Pelosi: Trump’s Diagnosis Could Speed Stimulus Bill

Pelosi: Trump’s Diagnosis Could Speed Stimulus Bill

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Plus, jobs report points to slowing recovery
Friday, October 2, 2020

Trump’s Brutal Covid Reality Check

As October surprises go, this sure is a doozy. President Trump’s announcement that he and First Lady Melania Trump tested positive for Covid-19 instantly reshapes his reelection race, but the ramifications of Trump’s infection may extend far beyond the campaign trail.
Trump’s illness, for example, could affect the public’s perception of the pandemic, or even reverberate through the economy. It could also give lawmakers a much-needed push to finally reach a deal on a long-stalled coronavirus relief package.

Here’s an overview of what’s happening and what it all means.

Trump heads to Walter Reed Medical Center:
Trump, 74, was being taken to Walter Reed Medical Center, where he is reportedly expected to spend a few days. “Out of an abundance of caution, and at the recommendation of his physician and medical experts, the President will be working from the presidential offices at Walter Reed for the next few days,” White House Press Secretary Kayleigh McEnany said. The White House had earlier said that Trump was experiencing mild symptoms. He reportedly had a “low-grade” fever.

All previously announced campaign events involving the President’s participation are in the process of being moved to virtual events or are being temporarily postponed," campaign manager Bill Stepien said in a statement. Despite Trump’s diagnosis, mask-wearing at the White House will reportedly remain optional.

Who else has tested positive:
Trump’s announcement came hours after White House aide Hope Hicks was reported to have the virus. Republican National Committee Chair Ronna McDaniel and Sen. Mike Lee (R-UT) have also tested positive, as did the University of Notre Dame’s president, Rev. John I. Jenkins, who attended the White House ceremony Saturday for Trump’s Supreme Court nominee, Judge Amy Coney Barrett, a professor at the school.

Who has tested negative:
Vice President Mike Pence and second lady Karen Pence; Joe Biden, Kamala Harris and their spouses; House Speaker Nancy Pelosi; White House Chief of Staff Mark Meadows; Treasury Secretary Steven Mnuchin; Secretary of State Mike Pompeo; Health and Human Services Secretary Alex Azar; Barrett, Trump’s Supreme Court nominee; Ivanka Trump and Jared Kushner; and the Trumps’ son Barron. Look for updates here.

The election impact:
Trump has tried mightily to portray his handling of the pandemic as a success and to shift the focus of the campaign away from the virus that has infected more than 7 million Americans and caused more than 208,000 deaths. That now will be impossible, as Trump’s infection will pull him from the campaign trail with the election just 32 days away and ensure that the pandemic and Trump’s dismissiveness toward it are top news for the final weeks of the race. It will be harder to convince anyone that the country has “turned the corner” on the pandemic. Mocking Joe Biden for wearing a mask and for campaigning “from his basement” won’t quite work when Trump himself is in quarantine.

A hit to the economy?
“This is almost certainly negative news for the economy, because the chances of a significant relaxation in lockdown provisions in the U.S. have just been sharply reduced,” writes Bloomberg’s John Authers. “It was much easier to argue for reopening the economy when a large part of the population truly believed that the pandemic was a hoax. That will change, and many individuals' behavior will probably alter even without an adjustment in the official rules.”

Changing how Americans see Covid?
Trump’s illness could get some Americans to take the threat of the virus more seriously — or it could have the opposite effect. “There is a genuine concern, and it’s not an unreasonable concern, that in the event that the president was to experience only mild illness, then he might seek to use that as evidence to further suggest that this is not as serious as what it actually is,” Adam Kamradt-Scott, who researches how governments and organizations deal with health challenges, told Bloomberg. “That would be unfortunate, would be the diplomatic way of putting it.”

Pelosi: Trump’s Diagnosis Could Speed Stimulus Bill

House Speaker Nancy Pelosi (D-CA) suggested Friday that Trump’s diagnosis could help negotiators reach agreement on another coronavirus relief package. “This kind of changes the dynamic because here they see the reality of what we have been saying all along — this is a vicious virus,” Pelosi said on MSNBC. “I’m optimistic. I’m always optimistic. We always have to find a path. That is our responsibility to do so. And I believe that we will.”

