Conservatives Say It’s Time to Stop Spending on Coronavirus Relief

"Insufficiently bold congressional policy responses to the Great Recession unnecessarily prolonged suffering and stunted economic growth. Congress should not make this mistake again. … Congress should address this risk, and the already occurring economic damage, by passing, as soon as possible, a multifaceted relief bill of a magnitude commensurate with the challenges our economy faces."

"[T]he levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery. Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely."

– Federal Reserve Chair Jerome Powell, in semiannual testimony before Congress on Tuesday. Powell also said that the pandemic-driven downturn could widen economic inequality. "The burden of the downturn has not fallen equally on all Americans," he said. "Instead, those least able to withstand the downturn have been affected most."

Coronavirus Spending Will Add $2.4 Trillion to Deficit: CBO
The four pieces of legislation Congress passed in March and April to provide relief and stimulus during the coronavirus pandemic will add about $2.4 trillion to the deficit, the Congressional Budget Office said Tuesday.

The CARES Act — which provided $1,200 relief checks for many adults, enhanced unemployment benefits of $600 a week and billions in forgivable loans for small businesses, among other things — accounts for most of the deficit spending, roughly $1.7 trillion. The recent extension of the small business loan program will add another $483 billion, CBO said.

Two earlier bills, which focused on assisting health care providers and funding the medical response and further research, will increase the deficit by about $200 billion.

Paycheck Protection Program Saved 16 Million Jobs: Moody’s
The Paycheck Protection Program of loans to small businesses has safeguarded about 16 million jobs, or about 10% of the pre-pandemic U.S. labor force, according to a new analysis by Moody’s Analytics.

Moody’s Analytics economist Bernard Yaros says the program, which has seen more than $500 billion in forgivable loans approved to more than 4.5 million businesses, likely fueled the surprising gains seen in the government’s May labor market report, potentially contributing between 9.2 million and 10.9 million jobs. And the PPP gains could continue this month.

"A couple of million more jobs could show up in the June employment report thanks to residual PPP-induced rehiring," Yaros said in a statement. "However, as small businesses that were the first to receive their loans in the first half of April exhaust their PPP funds by mid-June, as many as 4.5 million jobs that were rehired thanks to PPP could be at risk of layoffs."

Trump Signs Executive Order on Police Reform, Calls for More Funding
President Trump signed an executive order Tuesday to encourage changes in policing nationwide, including a ban on chokeholds except when an officer’s life is at risk. The order would also create a national database of excessive force complaints, and it seeks to use the allocation of federal grant money to drive police departments to meet certain credentialing standards regarding use-of-force and de-escalation. Trump lauded law enforcement at the signing event and rejected calls to "defund" the police. "In many cases local law enforcement is underfunded, understaffed and undersupported," he said.

Trump’s order "will have little immediate impact," The New York Times reports, "and does not address calls from activists and protesters nationwide for broader action and a new focus on racism."

National Health Spending Plunged 24% in April Compared With 2019
As the coronavirus pandemic spread and much normal activity was halted, national health spending in April fell by 24.3% compared to the previous April, according to an analysis by consulting firm Altarum. Health spending in April was $2.88 trillion (seasonally adjusted annual rate), down from $3.57 trillion in March and $3.8 trillion in April 2019.

"While March 2020 exhibited the only previous occurrence in our historical time series (which goes back to 1989) of a monthly decline from the previous year, the April reading dwarfs the March value," the report says.

Spending on hospitals and doctors fell by more than 40%, reaching the lowest monthly levels in more than a decade. Spending on dental services, meanwhile, fell by more than 60% year over year.

The only health care areas to see increased spending were nursing home care and prescription drugs, which rose 6.3% and 5.1%, respectively. Altarum’s analysts say that, with the economy starting to reopen in May, they expect to see the declines in spending reverse.

HHS Sent $50 Billion to Health Care Companies Accused of Fraud: Report
The Department of Health and Human Services gave more than $50 billion in loans and grants to health care companies accused of bilking taxpayers by inflating Medicare or Medicaid expenses, Bloomberg News reports:

The $2,315 Coronavirus Test
In April, an otherwise ordinary medical test facility outside of Dallas, Texas, was charging unusually high prices for coronavirus tests, with some patients receiving bills of $2,315 for a single procedure. Many major labs charge about $100 for the same analysis.

