[Joint House and Senate Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 116-393
THE ECONOMIC IMPACT OF AMERICA'S FAILURE TO CONTAIN THE CORONAVIRUS
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VIRTUAL HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 22, 2020
__________
Printed for the use of the Joint Economic Committee
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
42-188 WASHINGTON : 2021
JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
SENATE HOUSE OF REPRESENTATIVES
Mike Lee, Utah, Chairman Donald Beyer Jr., Virginia, Vice
Tom Cotton, Arkansas Chair
Rob Portman, Ohio Carolyn Maloney, New York
Bill Cassidy, M.D., Louisiana Denny Heck, Washington
Ted Cruz, Texas David Trone, Maryland
Kelly Loeffler, Georgia Joyce Beatty, Ohio
Martin Heinrich, New Mexico Lois Frankel, Florida
Amy Klobuchar, Minnesota David Schweikert, Arizona
Gary C. Peters, Michigan Darin LaHood, Illinois
Margaret Wood Hassan, New Hampshire Kenny Marchant, Texas
Jaime Herrera Beutler, Washington
Vanessa Brown Calder, Executive Director
Harry Gural, Democratic Staff Director
C O N T E N T S
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Opening Statements of Members
Hon. Donald Beyer Jr., Vice Chair, a U.S. Representative from
Virginia....................................................... 1
Hon. Mike Lee, Chairman, a U.S. Senator from Utah................ 3
Witnesses
Dr. Ashish Jha, M.D., M.P.H., Dean, Brown University School of
Public Health, Providence, RI.................................. 6
Dr. Austan D. Goolsbee, Robert P. Gwinn Professor, University of
Chicago, Booth School of Business, Chicago, IL................. 8
Dr. Jeffrey A. Singer, M.D., F.A.C.S., Senior Fellow, CATO
Institute, Washington, DC...................................... 10
Dr. Adam Michel, Senior Policy Analyst, Grover M. Hermann Center
for the Federal Budget, The Heritage Foundation, Washington, DC 12
Submissions for the Record
Prepared statement of Hon. Donald Beyer Jr., Vice Chair, a U.S.
Representative from Virginia................................... 38
Prepared statement of Hon. Mike Lee, Chairman, a U.S. Senator
from Utah...................................................... 39
Prepared statement of Dr. Ashish Jha, M.D., M.P.H., Dean, Brown
University School of Public Health, Providence, RI............. 41
Prepared statement of Dr. Austan D. Goolsbee, Robert P. Gwinn
Professor, University of Chicago, Booth School of Business,
Chicago, IL.................................................... 50
Prepared statement of Dr. Jeffrey A. Singer, M.D., F.A.C.S.,
Senior Fellow, CATO Institute, Washington, DC.................. 52
Prepared statement of Dr. Adam Michel, Senior Policy Analyst,
Grover M. Hermann Center for the Federal Budget, The Heritage
Foundation, Washington, DC..................................... 59
THE ECONOMIC IMPACT OF AMERICA'S FAILURE TO CONTAIN THE CORONAVIRUS
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TUESDAY, SEPTEMBER 22, 2020
United States Congress,
Joint Economic Committee,
Washington, DC.
The WebEx virtual hearing was convened, pursuant to notice,
at 2:30 p.m., in Room G-01, Dirksen Senate Office Building,
Hon. Donald S. Beyer Jr., Vice Chair, presiding.
Representatives present: Beyer, Frankel, Herrera Beutler,
Schweikert, Beatty, and Trone.
Senators present: Lee, Klobuchar, Cassidy, Hassan, and
Peters.
Staff present: Robert Bellafiore, Vanessa Brown Calder,
Barry Dexter, Harry Gural, Colleen J. Healy, Christina King,
Nita Somasundaram, Kyle Treasure, Jackie Varas, and Emily Volk.
OPENING STATEMENT OF HON. DONALD BEYER JR., VICE CHAIR, A U.S.
REPRESENTATIVE FROM VIRGINIA
Vice Chairman Beyer. Today's hearing will be unlike almost
every hearing held by the U.S. Congress Joint Economic
Committee, because most often our hearings simply explore
economic issues. Today, we are going to focus on public health.
When the explosion of coronavirus cases in March caused
massive unemployment in April, JEC Democrats reached out to
some of the most prominent economists and public health experts
in the country.
Two Nobel Prize Laureates, two winners of the John Bates
Clark Medal, five former Chairs of the President's Council of
Economic Advisers, and three former Presidents of the National
Economic Association--over two dozen in all. And every one of
them conveyed the same urgent message: The top priority for
healing our crippled economy is to contain the coronavirus.
Economist Austan Goolsbee, here with us today, has put it
this way, quote: ``The number one rule of virus economics is
that you have to stop the virus before you can do anything
about the economics.''
And yet, tragically, we have failed to control the virus.
Two hundred thousand Americans are dead--more than we lost in
World War I, the Korean War, and Vietnam combined. The United
States has only 4 percent of the world's population, but
approximately 21 percent of the worldwide deaths.
There have been 7 million confirmed cases of COVID-19 in
the United States--and this is likely a severe undercount. And
the number of cases continues to explode, with about 40,000 new
positive tests a day.
As a result of this crisis, the economy has suffered a
severe blow. There are nearly 12 million fewer jobs today than
we had in February. The official unemployment rate is 8.4
percent--almost two-and-a-half times what it was in February.
Federal Reserve Chairman Jerome Powell says that the actual
rate could actually be 3 percent higher due to problems with
misclassifying workers and differentiating those who have left
the labor force from the unemployed. Three point four million
U.S. workers are now permanently unemployed, and that number
continues to rise. Almost 30 million depend on an unemployment
check to survive. Two hundred thousand deaths, economic
devastation, a contagion still out of control
Tragically, no one person in our country is more
responsible than the person who should be leading the fight to
contain the coronavirus--The President of the United States.
President Trump's record on the coronavirus is a stunning
mix of incompetence, ignorance, and callous disregard for human
life. He lied to Americans and told them the virus was a
``Democratic hoax,'' and that it would ``magically disappear.''
At the same time, he privately admitted to Bob Woodward that
the coronavirus was five times as deadly as serious strains of
the flu--quote/unquote, ``deadly stuff.''
The President should have used the early weeks of the
crisis to test for and trace the virus, purchase PPE and
ventilators, and to educate the public about the steps all
Americans should take to protect themselves and others.
However, it took more than seven weeks after the first
confirmed case in the United States for him to declare a
national emergency. If America had moved a week or two sooner
to implement social distancing measures, it could have and
would have saved tens of thousands of lives, according to
research by Columbia University.
The President ignored the advice of public health experts.
He said that he knew more about public health than they did. He
mocked people who wore masks. He refused to wear one, despite
the fact that masks can play an important role in slowing the
spread of the virus.
He endangered people's lives by promoting the use of
hydroxychloroquine, which has been shown by scientists to have
no impact on treating COVID and carries substantial risks.
