PROTECTING OUR PEOPLE AND OUR ECONOMY FROM CORONAVIRUS
Elizabeth has a bold plan to limit the spread of coronavirus and address the economic disruptions the virus will cause. Add your name: if you agree we need a president who plans ahead and responds fast.
This plan was originally released during Senator Elizabeth Warren’s presidential campaign.
Coronavirus is a public health emergency and a serious threat to the American economy. While it's important that our leaders communicate calmly and clearly about the situation to avoid unnecessary panic, it’s just as important that we take decisive action to keep American families healthy and stabilize our economy as the virus spreads.
Coronavirus is already hitting other countries hard. Major cities in China have been effectively shut down for weeks. Japan just announced that it was closing schools for about a month. The number of confirmed coronavirus cases in Italy, Iran, and South Korea continues to grow.
And now coronavirus is here. This weekend, the U.S. experienced its first death from the virus and there are at least two coronavirus cases of apparent local origin in California, two in Washington, and one in Oregon. Firms like Amazon have suspended non-essential employee travel in the United States and US film and TV productions have cancelled or suspended shoots.
Weeks ago, I was the first presidential candidate to put out a plan to address the public health effects of coronavirus. And with Republicans insisting that we cut spending elsewhere to cover the cost of coronavirus response, I introduced a bill in the Senate to immediately move the billions of dollars taxpayers are spending on Donald Trump’s useless border wall to coronavirus preparedness instead.
But it’s clear that we must do even more to contain the spread of the virus and to address the economic damage it is creating. The Dow Jones dropped nearly 12% last week—its worst week since the 2008 financial crisis—but the plummeting stock market is just the tip of the iceberg. Small businesses that rely on overseas production are suffering. American exporters in agriculture and forestry are losing access to valuable overseas markets. Tourism is down sharply.
Supply chain disruptions due to halted production in China and elsewhere will ripple through the economy for months, especially in critical industries like automobiles and electronics. And coronavirus has exposed a critical weakness in our drug supply chain. Active pharmaceutical ingredients are the chemical components of drugs that make them work—and a significant portion of them are manufactured in China, which means supply chain disruption may eventually cause drug shortages in the U.S.
Analysts now project that American companies will generate zero earnings growth in 2020 because of coronavirus. And if the coronavirus reaches global pandemic levels, experts predict that it could lead to a recession in the US and across the globe.
The Trump Administration response has been a mess. The President has put Vice President Mike Pence in charge of coordinating the response—the same man who ignored scientific experts and presided over a public health emergency as Governor of Indiana. Instead of buckling down and working on our response after being put in charge, Pence promptly spoke at a right-wing conference and jetted off to Florida for a Republican fundraiser. Meanwhile, the Trump Administration appears to have no ideas for dealing with the widespread economic effects of coronavirus except more tax cuts.
I rang the warning bells for years before the 2008 crisis. Quicker action during the Bush Administration could have reduced the severity of the crisis—or averted it entirely. While we still don’t know the full scope of the public health and economic impact of coronavirus, and even further actions may be necessary in upcoming months, we should take the following steps right now to limit the spread of the virus and get ahead of its economic impact:
Ensure that every American—including the millions of Americans who are uninsured—can get all recommended evaluation and care for coronavirus for free, including any recommended coronavirus vaccine once it is developed.
Create an emergency paid leave program so that anyone presenting with the symptoms of coronavirus, or who has a family member or other dependent presenting with the symptoms of coronavirus, can get fully paid time off of work to see a doctor, get treatment, or provide care.
Enact at least a $400 billion fiscal stimulus package to head off the potential economic impact of coronavirus.
ENSURING EVERY AMERICAN CAN GET FREE CARE FOR CORONAVIRUS
The request for emergency supplemental funding put forward by Senate Democrats is a good proposal. I strongly support it. But I believe we must also do more.
Paying for Care. Donald Trump has spent years ripping health coverage away from millions. As deductibles soar, many Americans must pay full price for care until months into a new plan year, as they wait for their insurance to kick in. People without coverage often do not seek the care they need and those with high deductibles delay important care. And for those who are put under federally mandated quarantines, thousands of dollars in medical bills may plunge them into a serious financial crisis. Millions of Americans choosing not to seek care because of cost concerns will worsen the public health and economic effects of coronavirus.
Medicare for All will prevent this kind of problem in the future. But in the short term, facing a potential outbreak, we must ensure that every person in this country can talk to a doctor if they think they might have coronavirus—and get the recommended testing and care they need if they do.
If other countries’ experiences are an indication, most people who contract the virus will need simple, supportive primary care and to stay isolated to prevent further spread. But it’s important that those who become acutely ill can seek the more advanced care they need.