Pelosi spoke by phone with Treasury Secretary Steven Mnuchin for just over an hour and the two will continue discussions, according to Drew Hammill, Pelosi’s deputy chief of staff. In a letter to House Democrats, Pelosi outlined several areas where negotiators still have what she called “significant disagreements,” including unemployment insurance; aid to state and local governments and schools; the Earned Income and Child tax credits; and funding for testing and tracing.

“We are expecting a response from the White House on these areas and others with more detail,” Pelosi wrote. “In the meantime, we continue to work on the text to move quickly to facilitate an agreement.”

With the pace of talks accelerating, Pelosi also called on airlines to delay announced furloughs of thousands of workers. In a major shift, the speaker said that a $25 billion, six-month extension of federal payroll support for airlines would be passed as a standalone bill if negotiators don’t reach a broader deal. Some Republicans objected Friday to an attempt to pass a standalone payroll support measure under unanimous consent.

Many Republicans also remain opposed to another large relief bill and leaders from the conservative groups Americans for Prosperity, R Street, the Libre Initiative and Heritage Action held a conference call Friday urging lawmakers to reject a deal, according to The Washington Post. “We are very concerned about any possible deal at this point,” said Tim Phillips, president of American for Prosperity. “We are urging Congress: ‘Do not do another spending deal.’”

Job Growth Slows, Sparking New Worries About Economy

The unemployment rate dropped to 7.9% in September, the Labor Department announced Friday, as total nonfarm payroll employment rose by 661,000 during the month.

But what under normal circumstances would be blockbuster job numbers were seen as a disappointment, falling well below expectations of 800,000 jobs gained and providing fresh evidence that the recovery is losing momentum as fiscal support runs dry and the coronavirus continues to dampen economic activity.

Job growth is clearly slowing, falling from 1.8 million in July and 1.5 million in August, raising new concerns about how long it could take to recover the roughly 22 million jobs lost in the coronavirus recession. The economy has recovered about half of those jobs so far, leaving the labor market nearly 11 million in the hole. Some economists now say it could take until 2022 or even 2023 to recover them all.

“The jobs number is positive, but it’s flashing warning signs,” Ernie Tedeschi of Evercore ISI told The Washington Post. “It’s decelerating fast, and that worries me. If jobs growth is slowing, it’s going to take us longer and longer to recover from this recession."

Some jobs aren’t coming back. The number of workers saying their jobs were gone for good rose from 3.4 million in August to 3.8 million in September. And the number of long-term unemployed rose by 781,000, the largest monthly increase on that variable since data collection began in 1948.

Labor force shrinks:
The half a percentage point drop in the unemployment rate was impressive, but it fell not because there was such a surge in jobs but because so many people have given up looking for work, with the labor force participation rate falling by 0.3 points to 61.4%. Women were particularly hard hit, with more than 860,000 female workers leaving the labor force in September, the great majority of the 1.1 million who dropped out.

“A drop in participation is unequivocally bad for the labor market outlook,” said Wells Fargo economist Sarah House. “It has the potential to prolong the overall recovery as workers are more disengaged with the labor market.”

An “illusion of progress”:
Nick Bunker, economic research director at the job search site Indeed, said the latest employment report is “massively concerning. We are not where we need to be, nor are we moving fast enough in the right direction as we head into fall.” The numbers provide “an illusion of progress at a time when we needed accelerating gains in the labor market. The number of jobs added this month is just not enough,” he said.

Hopes for more stimulus:
The lack of additional fiscal support is a real concern, said Gus Faucher, chief economist at PNC. “The low-hanging fruit has been picked, and the job market recovery will slow further going forward,” he said. “A surge in coronavirus cases in late 2020 could lead to further business closures. An inability to pass additional fiscal stimulus — including aid to households, small and mid-size businesses, and state and local governments — is another downside risk.”

Mark Zandi, chief economist of Moody’s Analytics, said the report “is just proof positive that this is no V-shaped recovery. It’s going to be a slog. The economy risks stalling out without any additional fiscal support.”

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