He recommended injecting disinfectant to fight the virus,
and sadly some Americans actually did. He claimed that children
are, quote, ``almost immune.''
In every case, the President was wrong--dead wrong.
Public health officials argued that reopening prematurely
would lead to a second wave of infections and deaths. But the
President ignored them. He said in March that, quote, ``we
cannot let the cure be worse than the problem itself.''
He goaded governors to reopen the economy. He told
Americans that public health measures were tyranny. He said to,
quote, ``Liberate Michigan'' while supporters demonstrated--
with guns--at state capitals. And he held large political
rallies defying experts who warned that these could become
super-spreading events. And as a result of these reckless and
callous actions, coronavirus cases spiked and people died.
The number of new infections on Labor Day were double what
they were on Memorial Day, 40,000 new cases per day.
The President's insistence on prematurely reopening the
economy had a self-serving purpose--to make the economy look
stronger in the months leading to Election Day.
As Washington Post columnist Catherine Rampell pointed out
back in April, it was a big gamble--a gamble with American
lives. A gamble with the U.S. economy. The gamble already has
resulted in more cases and more deaths, but in the short term
it made the economy look better.
Between May and August, the economy regained about half of
the jobs lost. The unemployment rate dropped from almost 15
percent to 8.4 percent--still about 2.5 times higher than the
February rate. And the President is betting that the next jobs
numbers, when they are released next Friday, will continue to
show marginal improvement. And that the cost of reopening too
soon will not be obvious until after the election.
While we do not know what the numbers will reveal, one
thing is certain: The true impact of the President's gamble
will not be evident until it is too late.
Donald Trump holds the vast power of the U.S. Presidency--
but he has refused to use it. He has not contained the
coronavirus, but has unleashed it. As a result, many more lives
will be lost. And in the long term, the economy will suffer.
The President's failure to make even the most meager effort
to contain the coronavirus is his economic legacy.
I look forward to the testimony of our witnesses, and I
recognize the Chairman of the Full Committee, Senator Mike Lee,
for his comments.
[The prepared statement of Vice Chair Beyer appears in the
Submissions for the Record on page 38.]
OPENING STATEMENT OF HON. MIKE LEE, CHAIRMAN, A U.S. SENATOR
FROM UTAH
Chairman Lee. Thank you so much, Mr. Vice Chairman, for
today's hearing on this really important topic.
The novel coronavirus, as it has swept across the Nation
and worked its way around the world this year, has left a
veritable trail of devastation in its path. It has imposed not
only serious physical disease, but it has also imposed severe
economic ills as well. Jobs have been lost. Businesses have
been shuttered. And entire sectors of industry have been
disrupted.
In response to these unprecedented issues brought on by
this fairly unique crisis, we have taken unprecedented
government action. But as in the successful treatment of any
illness, we have to make sure that we are using the proper
remedies, and that we first do no harm.
So as we take stock of our current response to this
pandemic, we need to consider how policy has both hurt and
helped so far, and what we can do to improve. What might be the
right solutions moving forward? Both for this public health
crisis that we're dealing with right now, and for whatever
might come next, whatever might fly in our path in the future.
While some have called for still more aggressive Federal
responses for more stimulus, a nationally coordinated response
led by the Administration, and more widespread lockdowns, the
benefits of policies like those have to be weighed against the
cost that they impose on society, economically and otherwise.
There are a whole host of possible unintended and, in many
cases, unpleasant consequences. For instance, we know that
large-scale stimulus can have a tendency to exacerbate our
already whopping national debt, and can have a tendency to
crowd out private investment.
Officially, the enhanced unemployment benefits included in
the CARES Act provided a disincentive for those who are
unemployed to return to work, thus inhibiting economic
recovery.
In addition to economic devastations, lockdowns have had
other negative effects by their very nature. Mandated isolation
has either spurred, or in some cases worsened, mental health
issues for a lot of people. And it has stopped countless others
from getting routine health screenings and vaccinations,
prohibited or discouraged others from maintaining their health
in other ways, and in these respects it has, in and of itself,
caused death or illness that might not otherwise have happened,
that might otherwise have been prevented.
In fact, as the second wave of the coronavirus has been
rebounding across Europe, the continents' governments are now
intent on avoiding any large-scale lockdowns and instead are
focusing on more tailored, more localized measures to combat
outbreaks as they happen based on the knowledge they have from
day to day on how best to manage infections.
Finally, we ought to make sure that the Federal policy,
that any Federal policy adopted in Washington is certainly not
inhibiting sound and effective solutions. Unfortunately,
evidence shows that it already has, especially in the early
days of this particular crisis.
For instance, outdated Certificate of Need rules prevented
hospitals from acquiring new beds and equipment. And the FDA
and CDC rules against at-home testing posed an early barrier to
disease control. But perhaps the worst failure of all was
something that involved the sheer bureaucratic chaos that
fatefully delayed effective testing for an entire month.
Now thankfully we have already removed some of these
barriers, some of these regulations that were stopping us from
making the progress we otherwise needed to make. Two important
changes have been allowing doctors to practice medicine across
state lines, as well as allowing doctors to provide care
through the use of telemedicine technology.
This is exactly the kind of regulatory flexibility that we
should consider moving forward so that we can quite quickly and
freely administer to those whose needs require it, regardless
of where the provider might be, and regardless of where the
patient might be.
As we continue to respond to the coronavirus, I think we
need to acknowledge the ways that sweeping, centralized, one-
size-fits-all Federal policies can ultimately worsen our
attempts at recovery, if we are to have flexibility and
resiliency of the sort that we need in the face of this crisis
and when faced with whatever might come our way in the future,
we ought to really, instead, empower our states and localities,
which best understand how their own resources, their own needs,
and their own communities can be addressed and devoted.
The American people have always played a critical role in
governing locally, volunteering and innovating to respond
especially in times of crisis.
I look forward to hearing our panelists' contributions
today as to how best we can continue doing just that. Thank
you.
[The prepared statement of Chairman Lee appears in the
Submissions for the Record on page 39.]
Vice Chairman Beyer. Mr. Chairman, thank you very much. I
really appreciate it.
Now I would like to introduce our four distinguished
witnesses. First we have Dr. Ashish Jha, who is the Dean of the
Brown University School of Public Health. And since I am the
father of one Brown graduate, and about to have a Brown son-in-
law, it is wonderful to have you here. He is a recognized
expert on pandemic preparedness, has been at the forefront of
providing analysis of the COVID-19 response. Previously, Dr.
Jha was a faculty member at the Harvard T.H. Chan School of
Public Health at Harvard Medical School. He directed the
Harvard Global Health Institute from 2014 to the fall of 2020.
He is a practicing physician and earned his M.D. and M.P.H.
degrees at Harvard; and has a B.A. in Economics from Columbia
University.
Next will be Dr. Austan Goolsbee, who is the Robert P.
