lawmakers also unanimously sent Gov. Gavin Newsom (D) a $100 million appropriation to help schools pay for cleanup and buy protective equipment. Alex Ebert, Joyce E. Cutler and Keshia Clukey have more on how states are reacting.

Student Loan Reprieves: Struggling student loan borrowers will get a reprieve on interest when they seek forbearance under a debt relief plan announced by the White House, though they won’t see changes to monthly payments. Trump‘s announcement on March 13 that he was waiving interest on all federal student loans “until further notice” to provide relief from the impact of the coronavirus doesn’t translate into immediate savings for borrowers. Instead, it potentially could deliver savings later. Read more from Andrew Kreighbaum.

Digital Research Database: The White House Office of Science and Technology Policy on Monday unveiled a new database with thousands of scientific articles about the coronavirus in hopes to help public health experts fight the outbreak. U.S. Chief Technology Officer Michael Krastios told reporters the new database is a “call to action” for tech companies to leverage artificial intelligence to mine the research to answer important questions about the virus. Naomi Nix has more.

Utilities Vow to Keep Water Flowing: More than 100 public utilities in at least 34 states have agreed to halt the practice of cutting off water to homes that fail to pay their water bills during the coronavirus crisis. The CDC has been urging people to wash their hands regularly with soap, saying it’s one of the best ways of keeping the Covid-19 virus at bay. But that’s only possible if a household has tap water. Amena H. Saiyid has more.

Elections, Politics & Policy

Biden Set to Lock in Lead Even Though Virus Closes Ohio Polls: Narrow victories by Joe Biden in today’s primaries would effectively end the Democratic presidential nomination fight, making it nearly impossible for Sen. Bernie Sanders (I-Vt.) to capture the delegates needed.

Three states, Arizona, Florida and Illinois will hold votes today despite concerns about voters and poll workers becoming infected with the coronavirus. Ohio was scheduled to have a primary as well, but back-and-forth court action late yesterday ended with the voting being delayed.

Ohio Gov. Mike DeWine (R) had asked a court to delay his state’s primary to June 2, and two people in their 60s sued, saying they shouldn’t have to choose between their health and voting. But Franklin County Common Pleas Judge Richard Frye said it would be a “terrible precedent” for a court to step in at the last minute to rewrite the election code. Within hours, DeWine said the state health director, Amy Acton, would order the polls closed as a health emergency. He said the secretary of state, Frank LaRose, would work to extend voting options “so that every voter who wants to vote will be granted that opportunity.”

Biden was heavily favored in all four states, as well as the remaining major contests in the spring, a continuation of his sweep of the contests since South Carolina that has put him on a glide path to the nomination. Read more from Gregory Korte and Mark Niquette.

Kentucky Delays May 19 Primary: Kentucky will delay its scheduled May 19 Democratic and Republican primaries until June 23 due to the virus outbreak. Kentucky’s secretary of state said in a Twitter post he hopes the postponement will enable a “normal” primary election in June. County clerks of both parties agreed on the move, Kim Chipman reports.

Biden Wins Washington State: Joe Biden has won the Democratic primary in Washington state, with late-breaking votes depriving Sanders of a much-needed win. NBC, ABC and the New York Times called the state for Biden yesterday, six days after a mail-only March 10 primary election was deemed too close to call. Sanders was ahead in the race on Election Night. But updated election results yesterday showed that late-breaking votes postmarked by Election Day but received afterward predominately went Biden’s way, giving him a 23,000-vote margin over Sanders. Read more from Gregory Korte.

What Else to Know

Renewal of Surveillance Authority: The Senate yesterday approved a stopgap bill restoring expired federal surveillance powers under the Foreign Intelligence Surveillance Act for 77 days. McConnell said the Senate approved the temporary extension by voice vote, providing time to debate objections to the law without letting the authority for U.S. intelligence agencies to monitor communication of suspected terrorists lapse for an extended period. Provisions of the act expired Sunday. The House will still have to vote on the short-term extension. Read more from Laura Litvan and Steven T. Dennis.

Senators Ask Saudi Arabia to Review Oil Supply Plans: Thirteen Republican Senators asked Saudi Arabia to calm economic anxiety in the oil and gas sector as the coronavirus continues to impact markets. The letter came after guidance was issued by the country’s energy minister to lower crude prices and boost output capacity, Elizabeth Elkin reports.

Justice Department Targets Criminals Exploiting Fear: Federal prosecutors across the U.S. will make it a priority to investigate and punish criminals who seek to take advantage of public fear over the coronavirus crisis, such as peddling fake cures or carrying out cyber attacks, Attorney General William Barr announced yesterday. The mandate was conveyed in a directive that Barr issued to the nation’s 93 U.S. attorney’s offices following reports of online scams, including individuals and businesses selling bogus treatments as well as hackers inserting malicious software onto mobile apps designed to track infections. Read more from Chris Strohm.

Equal Employment Agency Picks: Trump sent to the Senate his nominations for three seats on the Equal Employment Opportunity Commission and for two on the National Labor Relations Board, moving to fill long-term vacancies and shore up future openings ahead of the November election. Trump nominated Labor Department official Keith Sonderling and Gibson Dunn attorney Andrea Lucas for Republican EEOC seats and civil rights attorney Jocelyn Samuels for a Democratic post on the commission, the White House announced. Sonderling and Samuels would fill seats currently vacant, while Lucas would eventually replace commissioner Victoria Lipnic (R).

Trump also nominated former NLRB member Lauren McFerran (D) and current member Marvin Kaplan (R) for new five-year terms on the panel, which monitors union elections and enforces federal labor relations law. McFerran left the NLRB when her first term expired in December, and Kaplan’s term ends in August. The five nominees, which Bloomberg Law previously reported Trump was expected to announce, are likely to be considered as a single block. Chris Opfer has more.

DOD Names Lietzau Head of Counterintelligence, Security Agency: The Defense Department announced William Lietzau as the new director of the Defense Counterintelligence and Security Agency. Lietzau replaces Acting Director Charles Phalen Jr., who has held the role since July, DOD said in a statement, Ben Livesey reports.

Space National Guard: Senior Pentagon leaders favor the creation of a Space National Guard for already existing state military space units and personnel as they transition to the new active-duty Space Force service, according to a draft obtained by BGOV. Gen. John Raymond, the Space Force chief, considered five scenarios for managing 1,244 Air National Guard space personnel in six states and the territory of Guam, including making no changes. Moving them into an independent new Space National Guard is the top recommendation, the draft said. Read more from Travis J. Tritten.

U.S. Drops ‘Putin’s Chef’ Firm in Case: U.S. prosecutors said they’ve decided to drop charges against a Russian company accused of bankrolling a troll farm to influence the 2016 presidential election, saying that continuing to go after the company wasn’t in the interest of justice. The government said yesterday in a filing in Washington that it was dropping charges against Concord Management and Consulting LLC, a company controlled by a close ally of Russian President Vladimir Putin. Read more from Erik Larson.

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; Michaela Ross at mross@bgov.com; Loren Duggan at lduggan@bgov.com