Our response must ensure that every person in this country can get recommended evaluation, diagnosis, and treatment for coronavirus for free. Congress should dedicate sufficient funding to reimburse health care providers and hospitals for uncompensated care relating to coronavirus. This fund should also be large enough to cover the costs of government mandated quarantines or isolation for patients who cannot afford any bills that it may generate. Congress should also require that insurers fully cover all recommended care for coronavirus, including appropriate evaluation, diagnostic testing, and treatment.
What does my plan mean for you? It means that you could get all recommended medical advice and care for coronavirus for free—regardless of whether you have hit your deductible, whether you’re on Medicare or Medicaid, or have no insurance at all.
Ensuring Hospital and Health System Capacity. Because of the way coronavirus spreads, many more people will be exposed to it than we saw with Zika or Ebola. That means our health system will see a surge in demand for basic primary care and diagnostic screenings in the midst of an already brutal flu season that has stretched hospitals’ capacity. To address the likely increase in people seeking medical evaluation and treatment for coronavirus, Congress should provide a temporary surge in funding for Federally Qualified Health Centers, Community Health Centers, Rural Health Clinics, and safety-net hospitals to increase their capacity.
Ensuring Access to Vaccines and Other Medical Countermeasures. We must increase federal investment in developing a coronavirus vaccine and ensure that every person who needs the vaccine can get it at no personal cost. As we did during the outbreak of H1N1 (the “swine flu”), the government should guarantee that it will purchase a bulk quantity of the eventual vaccine for coronavirus. This will create an incentive for the private sector to develop it quickly and ensure manufacturers of sufficient demand.
We must also ensure—either under existing laws or through new congressional action—that health insurance companies and federal health programs cover any recommended coronavirus vaccine with no cost sharing, similar to the H1N1 vaccines from 2009. The government can also distribute the vaccines to vulnerable populations and provide them for free to the uninsured. In the event that a private sector manufacturer wants to charge an outrageous price for the vaccine once it is developed, the government should contract for its manufacture or invoke compulsory licensing as I have called for in other drug pricing contexts, and as the government threatened to do during the 2001 anthrax scare.
Together, these actions will ensure that every American can get the vital medical advice and care they need for coronavirus for free. That is not only the moral thing to do, it limits the spread of the disease and keeps us all safer.
MY UPDATED PLAN TO ADDRESS THE CORONAVIRUS CRISIS
The actions taken by the Trump administration fall far short of the big public health and economic measures we need to manage the coronavirus. Add your name if you agree that we need to treat this like the emergency it is.
This plan was originally released during Senator Elizabeth Warren’s presidential campaign.
In just the ten days since I released my plan to address the public health and economic effects of coronavirus, the situation has gotten worse. More Americans are dying, more Americans are getting sick, and more Americans are seeing their lives turned upside down by quarantines and cancellations. I am deeply concerned about the threat that coronavirus poses to the health of our people and our economy.
New data from here and abroad suggest that the virus could easily overwhelm our health care system. The Trump Administration continues to badly mishandle the outbreak, raising the risks of the virus spreading more widely in the United States and reaching more vulnerable populations. The Administration’s proposed approach to the economic impacts of coronavirus is inadequate and misguided. And a recent shock in oil prices has compounded the economic turmoil and threatened our financial system.
The moment calls for a clear-eyed, data-driven assessment of the problems we face, and a comprehensive plan that matches the scale of those problems. My updated plan presents the latest data and builds on my existing recommendations to offer a comprehensive approach for protecting Americans and our economy.
This crisis also serves as a reminder that the decisions public officials make when times are good have a profound impact on our preparedness when things go bad. The Trump Administration has cut funding for public health agencies, appointed regulators who have rolled back the rules on big banks, put unqualified officials in charge of our response to coronavirus, and put politics and spin ahead of good science. This experience should serve as a reminder to any future Administration—Republican or Democratic—to appoint high-ranking public officials who don’t just say the right things, but who have demonstrated history of actually serving the public interest.
THE SCOPE OF THE CRISIS
The latest models project that between 40% and 70% of the world’s population will be infected with coronavirus. Based on what we know about mortality rates, the virus is likely to kill tens of thousands of people worldwide—and perhaps as many as ten million. It is also possible that the outbreak will last well into 2021.
The virus threatens to overwhelm the health care system in the United States. The best available data are from northern Italy. While the average mortality rate is not overwhelming, the rates of people requiring hospitalization or time in intensive care are very high—and Italy has higher ratios of doctors and hospitals beds per capita than the United States. We should prepare for a surge of Americans requiring serious health care treatment that far outstrips our current capacity.