Gwinn Professor of Economics at the University of Chicago Booth
School of Business. Dr. Goolsbee served as Chairman of the
Council of Economic Advisers from 2010 to 2011; as the Chairman
of the Council of Economic Affairs Advisers member from 2009 to
2010. Since 2012 he has been a member of the Economic Advisory
Panel to the Federal Reserve Bank of New York. In addition to
his teaching and research, Dr. Goolsbee writes regularly on
economic issues for national News outlets. He earned his Ph.D.
in Economics from Massachusetts Institute of Technology, as
well as an M.A. and B.A. in Economics from Yale University.
Next we will have Dr. Jeffrey Singer, who is a Senior
Fellow at the Cato Institute where he works in the Department
of Health Policy Studies. A general surgeon with more than 35
years of experience, Dr. Singer is the principal founder of the
largest and oldest group private surgical practice in Arizona.
In addition, he is a Visiting Fellow at the Goldwater
Institute, and a member of the Board of Scientific Advisors of
the American Council on Science and Health. Dr. Singer received
his B.A. from Brooklyn College, CUNY, and his M.D. from New
York Medical College.
And finally, we will hear from Dr. Adam Michel, who is a
Senior Policy Analyst at the Grover M. Hermann Center for the
Federal Budget at the Heritage Foundation. His research focuses
on how taxes impact the well-being and opportunity of
Americans. Dr. Michel is published and quoted widely by
national news outlets, and appears regularly on broadcast
television to provide his perspective on taxes and economic
issues. Previously, Dr. Michel was the Program Manager for the
Spending and Budget Initiative at the Mercatus Center at George
Mason University. He received his Ph.D. in Economics from
George Mason University, and a B.A. in Politics from Whitman
College.
With that, I turn the floor over to Dr. Jha for your
opening comments.
Dr. Jha.
STATEMENT OF DR. ASHISH K. JHA, M.D., M.P.H., DEAN, BROWN
UNIVERSITY SCHOOL OF PUBLIC HEALTH, PROVIDENCE, RI
Dr. Jha. Great. Thank you, Chairman Lee and Vice Chairman
Beyer, members of the Committee. As Vice Chairman Beyer said,
my name is Ashish Jha. I am a practicing physician and a public
health professor at Brown University, and it is my honor to be
here today.
Earlier today, the Hopkins COVID Dashboard reported that
more than 200,000 Americans have died from COVID-19. This is a
tragedy of immense magnitude. And we have to ask ourselves how
did we get here? How did we become the world's epicenter, the
nation with the most cases, the most suffering, the most
deaths?
When we take a look--when we take a step back and look at
disease outbreaks, there are two major sets of strategies that
any nation should pursue. Public health measures that control
the virus and slow the spread; and biomedical measures that
mitigate against the worst effects when people become infected.
Fundamentally, we find ourselves where we are because we
failed to effectively put in place public health measures that
we know can control the virus. And it did not need to be this
way. So let us talk about the three key public health measures
that are so critical to controlling this virus:
The first is testing, tracing, isolation. This strategy,
where infected people are identified and isolated is an old and
well-tried approach to disease outbreaks. Yet, in our Nation we
failed to set up a testing infrastructure through much of
January and February, having only rudimentary testing through
March and April. Even now, we cannot perform nearly the number
of tests our Nation needs.
The result was that for much of the early months of the
outbreak, our Nation was blind to the spread of the disease,
finding ourselves in March with large outbreaks in several
parts of the Nation. And because we had little testing
capacity, we were forced into a painful national shutdown where
good testing would have allowed us to be far more selective and
measured.
Which gets us to the second leg of the three-legged stool
of virus control: social distancing. The most extreme version
of which is lockdowns. When we locked down, we did so unevenly.
And while the lockdown slowed the spread in some areas of the
country, other regions remained largely open and the virus
spread. And when we opened up the Nation more fully after
Memorial Day, we did so with little regard to social
distancing, causing large spikes and deaths over the summer.
And finally, the third leg of the stool is wearing masks.
By the end of March, the data on masks was pretty clear. And in
early April, the CDC recommended widespread mask wearing. Yet,
even today 17 states do not have a mandatory mask order, and
mask wearing across our Nation is highly variable.
The failure to effectively and fully implement these public
health measures has meant that we have more cases and more
deaths than any nation in the world. And the economic costs of
failing to control the virus are large, as well. Large declines
in economic activity and employment, and loss of business.
So are these economic losses the costs of controlling the
virus? Actually, quite the opposite. When we look across the
world, we find that nations that did a better job of
controlling the virus have largely suffered far less in the way
of economic losses. And I want to highlight three nations.
South Korea has largely relied on testing and tracing,
building up an infrastructure early. And as a result, they have
had fewer than 400 deaths. That is less than California had
last week.
Japan relied on contact tracing and mask wearing, and not
as much on testing. And less than 1,500 Japanese have died.
And Germany has had a mix of testing, and mask wearing, and
clear communication about social distancing, and their death
rate is 80 percent less than ours.
So have these countries sacrificed their economies to
control the virus? In fact, when you look at the countries with
the smallest declines in GDP, they include Taiwan, another
standout on virus control, and south Korea. And while Germany
and Japan have suffered large economic declines, their
unemployment rates are less than half of ours.
Most high-income countries, not all, but most have managed
to both save lives and jobs. We have struggled in both areas.
Ultimately as we look ahead, we need to focus on a path that
allows us to save lives and livelihoods.
The best way to do that is to use a public health approach
to restoring our economy. And while I have my own views on how
best to do this, the very best guide today was published by
this White House in April of this year. In a document entitled
``Opening Up America Again,'' it laid out a clear public health
approach, and a set of metrics and guidelines that our Nation
unfortunately ignored.
I believe we can and need to ensure we have a robust
economic recovery, because that is what American people want,
but not at the cost of losing their lives. Thankfully, all the
evidence says that we do not have to choose. If we commit to
controlling the virus, we can build the confidence and
conditions necessary to helping America economically thrive
again.
Thank you, very much.
[The prepared statement of Dr. Ashish K. Jha appears in the
Submissions for the Record on page 41.]
Vice Chairman Beyer. Dr. Jha, thank you very much. We
greatly appreciate it.
I would like to now introduce Dr. Austan Goolsbee for his
five minutes.
STATEMENT OF DR. AUSTAN D. GOOLSBEE, ROBERT P. GWINN PROFESSOR,
UNIVERSITY OF CHICAGO, BOOTH SCHOOL OF BUSINESS, CHICAGO, IL
Dr. Goolsbee. Thank you, Mr. Vice Chair, and Mr. Chairman.
I applaud you for having this hearing. There is really, on the
economic side, nothing more important.
As I have only five minutes, I wanted to make three simple
points, and some of which will overlap with what we just heard.