While the lab has since said that the pricing — which was applied to more than 100 tests, with 23 of those being paid in full — was the result of "human error" and dropped its standard fee to a still-high $500, Sarah Kliff of The New York Times says that such shockingly high charges are not unusual in the U.S. due to one simple factor: the lack of government regulation in health care pricing.

That lack of regulation produces two outcomes that crop up again and again in the health care system, Kliff says. The first is that prices tend to be much higher for all kinds of procedures in the U.S. than in other wealthy countries. The second is that there is massive variation in prices between providers. (Kliff cites one study that found prices in California for a basic appendectomy ranging from $1,529 to $182,955.)

Currently, the data show considerable variation in prices for coronavirus tests — though it’s hard to be sure how much is actually being paid, since much of the payment information is private. What is clear is that all of the tests are basically the same, even though some individuals and insurers are paying much more than others. "There is little evidence that higher prices correlate with better care," Kliff says. "What’s different about the more expensive providers is that they’ve set higher prices for their services."

Poll of the Day: Americans Unhappier Than They’ve Been in Decades
Americans are unhappier than they have been in almost 50 years, according to a new report from the National Opinion Research Center (NORC) at the University of Chicago.

Using public opinion data from the General Social Survey, the report finds that only 14% of American adults describe themselves as being very happy, an all-time low for the survey since the question was first asked in 1972. (The number of Americans who say they are "pretty happy," the orange line in the chart below, has taken a sharp turn higher.)

At the same time, an all-time high of 80% report that they are satisfied with their family’s financial situation. Yet optimism for the future also reached a decades-long low, with 43% of Americans believing that the children will grow up to enjoy a better standard of living than they do, down sharply from 57% in 2018.

Interviews for the study were conducted in May. The survey was completed by 2,279 adults and has a margin of error of 2.9 percentage points.

• Fed’s Powell Urges Congress to Spend on Unemployed in Pandemic – Roll Call
• Powell's Warning on Pandemic Clashes With Trump's Upbeat Tweets – Politico
  
• Congress Set for Fight Over Expiring Unemployment Relief – The Hill
• Members of Congress Took Small-Business Loans — and the Full Extent Is Unknown – Politico
• Pence Misleadingly Blames Coronavirus Spikes on Rise in Testing – New York Times
• Coronavirus Recommendations Ignored as Case Numbers Rise – Washington Post
• Scientists Hail Dexamethasone as ‘Major Breakthrough’ in Treating Coronavirus – CNBC
  
• U.S. Health Insurers May Balk at Paying for Coronavirus Antibody Testing – Reuters
• Bipartisan Senators Call for Making Telehealth Expansion Permanent Post-Coronavirus – The Hill
• Blue Shield of California Tries to Fix ‘Dysfunctional’ Health System – Bloomberg
• Trump Calls Private School Vouchers Biggest Civil Rights Issue – Bloomberg
• With Tax Deadline Looming, IRS Faces Backlog as It Transitions Out of COVID-19 Crisis – NPR
• IRS Says Stimulus Checks Belong to Residents, Not Nursing Homes – The Hill

• There Isn’t a Coronavirus ‘Second Wave’ – Mike Pence, Wall Street Journal
• What a Successful Economic Recovery Plan Must Look Like – Jason Furman, Timothy Geithner, Glenn Hubbard and Melissa S. Kearney, Washington Post
• It Didn’t Have to Be Like This – Adam Serwer, Atlantic
• For Once, Give Congress Some Credit – Bloomberg Editorial Board
• What Has the Trump Administration Done With a Half-Trillion Dollars? – Catherine Rampell, Washington Post
• The Tax Rule That Inspired Billionaires and Movie Stars to Back Climate Moonshots – Ben Steverman, Bloomberg
• Don’t Just Save the Postal Service. Reinvent It – Jason Linkins, New Republic
• Why the Pandemic Has Energized Hospital Unions – Stephanie Goldberg, Modern Healthcare
• We Must Let Competition Flourish for the Sake of Both Drug Innovation and Affordability – Matthew Lane, Morning Consult