The GOP’s Big Bet on a Quick Coronavirus Recovery

By Yuval Rosenberg

The GOP’s Big Bet on a Quick Coronavirus Recovery

The U.S. economy is officially in a
pandemic-driven recession, but don’t expect
another coronavirus relief bill until late next month.

The U.S. Senate is in session for the rest of the month, but
several top Senate Republicans
said Monday that they don’t expect to take up any
“phase four” package of pandemic relief until after their
two-week-long July 4th recess.

White House wants another relief bill: That July timing
jibes with the timeframe laid out by White House economic adviser
Larry Kudlow, who
said recently that he expects formal bipartisan
negotiations for the next bill to start only after the Independence
Day weekend. Kevin Hassett, an economic adviser to President Trump,

said Tuesday in an interview with The Wall Street
Journal that he sees another round of aid before the August recess
and that the White House “would definitely support” another
package.

"There are a lot of things that really are necessary to make
sure that once we open up that we actually lift off,” Hassett said.
“The odds of a Phase Four deal is something we talked with the
president about last week. We even had a small group meeting this
morning to talk about it. The odds of a Phase Four deal are very,
very high.”

A next round of relief in late July would also coincide with the
expiration of enhanced unemployment benefits providing an
additional $600 a week in assistance, which are set to expire July
31.

The GOP’s risky waiting game: As Politico’s Burgess
Everett and Marianne LeVine
write, the GOP’s lack of urgency on additional
coronavirus legislation is essentially a big bet on a strong
economic rebound — a bet that, despite last week’s surprisingly
strong May jobs report, could still backfire:

“Republicans say it’s only responsible to wait and see how
nearly $3 trillion in total coronavirus spending seeps into the
economy. But it’s also a gamble: if the economic recovery isn’t as
strong as they predict, they risk being blamed by voters in
November that they and President Donald Trump didn’t do enough amid
a global pandemic and historic recession.”

Senate Minority Leader Chuck Schumer (D-NY) on Monday called on
Republicans to pass the next coronavirus package in the weeks
ahead, before senators leave for their recess. “I fear that the
recent bump in the employment number, caused in large part because
of the stimulus money we pumped into the economy, will create in
Republicans a sense of complacency and the economy will get even
worse,” Schumer said, according to Politico.

The bottom line: The recession may
already be over, and the jobs numbers announced Friday likely means
that any additional coronavirus relief will be smaller than
previously expected, whenever it comes. Chris Krueger of Cowen
Washington Research Group on Monday lowered his expectations for
the next package from $2 trillion to about $1 trillion.

Chart of the Day: A Very Deep Hole for Jobs

Last week’s jobs report certainly contained some good
news, with employers hiring more than 2 million people during the
month of May, much to the surprise of experts who expected millions
of jobs to be lost. But as this chart from the Washington Post
makes clear, it’s important to recognize just how deep a hole the
job market must climb out of in the wake of the coronavirus.

"All net U.S. job gains since 2011 have been wiped out,”

says the Post’s Catherine Rampell. “The
unemployment rate remains higher than it was at any point during
the Great Recession, and millions of people who have jobs still
can’t secure enough hours. Once we adjust for such underemployment,
people who want to work but have given up looking and a persistent
worker misclassification issue that the Bureau of Labor Statistics
has struggled to solve, it becomes clear that about a quarter of
all Americans who wanted to work last month couldn’t find
sufficient work.”

Health Care Providers to Receive $25 Billion

The Department of Health and Human Services
said Tuesday that it will distribute $25 billion
this week to health care providers who work with low-income
populations, with the money coming from congressional
appropriations targeting hospitals and caregivers struggling amid
the coronavirus pandemic.

Providers in the Medicaid and CHIP (Children’s Health Insurance
Program) systems will receive $15 billion, while safety-net
hospitals, which serve all populations regardless of their ability
to pay, will get $10 billion. The money is part of $175 billion in
relief funds allocated by Congress for hospitals and health care
providers.

The move comes after a bipartisan chorus of critics charged the
Trump administration with moving too slowly to provide the money,
The Hill
reports. In a letter to HHS last week, a groups of
lawmakers including Sen. Chuck Grassley (R-IA), Sen. Ron Wyden
(D-OR), Rep. Frank Pallone, Jr. (D-NJ) and Rep. Greg Walden (R-OR)
said they had “serious concerns” about delays in the distribution
of the funds.

“Many of these providers are safety net providers that operate
on thin profit margins, if at all,” the lawmakers wrote. “The
COVID-19 pandemic has strained their already scarce resources,
threatening their ability to keep their doors open in the midst of
a declared public health emergency.”

The administration has distributed about $70 billion so
far from the pandemic health care fund, with most of the money
going to providers in the Medicare system. Health care officials
say that the complicated structure of the low-income health care
system has made it difficult to distribute the funds to Medicaid
providers in a timely manner.

Number of the Day: $547 Billion

The cost to private insurers for treating Covid-19 could
be anywhere from $30 billion to $547 billion over this year and
next, according to
updated estimates released Monday by consulting
firm Wakely. The report was commissioned by America’s Health
Insurance Plans (AHIP), the insurance industry’s lobbying arm. A
previous report estimated the Covid treatment costs to be between
$56 and $556 billion.

Factoring in delayed medical care resulting from the pandemic
significantly alters the picture: “Incorporating deferred care with
the treatment costs generally decreases the overall impact to
insurers, resulting in a total impact of between -$76 and $216
billion for 2020 and 2021 combined.”

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