As an introduction, I would remind you to a piece I wrote
in my New York Times column on March 7th when there had only
been a handful of deaths in the United States, and the
contention from the White House had been that this disease and
potential pandemic was locked down airtight and was not going
to spread around the country. And I wrote this article saying,
if we had a health outbreak in this country of the magnitude of
what they had in China, given the structure of the U.S. economy
and the structure of really all the rich countries' economies,
the economic impact would be worse here than it even was in
China, which was devastating. But it would be worse because we
have so much more focus on service sector industries and face-
to-face interactions.
And it was a warning, and it was my fervent hope that that
warning never come to play. And, unfortunately, it did. And so
the three points that I would make--maybe there are two-and-a-
half points--but the first point is:
It is not a tradeoff between the economy and public health/
saving lives. You heard that from the distinguished doctor just
previously, and I would just re-emphasize that on the economic
side.
What killed the economy, what put us into as fast a drop as
has ever happened in this country economically, was not the
imposition of policy lockdowns. That is not what killed the
economy. The data is overwhelmingly clear that the economic
drop began before the lockdowns were ever in place; that the
drop in economic activity is very similar in places that had
lockdowns and places that did not have lockdowns.
The main thing that drove the economic decline is the same
thing that always drives decline in a crisis, and that is when
people are afraid, they withdraw. And in this case they were
afraid of catching the disease, so they stayed home. The United
States is particularly vulnerable on the health side, as you
know, because of the factors that are correlated with the
disease having a more negative impact. Obesity, previous heart
conditions, diabetes, being over age 65, if you look at all of
the groups at risk, by some estimates it adds up to a majority
of the American people.
So you can see why people would be afraid when they hear
that a disease that has those features is spreading around;
that there is not enough testing for them to be able to feel
comfortable going out without catching it; that they are going
to stay home.
And you need only look at the airline industry, where there
are no laws forbidding people from flying, but the demand for
air travel plunged anyway, because people are themselves
nervous.
I have done some research that I will cite in the written
testimony with another economist where we got access to the
phone location records for visitors to 2.5 million businesses
around the United states. And we compared across metropolitan
areas in the same week where on one side of the border they had
a lockdown order, and on the other side they did not. So an
example would be the Quad Cities on the border of Iowa and
Illinois where Moline, Illinois, had a shutdown order. If you
look at Bettendorf, Iowa, they did not. The demand went down
only about seven percent more in places with shutdown orders
than not with shutdown orders.
It was not the policy that did it. As I always say, the
virus is the boss. If we cannot stop the spread of the virus,
then we cannot bring the economy back to where we were even,
much less grow at the rate that we needed to grown. It is not a
tradeoff, and that is what is critical to see.
My second point, and maybe it is just a half-point, is that
the relief payments that the U.S. Government has provided to
small business, to individuals, to the unemployed, to large
businesses, et cetera, they are necessary to get us through
this problem, but they are not sufficient to restart the
economy.
To restart the economy we have to stop the spread of the
virus. So I believe that there is a perfectly valid debate to
have about what forms of relief are most effective, and what
are the best ways to enact those, but we are quite seriously in
a position where we are burning money to prevent ourselves from
freezing to death while the furnace is out.
And it is necessary. You do not want to freeze to death.
But we must remember that we have to get the furnace back
running, and the only way to get the furnace running is to slow
the rate of the spread of the virus.
The third point I will make is that it is not too late. It
is not too late to simply do what other rich countries around
the world have done to both slow the rate of spread of the
virus, and allow their economies to turn around more rapidly
than the United States has.
So they have taken different approaches, whether it is more
testing, more mask wearing, public health measures, but even
without a vaccine, without a vaccine to SARs, without a vaccine
to MERS, for a long time there was no vaccine to Ebola, we
still got control of the spread of those viruses by public
health measures to stop the infection rate.
If you take the work of Harry Holzer at Georgetown who
published for Brookings, if the United States had simply
addressed the virus with the same effectiveness as the average
for other rich countries, we would have nine million more
people at work, and we would have more than 100,000 fewer
people dead from this virus.
We must commit ourselves, I believe, to slowing the rate of
spread of the virus in every way that we can. Otherwise, the
economy will continue to suffer. It is not a choice to be made
by a President, by a governor, by a mayor, it is a choice that
is made by every consumer every day when they decide are they
afraid to go outside. And I think we must keep that in mind.
[The prepared statement of Dr. Austan D. Goolsbee appears
in the Submissions for the Record on page 50.]
Vice Chairman Beyer. Professor, thank you very much.
We will now hear from Dr. Singer. The floor is yours.
STATEMENT OF DR. JEFFREY A. SINGER, M.D., F.A.C.S., SENIOR
FELLOW, CATO INSTITUTE, WASHINGTON, DC
Dr. Singer. Thank you, Mr. Vice Chairman and Mr. Chairman,
and members of the Committee. I really appreciate being invited
to testify.
I will briefly summarize the key points in my written
testimony.
The Food and Drug Administration's test approval process
caused an avoidable, harmful delay in getting test kits to the
general public. The FDA should have authorized tests already in
use in similar countries. Eventually, the FDA permitted states
to independently approve tests for use within their own
borders. When the public health crisis ends, FDA testing policy
should not return to the status quo ante.
S. 3769, the Right to Test Act, would grant authority to
states to approve tests within their borders whenever the
Secretary of Health and Human Services declares a public health
emergency. Congress should consider granting states the
authority to approve drugs and tests and other devices that may
be marketed within their borders, even when there is not a
public health emergency.
Congress should also pass legislation granting reciprocal
approval to drugs and medical devices in similar countries.
Reciprocity already exists among the European Union states,
plus Iceland, Lichtenstein, and Norway.
S. 2161, which was introduced in July of 2019, also called
The Result Act, would allow for the marketing of drugs approved
in certain countries but not yet approved by the FDA, if,
quote, ``there is an unmet need.'' Close quote. While this is
indeed a step in the right direction, in the interests of
promoting competition and consumer choice, reciprocal approval
should not be contingent on an unmet need.
In several states, governors suspended state licensing laws
allowing practitioners licensed in any state to come to the aid
of their residents. These emergency actions tacitly recognized
a pressing problem: state clinician licensing was blocking
access to care.
In 2019, Arizona became the first of now several states to
enact laws recognizing the out-of-state occupational and
professional licenses of those who establish permanent
locations within their jurisdictions. The remaining states, and
the District of Columbia, should do the same.
However, requiring health care practitioners to establish
permanent in-state locations makes the reform less effective.
States should remove this requirement. States should also grant
reciprocity to health care practitioners licensed in certain
other countries that have reputations for quality medical
education and develop provisional license programs to integrate
practitioners from less advanced countries into the pool of
health care providers. Canada, Australia, New Zealand, and most
EU countries offer provisional licenses.