At this point, it is critical to prioritize identification of people who already have the virus so that we can slow its further spread and increase the capacity of our health care system to deal with the coming influx of patients. The Trump Administration is failing spectacularly at these goals:
America is far behind many other countries in testing people with symptoms for coronavirus. The CDC stopped updating coronavirus testing numbers last week and now is only including people tested at CDC's lab, while Trump is actively contradicting facts from the CDC, WHO, and other leading public health officials in an attempt to minimize the risks of coronavirus.
The White House has suppressed guidance from public health officials instructing seniors, who are at disproportionate risk of serious acute infection, not to fly. While this move may help avoid some temporary economic harm, it increases the likelihood that the virus will spread to vulnerable populations and cause significantly more damage over time.
While the addition of $8 billion in funding for response is essential, it cannot cover the care for uninsured or underinsured patients or providing hospitals with the additional capacity they will require.
The scope of the economic crisis is growing too. Experts now project that a recession is likely. A wave of highly leveraged companies may fall into default as consumers cut back on spending. The financial system is under more strain than at any point since the 2008 crisis—exacerbated by the Trump Administration’s systematic deregulation of big banks over the last four years.
The Trump Administration’s proposed economic response is not up to the task. The core of their approach is a payroll tax cut. Under the circumstances we face, focusing our response on a payroll tax cut is flawed for several reasons:
It provides no help for workers who lose their jobs because of a coronavirus-related economic contraction.
It provides little help for waitresses, cab drivers, or small business owners who experience a significant drop in their incomes, even if they remain employed.
It provides far larger benefits to higher wage workers than to lower wage workers.
It creates a financial incentive for sick people to go to work to draw a paycheck.
It weakens the Social Security program.
It generates less economic growth than several alternative uses for that revenue.
We need a more aggressive approach that isn’t just the same tax cuts that Republicans propose no matter what the economic situation.
IMMEDIATE NEXT STEPS
To address our public health and economic problems, we need an assertive response to three immediate challenges:
1. Slow the spread of the virus. Given the general lack of sick leave in the US, many people will go to work even when they feel unwell. Others who feel sick may not get tested or treated because the costs are prohibitively high. Both of these factors will accelerate the spread of the virus.
My plan from last week addresses these issues by ensuring that every American, including those without insurance, can get all recommended evaluation and care for coronavirus for free. In addition, my plan calls for the creation of an emergency paid leave program financed by the government so that people can take fully paid time off to appropriately isolate, get tested or treated, or to provide care for someone who needs to be tested or treated. Employees who rely on tips should receive paid time off that reflects their full compensation, not just their base wage compensation.
In addition, the lack of widespread testing in the United States—especially in comparison to South Korea and other countries—is a disgrace. According to the CDC’s last released data, our country has tested fewer than 2,000 people in a population of over 300 million. If we hope to control this outbreak, the Administration must immediately allocate funds from the recent emergency supplemental appropriation to state and local health departments and hospitals to rapidly stand up testing capacity nationwide. Additionally, to the extent that volume constraints at the Centers for Disease Control and Prevention limit testing kit distribution or technical assistance to labs developing their own tests, it is critical to temporarily increase their capacity.
2. Rapidly increase the capacity of our health care system. Our health care system should be dramatically scaled up capacity to handle the upcoming surge in patients requiring hospitalization or time in intensive care. Hospitals may hesitate to make those investments themselves because the rise in incoming patients is only temporary.
The US faces large potential shortages in ICU capacity and in ventilators. All available and relevant manufacturing capacity should be put towards quickly producing additional ventilators. And to reduce the strain on ICUs, the CDC should direct hospitals in regions experiencing growing case counts to delay all elective or non-urgent surgeries.
Furthermore, the federal government should guarantee additional resources to hospitals and frontline health clinics across the board. First, the administration should use the National Disaster Medical System to cover uninsured people with Medicare for any recommended care for coronavirus, and it should temporarily increase the federal match rate for Medicaid. These two actions will bolster our health system when it needs extra resources and act as a stimulus to mitigate any economic shock to state budgets.
It is also essential that the federal government provide temporary regulatory flexibility, accompanied by clear guidance, that will help health care providers on the frontline adapt effectively and allow the system to handle a massive influx of patients. That’s why I am calling on President Trump to issue a Stafford Act declaration for coronavirus. This would open additional funding channels and permit appropriate regulatory flexibility. In addition, a Stafford Act declaration, combined with the current Public Health Emergency declaration, will allow HHS to enact Section 1135 waivers that remove key barriers to care. This will improve the health system’s ability to adapt by temporarily adjusting various federal rules, including elements of the Medicare and Medicaid programs and barriers to telehealth, which can and should play a key role in containing the spread of coronavirus. The initial commitment to these initiatives should be at least $50 billion.
