The GOP’s Big Bet on a Quick Coronavirus Recovery

Plus, your Tuesday news roundup  [The Fisc](   By Yuval Rosenberg and Michael Rainey 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.” Send your tips and feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( for their own copy of this newsletter. News - [Following Messy Start, Enormous Paycheck Protection Program Shows Signs of Buttressing Economy]( – Washington Post - [Pandemic Drives Broadest Economic Collapse in 150 Years: World Bank]( – AFP - [14 States and Puerto Rico Hit Highest Seven-Day Average of New Coronavirus Infections]( – Washington Post - [Biden, Democrats Seek to Shut Down Calls to Defund Police]( – The Hill - [Biden Says Federal Aid to Police Should Be Based on Meeting "Basic Standards of Decency"]( – CBS News - [Biden Says Trump Squandered Economic Expansion Begun With Obama]( – Bloomberg - [Republicans Urge Trump to Reject Slashing US Troop Presence in Germany]( – The Hill - [California Bets on Trump’s Help With $54 Billion Budget Gap]( – Bloomberg - [Senate Investigation Criticizes the IRS for Failing to Oversee Free Filing Program]( – ProPublica - [Testing Nursing Home Workers Can Help Stop Coronavirus. But Who Should Pay?]( – New York Times - [Price Limits Will Scare Off Covid Vaccine Makers, Fauci Warns]( – Bloomberg - [AstraZeneca Wins Fresh U.S. Funding in Race for COVID-19 Treatment]( – Reuters - [Can a Vaccine for Covid-19 Be Developed in Record Time?]( – New York Times - [Insurance Telemarketers Fined $225M for a Billion Robocalls]( – Associated Press - [Rethinking the Hospital for the Next Pandemic]( – Wall Street Journal - [When Health Care Moves Online, Many Patients Are Left Behind]( – Wired - [When a Doctor No Longer Accepts Medicare, Patients Left Holding the Bag]( – Kaiser Health News Views and Analysis - [Trump Is Running on the Economy Without a Plan to Rebuild It]( – Catherine Rampell, Washington Post - [Don’t Cut Off Unemployment Benefits Now]( – Alan S. Blinder, Wall Street Journal - [Learn to Love Trillion-Dollar Deficits]( – Stephanie Kelton, New York Times - [Which Economic Stimulus Works?]( – Joseph E. Stiglitz and Hamid Rashid, Project Syndicate - [Will the Jobs Report Destroy Jobs?]( – Paul Krugman, New York Times - [Jobs Surprise Complicates Picture for the Fed]( – Mohamed A. El-Erian, Bloomberg - [A Crash in the Dollar Is Coming]( – Stephen Roach, Bloomberg - [Ben Bernanke Sees a Big If on the Path to Recovery]( – Noah Smith, Bloomberg - [Trump’s $35 Insulin Plan: A Nickel Solution to a Billion-Dollar Problem]( – Max Richtman, Morning Consult - [Telehealth May Finally Shift Health Care to Be Patient-Centered]( – Dr. Li Tso, The Hill - [Could Trump Turn a Vaccine Into a Campaign Stunt?]( – Ezekiel J. Emanuel and Paul A. Offit, New York Times - [Withdrawing 9,500 Troops From Germany Will Be Costly for U.S.]( – Mira Rapp-Hooper, Washington Post - [The State Department Is the Wrong Place to Coordinate the Pandemic Response]( – Brian Atwood and Andrew Natsios, Politico Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, [thefiscaltimes.com]( or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](