State licensing laws also impede the widespread use of
telemedicine. Most states only let health care practitioners
provide telemedicine to patients in states in which the
providers are licensed. To the extent, consistent with its
authority, to tear down barriers to interstate commerce under
Article I of Section 8 of the Constitution, Congress should
define the ``locus of care'' as the state in which the
practitioner is located, as opposed to the state in which the
consumer resides. While states have the Constitutional
authority to regulate the practice of medicine for residents
within their borders, crossing state lines to provide
telemedicine or short-term care can reasonably be classified as
interstate commerce.
Where did you lose me?
Vice Chairman Beyer. A few sentences back.
Dr. Singer. Was I done talking about provisional licensing
in
Vice Chairman Beyer. Right there.
Dr. Singer. Okay, state licensing laws also impede the
widespread use of telemedicine. Most states only let health
care practitioners provide telemedicine to patients in states
in which the providers are licensed.
To the extent, consistent with its authority to tear down
barriers to interstate commerce under Article I, Section 8, of
the Constitution, Congress should define the ``locus of care''
as the state in which the practitioner is located as opposed to
the state in which the consumer of the service resides. While
states have Constitutional authority to regulate the practice
of medicine for residents within their borders, crossing state
lines to provide telemedicine or short-term in-person care can
reasonably be classified as commerce--as interstate commerce.
S. 3993 introduced in the U.S. Senate on June 17, would
define the ``locus of care'' as the state in which the
practitioner is licensed, but would only apply to this pandemic
and would be limited to telemedicine. This should not just be
limited to telemedicine or to this pandemic. It should be
permanent, and it should also apply to practitioners who
provide short-term in-person care across state lines.
State certificates of need laws like licensing laws are
heavily influenced by incumbent providers and render state
health systems unable to rapidly meet the changing demands of
public health emergencies. The Joint Economic Committee and the
relevant committees of the U.S. Senate and House of
Representatives should investigate whether state certificate of
need laws and state licensing laws constitute antitrust
violations. Individual Members of Congress, or Congress as a
whole, should direct the Federal Trade Commission to use its
existing authority to enhance scrutiny of these state laws.
And then finally, while the harmful effects of the pandemic
occur in real time, the public health consequences of many
policy tradeoffs may not be readily apparent but are
nonetheless extremely damaging. And many economic tradeoffs of
pandemic policy factor into the social determinants of health.
Policymakers should be sensitive to both the seen and the
unseen consequences of pandemic policy. The disparity between
what is seen and what is not seen incentivizes government
officials to be overly cautious and impose more restrictions
for longer lengths of time than what might really be necessary.
On all levels of government, one-size-fits-all measures
should be kept to a minimum, and civil society should be
informed, guided, and entrusted to work out suitable solutions
using local knowledge.
Thank you, once again.
[The prepared statement of Dr. Jeffrey A. Singer appears in
the Submissions for the Record on page 52.]
Vice Chairman Beyer. Dr. Singer. Thank you very much. And
now, finally, Dr. Adam Michel.
STATEMENT OF DR. ADAM MICHEL, SENIOR POLICY ANALYST, GROVER M.
HERMANN CENTER FOR THE FEDERAL BUDGET, THE HERITAGE FOUNDATION,
WASHINGTON, DC
Dr. Michel. Vice Chair Beyer, Chairman Lee, thank you for
the opportunity to be here today.
Now it has been almost seven months into this crisis, and I
do not think anyone has lost sight of the devastating cost to
our health and our livelihoods from the coronavirus. What we
can lose sight of is the Federal fiscal response has been
equally unprecedented.
I am going to begin with a brief overview of the current
landscape, highlight the inability of Congress to stimulate an
economic recovery with more spending, and then briefly outline
three areas where Congress can help facilitate recovery.
To date, Congress has authorized $4 trillion in aid, and
the Federal Reserve has made another $7 trillion available. Due
to the significant Federal transfers, disposable personal
income and personal savings have actually increased during the
height of the crisis, and have remained elevated.
These temporary programs represent a powerful one-time
action, but they are not a sustainable solution, especially if
the path of the virus over the next year or more remains highly
uncertain.
The trillions in new programs that have already been
authorized will also have future costs. They will discourage
work. They will keep businesses from retooling for the new
normal. And they will add to public debt which will lead to
future tax increases.
The Federal Government cannot keep the U.S. economy on life
support forever. Americans must be allowed to return to work,
return to their communities, and return to their schools.
Since February's peak, we have recovered about half of the
jobs we lost in the Spring. Other economic indicators are also
trending in a positive direction. Given this swift turnaround,
I want to caution you that this is not proof that the trillions
of dollars spent over the past several months are responsible
for the good news.
Historical evidence makes it clear that stimulus spending
is not an effective way to revive failing economies, and early
estimates of things like the paycheck protection program put
the cost of each job saved as just shy of $300,000. Ultimately,
governments are not able to tax and spend their way back to
economic prosperity. Instead, the quicker-than-expected rebound
has been driven by Americans ready to re-engage in their
communities and return to work.
The recovery will continue to follow people's willingness
and ability to return to work, return to school, and return to
their communities. So what can be done?
First, states should allow businesses and schools to
reopen, with safety measures in place. Congress can help
facilitate this reopening by protecting workers and protecting
employers with liability measures to shield from frivolous
lawsuits.
Second, Congress can increase access to business capital so
that those who do reopen existing businesses can expand, and
entrepreneurs who take on risks of bringing new ideas to market
to fill new needs in the crisis economy will be able to scale
up. Things like full expensing and streamlined rules around
raising funds can go a long way toward facilitating a quick
recovery.
Lastly, Congress can increase worker flexibility. With
limited jobs available, people need options. And with kids at
home, and other constraints, people need additional
flexibility. Last year, 76 percent of people said they would
consider freelancing if we were in a recession. Congress could
make finding these type of flexible work arrangements easier by
streamlining the multiple definitions of what an ``employee''
is, and providing safe harbors for non-wage benefits for
freelance workers. Traditional workplaces can also be made more
flexible by rolling back recent increases to overtime
thresholds, and creating things like universal savings accounts
so that all Americans can save more of their earnings
regardless of their employment status.
Additional large-scale Federal aid threatens to derail the
recovery. New stimulus checks, temporary payroll tax holidays,
and more Federal spending to inflate state budgets, or new
infrastructure spending, are all misguided attempts to support
the economy.
Additional stimulus spending will simply worsen America's
budget imbalances without the benefits of a promised economic
boost.
Thank you, and I look forward to your questions.
[The prepared statement of Dr. Adam Michel appears in the
Submissions for the Record on page 59.]
Vice Chairman Beyer. Dr. Michel, thank you very much. We
have finished with the presentations of our experts and we will
begin a round of questions. As the Acting Vice Chair today, I
get to start.
So let me begin. Dr. Goolsbee, I am fascinated by your
research that shows that the cause of the downturn was not
lockdowns, but people with money choosing not to spend on
personal services outside the home.
What does that tell us about prospects for boosting
consumption with the virus still raging across the country,
with 40,000 new confirmed cases a day?