3. Mitigate the economic harm. Coronavirus will have significant and wide-ranging effects on our economy. Consumers will cut back on spending. Some firms will face a sudden loss of revenue and may face pressure to lay off workers. Uncertainty about the length of the crisis or its ultimate impacts will slow investment. There is also a growing tail risk in which lower oil prices lead to a wave of bankruptcies in the highly leveraged shale sector, which in turn affects employment, credit conditions, and bank stability.
Conservatively, we should be planning for an economic hit that is at least the equivalent of 2% of GDP, or roughly $400 billion. But if the tail risks are realized, the potential decline in GDP could be similar in magnitude to the decline experienced in the Fall of 2008: more than 5% of GDP (at an annualized rate).
Ten days ago, I proposed a $400 billion stimulus package focused on:
Low or no-interest loans to companies of all sizes that have been negatively affected by coronavirus-related supply chain disruptions, and that will use the money to avoid layoffs and hours reductions, not to provide executive compensation, dividends, or share buybacks.
Unemployment insurance and other direct payments to households, with the exact amounts tied to unemployment levels and wage growth.
Direct aid to state and local governments that may be losing revenue because of coronavirus, in order to minimize reductions in services for residents.
Jump starting our ability to make our own active pharmaceutical ingredients and their base components by establishing a strategy to support domestic manufacturers, with the ultimate goal of requiring all federal agencies that procure or reimburse for drugs (like the DOD, VA, and Medicare) to preference drugs with American-made ingredients.
Green infrastructure investments, like domestically produced clean energy, that can be accomplished even with the supply chain disruptions that are likely to exist with a widespread coronavirus outbreak.
In addition, I proposed that the Federal Reserve Board announce that it stands ready to use its emergency lending authority to create a broad-based emergency lending facility program to help real economy companies whose supply chains have been disrupted because of the coronavirus and who will use the money to do right by their workforce.
But with the potential threat to the economy growing, further stimulus is critical:
We should increase Social Security benefit checks by $200 per month per beneficiary to provide an additional source of income to seniors and people with disabilities, who may face more serious medical concerns and disruptions in their daily activities as a result of the virus.
We should also design the changes to our unemployment insurance programs as automatic increases that kick in when certain triggers are hit, rather than as a temporary, one-time increase, because such a response is always productive in a crisis situation and we should not need to rely on Congress to act in a timely fashion each time.
And we should aim to build up our national scientific capacity, including the ability to bring vaccines to market, by committing $200 billion to vaccine development efforts over the coming years. This will require guaranteed purchases of an eventual coronavirus vaccine after the current crisis passes to ensure sufficient demand for manufacturers. A commitment of this size to basic scientific research, drug development and clinical trials, and capacity building for domestic pharmaceutical ingredient manufacturing would change the economics of vaccine development dramatically. And, as I laid out in my first pandemic preparedness plan, a portion of this investment should be directed to the Coalition for Epidemic Preparedness Innovations, a global alliance focused on vaccine development, including a universal flu vaccine.
Ultimately, the total package I am proposing is roughly $750 billion, along with an open-ended commitment to provide emergency paid leave as needed. With the federal government able to borrow essentially for free, we should take swift and decisive action now to provide the benefits people need to limit the spread of the virus and mitigate harm to our economy. And many of these investments will have positive long-term effects too.
PERSONNEL IS POLICY
I’ve often said that personnel is policy. We’re seeing proof of that again now.
Despite claiming to want to “drain the swamp,” Donald Trump has put former finance executives in charge of his economic policy. His Treasury Secretary, his first Director of the National Economic Council, the Chairman of the Federal Reserve Board, the Vice Chairman of the Federal Reserve Board for Supervision, the Comptroller of the Currency are all former finance executives.
And in office, this group of former finance executives has relentlessly pushed for policies that have been great for banks but bad for working families and the health of our financial system: a massive corporate tax cut that provided billions in benefits to the financial industry, and steady deregulation that has allowed banks to profit more even as it weakens the guardrails we created after the 2008 financial crisis.
Take one example: Trump-era regulators let financial firms know that they didn’t really have to follow guidance issued during the Obama Administration that limited lending to highly leveraged companies. The economic effects of coronavirus are now threatening those highly leveraged companies and pushing them towards default, which could ripple throughout the financial system. In instance after instance, Trump-era deregulation by former finance executives has made our financial system and economy less resilient and capable of absorbing the kind of shocks we are seeing today.
This is not the first time that an Administration—Republican or Democratic—has loaded former finance executives into key economic positions, only to see them deliver for the finance industry at the expense of working families. Let’s hope it’s the last time. We owe it to the American economy—and the American people—to do better.
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