Pelosi: Trump’s Diagnosis Could Speed Stimulus Bill

By Yuval Rosenberg

Trump’s Brutal Covid Reality Check

As October surprises go, this was 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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