Dr. Goolsbee. Yeah, it does not bode well. This finding
that we had has also been shown in other data. Ours, as I said,
was based on phone records and where people physically visited
stores. There have been others who got credit card records of
what people spend money on.
And the thing we highlight in the paper that I would call
your attention to is, the prevalence of the disease in your
local area, in your county, matters a lot for whether people go
out to visit stores, go to the barber shop, et cetera. And if
you do something that increases the infection rate, you can
easily undo even the economic potential that you are hoping to
accomplish by say easing the lockdowns.
So we show in the paper that in those places where they get
rid of their lockdown orders, you see only a modest improvement
to their economies of a little less than 7 percent, because the
lockdown was not the thing that was killing it. And if
repealing that lockdown lets the virus go up more, it can
easily, over the medium and long run, do more economic damage
than you did improvement by getting rid of the orders.
Vice Chairman Beyer. You were Chairman of the Council of
Economic Advisers. Dr. Michel was just talking about how
stimulus has no impact. Do you think things like the
unemployment insurance bump, and the paycheck protection were
intended as stimulus? Or simply to allow people to survive, and
businesses to survive?
Dr. Goolsbee. Well I think that is an important
distinction. Look, we can argue--and I do not agree with the
evidence that stimulus is always and everywhere ineffective. I
think there are many examples where the impact of stimulus can
be positive.
In this case, these were relief and rescue payments. These
are not traditional stimulus of the form, let us spend this
money to try to jump-start the economy. This is literally so
that people do not lose their homes, so that businesses do not
permanently have to liquidate while waiting out this temporary
storm.
Vice Chairman Beyer. Thank you very much.
Dr. Jha, you laid out in your testimony a lot of what was
mishandled in the U.S. response to COVID. I was fascinated by
your comparisons with South Korea, Japan, Taiwan, Australia,
and Germany. The costs have been enormous. If we had had the
kind of response that Germany has had, for example, any idea
how many American lives could have been saved?
Dr. Jha. Yes, Congressman. You know, it is interesting.
Germany is interesting because it is not some small, tiny
northern European country. It has a population of 80 million.
It is a pretty federal government where states have a lot of
say. So in many ways it reflects the structure of our Nation.
And their mortality rate has been about 80 percent lower than
ours.
And so if you just simply do the math, if our population
was the same as Germany, we would have had about 40,000 deaths,
not 200,000, or 160,000 fewer Americans would have died if we
had the same death rate that Germany has had.
Vice Chairman Beyer. Thank you very much. In the last
couple of days we have seen people say we may be wearing masks
through all of 2021, and with this airborne that the masks may
be more effective, at least in the short run, than the vaccine.
How do we--how does an American leader encourage people to
wear masks, to get over this notion that masks are some kind of
assault on our rights as an American?
Dr. Jha. What I always hear them bring up is that viruses
create a lot of assaults on our freedoms. And the question is:
which assaults do you care about? I have three children. I want
them back in school. Their inability to get back to school is
an assault on their freedom and ours. The inability of people
to get back to work is an assault on their freedom.
So if everybody wore masks, and we did some of the other
public health--let's just focus on masks. If we had universal
mask wearing, we would have a lot more kids back in school. We
would have a lot more people back at work. Those are real
freedoms that would come from basic public health measures.
We have never, in a public health crisis, said individual
freedom is paramount. In public health crises, like in times of
war, we have said that there are national and social
responsibilities that are just as important as individual
decisionmaking.
I do think that there are real tradeoffs here, and they
cannot just be about whether you want to wear a mask or not. It
is about what kind of society do we want to live in.
Vice Chairman Beyer. Thank you, Dr. Jha, very much. My time
is up. I would like to recognize the Full Chairman of the
Committee, Senator Lee.
Chairman Lee. Thank you so much, Vice Chair Beyer.
Dr. Singer, I would like to start with you if we can. In
your testimony, you highlight the importance of considering
other negative health impacts of the pandemic--meaning other
health implications, including things like increased mental
health problems, delayed vaccinations for children, and
decreased access to routine care.
Can you suggest ideas or strategies to ensure that these
important kinds of health care are not neglected?
Dr. Singer. Yes, first I would like to say I concur with
Dr. Goolsbee, and in fact a lot of evidence has shown that
regardless of whether there is a one-size-fits-all lockdown
that is imposed, people are not going to engage in economic
activity until they feel unafraid. Even in the early days of
this pandemic, I think it was in early March, Open Table, for
example, was reporting a tremendous drop off in people making
reservations at restaurants.
So some of the tradeoffs actually are not a direct result
of government policy; they are the result of people on their
own making decisions out of fear. For example, I am a surgeon
and we had a blanket moratorium on all nonemergency surgery. It
was called elective surgery. A lot of people mistake
``elective'' for being unnecessary, but it is necessary. It is
just that you can schedule it.
And we were seeing people show up in the emergency rooms
with very advanced cases of surgical emergencies that, the
reason they were advanced is because the people let them go.
People were coming in with appendicitis that had ruptured days
ago because they were afraid of catching COVID if they went to
the emergency room.
And then of course there are people who already, for
example, with substance use disorder, and a large part of
treatment for substance use disorder involves connection. And
when you are isolated to the home, not only are you cut off
from your rehab program, but you are also cut off from
connection to people. And this tends to make people relapse,
the people who are depressed have an increased suicide rate,
and we are seeing people neglect their health in general
because they are afraid to come to the doctor's office for
maintenance visits dealing with maintaining their medications
that have to do with their heart, or their lungs, or blood
pressure.
Chairman Lee. Thank you. A related question I wanted to ask
you, Dr. Singer, when we talk about disparities between the
United States and other countries that we would consider to be
our peer nations, are there explanations for that other than
just people are getting sick at a higher rate here?
In other words, are there differences between the testing
protocols adopted by the United States and testing protocols
adopted by some of our peer nations?
Dr. Singer. Well, there are so many multiple factors at
play, so it is really hard to make an apples to apples
comparison. But in many cases, many of the other nations got
their testing going much more quickly. In Germany, they were
doing testing in late January, with a private-sector developed
test. And we all know about Korea's success. Korea's success
was built upon their experience with the MERS outbreak back in
2015 where they learned that they need to allow the private
sector to get out there with tests right away. So they revised
their process, that unfortunately we have here in the United
States, which slowed down the wheels of progress. So they
basically had it set up that private labs can get busy getting
tests out, and just keep their version of the FDA in the loop
and informed as things were going forward.
In our case, the FDA basically gave, for all intents and
purposes, a monopoly to the CDC to develop a test, and then
when the test turned out to be defective in late February, it
began playing catchup.
So a lot of it I think has to do with our regulatory
system. Sad to say, we are supposed to be the beacon of free
markets and limited government, but a lot of the other
countries that do not have the reputation that we have, seemed
to be much more flexible, and had actually decreased
regulation. And they were able to respond more quickly. I think
that had a lot to do with it.
Chairman Lee. That makes sense. I have another question for
Dr. Michel, and for you again, Dr. Singer. A recent Wall Street
Journal article noted that, despite cases in Europe rising,
there are a lot of leaders who are now rejecting lockdowns. One
physician who coordinates an EU scientific advisory panel
observed that the scientific evidence that led to lockdowns
failed to consider the broader social and economic
repercussions.
He is now advising policymakers to ask people to, quote,
``take personal responsibility to curb the disease by adhering
to social distancing, wearing masks, avoiding crowded spaces,
and staying away from people at greater risk.'' Close quote.
Rather than relying on government.
So in your view, starting with you, Dr. Michel, would a
national lockdown of the United States, starting in the spring,
have been misguided and should policymakers and health experts
update our messaging to emphasize personal responsibility?
Dr. Michel. Yes. I think you are exactly right. The most
economically costly public health measures are also those that
are least effective at controlling the virus. Namely, lockdowns
and stay-at-home orders. When you look across the country,
across states, there is very little evidence to show that the
legal restrictions on distancing and movement are what decrease
the spread of the virus.
So focusing on testing, focusing on isolating those who are
sick, these are the things that we know work, and I think that
should be where our public health response remains.
Chairman Lee. Dr. Singer, would you respond to that?
Dr. Singer. Yeah, I agree. All you have to do is look to
what is going on in the rest of the world. All of the countries
that had lockdowns are now experiencing surges in cases. So the
lockdowns--the virus--everybody seems to think if you stay
locked down long enough, this virus will get bored and go to
some other planet. This virus is here. It is not going away. We
have to learn to basically adopt harm-reduction measures,
because this--even if we get a vaccine, we do not know how
effective the vaccine is going to be.
So we have--fortunately, now, eight months into this thing,
we know a lot more about the virus. We know who we need to
particularly protect. We know what kind of behaviors we should
adopt that would decrease risk.
And while I can understand the lockdowns early on when we
knew very little, we know much more now. And I do not think
there is any excuse for it. In addition, I think it is
important--and I have written about this--that when these
decisions are made, as decentralized and localized as possible
based on local knowledge, then different areas based upon
changes in circumstances, can adjust.
When all the decisionmaking authority is placed in one
person, then, no matter who that person is, there is going to
be an incentive for that person to be overly cautious because
the first thing you are going to see when regulations are
relaxed is cases go up. And that is on that person. Whereas,
what you do not see readily are the other long-term tradeoffs,
and public health tradeoffs as well, from delaying the
relaxation of those decisions.
So again, these things, we should try to handle them as
much as possible by having an informed public, with consistent
information, being told what they need to do to make the
adjustments at the local level.
Chairman Lee. Dr. Singer, you have just made what I think
is one of the best arguments I have ever heard for the American
form of government. That is, for the twin structural
protections of federalism and separation of powers.
Our entire system of government was built around the idea
that we do not want any one person, or one group of people, to
accumulate excessive power. And it applies not only in spite
of, but specifically in the midst of something like the COVID
pandemic. You do not want to put all of your decisionmaking
power at the national level, even where there are national
decisions to be made. You do not necessarily want to focus that
in one person. And you just pointed out some reasons grounded
in medical science why that is the case. So I appreciate that
perspective.
Okay, my time has expired. We are going to turn next to
Senator Klobuchar.
[Pause.]
Senator Klobuchar, are you there?
Senator Klobuchar. Very good. I can. Thank you.
Thank you all for this hearing, and I want to start out
with you, Dr. Goolsbee. Thank you for your words about masks,
and about tracking, and about being able to relate this
pandemic--I think we all think of the pandemic, and we do not
want to get sick, and many people have personally lost loved
ones. My husband was in the hospital for a week, and came out
of it. But I think sometimes we do not connect it with the
economics, which is also an important thing for people to see.
As we wait for a vaccine, we need the masks, we need the
tracking, and it is about keeping us safe. But it is also about
keeping our economy in a place where we can at some point go
back to where it was.
I guess my first question was how long do you estimate it
would take to make up the economic productivity and growth that
we have lost?
Dr. Goolsbee. Well, that is a critical question, clearly,
and the answer depends totally on whether we can get control of
this virus. If we could get the reproduction rate, the R value,
of the virus down to less than one, and the spread of it was
simply at the rate that it has been in other rich countries, I
actually think that in much of the economy the turnaround could
be pretty rapid.
There are still going to be some areas, like cruise ships,
where until there is a vaccine it is kind of hard to see that
sector going back to what it was before. But I think it could
be turned around fairly quickly.
Senator Klobuchar. So while we wait for the vaccine, we
could be in a much better place economically if we had an
Administration that was putting it in place.
Dr. Goolsbee. And to highlight in other countries. We
talked about Germany, Australia, New Zealand, places where they
handled the disease better.
If you look at how much their unemployment rates are
higher, or have changed now compared with before the vaccine
was there, the U.S. is by far an outlier. So our unemployment
rate is more than double what it was when it arrived.
If you look--I have the list here--in Germany, the
unemployment rate is up only one percentage point. In Korea, it
is actually down. In France and New Zealand, it is down. Even
in Japan it is up a half a percent. In Italy, five percent.
Senator Klobuchar. Yes. Those are not our numbers. One
area, I just want to ask one more question here. You were
mentioning certain areas of the economy. I think one of the
things we know is that one size does not fit all. Tech for the
most part is booming. And then you have the hospitality
industry with restaurants and certain hotels, not all, but
certain hotels very much hurt. And then you have venues. And
this is a bill Senator Cornyn and I have to save our stages all
over the country. You cannot exactly go stand in a mosh pit
during a pandemic. They were some of the first to close and
will be some of the last to open. And we now have 40 co-
sponsors in the Senate. The House has similar. Very bipartisan.
It would help with grants to these venues. This includes places
like First Avenue, where we would not have had Prince, but it
also includes the Fargo Theater, and small and mid-sized towns.
Oftentimes we will have one cultural venue that is so
important. Could you explain why that is important for the
economies that surround these venues?
Dr. Goolsbee. Well, look, the economies that surround those
venues very much rely on that. And that is one part that kind
of leisure entertainment, travel, tourism, all of that space is
particularly important in the U.S. economy. I saw a recent
survey from this past week in Crain's Chicago Business that
literally three-quarters of the independent music venues and
theaters in the City of Chicago believe that they are going to
have to close down permanently because of this.
Senator Klobuchar. Exactly. Alright, well thank you for
your work. Thank you.
Chairman Lee. Representative Schweikert, you are up next.
David Schweikert, are you there?
[No response.]
Chairman Lee. If not, it will be Representative Frankel.
Representative Frankel. I am happily listening. I wanted to
thank everybody for a very interesting discussion tonight, and
I yield back.
Chairman Lee. Great. Representative LaHood, you are next.
[No response.]
Chairman Lee. No response from LaHood?
Senator Cotton.
[No response.]
Chairman Lee. Senator Cotton, if you are there, let us
know. If not, we will go to Representative Herrera Beutler.
Representative Herrera Beutler. Can you guys hear me?
Chairman Lee. Here we go. Here we go.
Representative Herrera Beutler. You guys have got it. Okay.
Thank you. Sorry. I keep trying to change my name on this. I am
not 997402996, but----
Chairman Lee. It's a pretty name.
[Laughter.]
Representative Herrera Beutler. This has been really--I am
standing up in the gallery in the middle of a two-year-long
vote series to get two votes done. Meanwhile, everybody is
wandering around exposing themselves more to COVID, so I think
one of the things we've learned from this is there are things
that work and there are things that are only for show, and what
I am hearing is, and what I am interested in, I want to do
those things and take those steps that work to protect people.
But we also need to move past the things that are just for
show, because the economic damage that we are--that is being
wrought on the country, like you cannot just turn it back on.
I keep hearing people say, well how soon can we start back
up? Well, we are losing businesses in southwest Washington
State. They are dying on the vine right now. They can't just
start back up. That was someone's life savings, it's done. And
so how do we limit that?
And the same is true on the health care side. I have a few
different questions. Dr. Singer, I got on when you were
finishing your testimony, and you were highlighting the
burdensome regulations that get in the way of health care,
including the drug authorizations and state licensure
requirements. Certificate of need. It was just a barrier to
efficient, effective telemedicine in this crisis.
Is there something--at least that is my opinion--CMS is now
considering making a variety of telehealth waivers they issued
under the Crisis Separation permanent. Is this something you
agree with? Are there other regulatory burdens that can be
removed during the rulemaking process?
Dr. Singer. Well, Representative, the CMS plan is certainly
a step in the right direction. But that only deals with
basically paying providers who engage in telemedicine. But that
is of course--and that only affects people who are on Medicare
or Medicaid. But what makes that not really very effective is
the state licensing law.
So even as a provider, if I know that Medicare will pay me
for providing health care to someone in my neighboring State of
New Mexico, I am in Arizona, if I am not allowed to do it, it
does not really make much--it does not help.
So the problem is, just like certificate of need as you
mentioned earlier, most of the state licensing laws and
certificate of need laws tend to be heavily influenced by the
incumbents, and keep out competition.
And in fact, in the mid-1980s when Congress repealed the
incentives it gave to states to establish certificate of need
laws, it recognized that. And so there are still,
unfortunately, about 38 states that still have them to one
degree or another.
That is why I offered the proposal of Congress actually
passing a law--and I think it is within Congress' purview under
Article I, Section 8, the authority to regulate commerce among
the states--would be to define the ``locus of care'' as the
state in which the practitioner is licensed, as opposed to
which a state in which the recipient of the care happens to be
residing. And that would kind of--that would make it work.
As far as certificate of need laws are concerned, it is
unfortunately a state issue and it is up to states to decide
whether or not to repeal them. But I think--now I am not a
Constitutional lawyer--I am not a lawyer--but my colleagues at
the Cato Institute tell me that there is at least reason to
look into whether or not certificate of need laws and state
licensing laws might constitute a form of antitrust violation.
And at least ask the Federal Trade Commission to look into
that.
Representative Herrera Beutler. That is interesting. I had
not thought about that. I cannot see the clock. Do I have any
time left? Somebody cut me off.
Dr. Michel, in your testimony you think that there should
be no additional stimulus payments to individuals, or we should
phase out the--unfortunately, so many of my constituents have
not received their check. I am in Washington State. I am right
on the border, so people cross over into Oregon, which is
another where ESB has been a bit of a mess.
And so the stimulus checks were the only thing that people
actually--some of these people actually got. And they are
pretty dire situations. How would you suggest that we reform
the unemployment insurance system, or somehow help the states
do it, so that we do not end up in this problem again?
Dr. Michel. Well, it is a fantastic question, and I think
the strength of our system is that the unemployment system is
handled at the state level, and is able to be tailored to the
populations across the country.
So I would not want to federalize the system, or to make it
a system that if the Federal Government failed to get the
checks out, no one got them. I think that having--it is
unfortunate that certain states have really struggled, but
other states have succeeded. And so I would hope that states
learn from this crisis and are able to update and modernize
their systems. I think it is, frankly, ridiculous that we were
not able to provide a matched benefit that allows a scaled
match of someone's pre-pandemic wages. Instead, we had to do a
lump sum payment.
That is a failure of state unemployment systems. And so I
would point to state reforms, and states need to make sure
those systems are robust. But to put a fine point on the fact
that we cannot always rely on government for everything that we
need, things like universal savings accounts could help people
save for their own rainy day funds, to help people build their
own savings rather than always waiting for the government
systems that tend to not work when we need them most.
Representative Herrera Beutler. Thank you. I am sure I am
out of time. Yield back.
Chairman Lee. Representative Schweikert, you are up next.
We cannot hear you, David. Are you on mute?
There we go. There we go.
Representative Schweikert. We were having some technology
problems. And let me disclose, Dr. Singer has been a friend for
decades and decades, and I sort of consider him my advisor on
some weird technical issues.
But, Dr. Singer, and also Mr. Goolsbee, because you also
touched on this when you were speaking, if I came to you and
said, ``We are part of the Joint Economic Committee and we want
to have an understanding of the entire societal cost, just in
the United States, but the societal cost of the pandemic--the
cost to my soon-to-be-5-year-old daughter who may have lost
several months of education, the loss to society I'm hearing of
a young high school student who took her life in a heart-
breaking fashion in my community, all the way down to lost
wages.'' Is there anyone out there--and, Dr. Singer, I will ask
you first--who you believe is building a model both to help us
understand our entire societal cost, and therefore helping us
do sort of decision theory? Here is the cost directly related.
Here is the second degree, third degree, type of cascade costs,
as a good economic model would produce. It is something we are
going to need to know as we do the post-mortem on this
pandemic.
Dr. Singer. Well, Congressman Schweikert, I am not an
economist, and I am not sure anybody could really accurately
answer that question because there are so many things that we
do not see and are not aware of. So much is subjective.
I imagine there are some economists trying to come up with
models that would at least give an inkling of it, but I am not
familiar with those models.
Representative Schweikert. Alright, thank you, Jeff.
Dr. Goolsbee.
Dr. Goolsbee. I would like to say that it is a fascinating
kind of intellectual exercise that motivates our policy
discussion. I do not think anybody has truly tried to put the
whole burrito together in that way. They have been----
Representative Schweikert. You had to talk about a burrito
when I have missed lunch [laughing].
Dr. Goolsbee. I apologize. There has been a lot of work
trying to isolate individual components. So if you think of my
own work, and the work that I cited, that is about how you
identify just what is the impact of lockdown orders. That that
was about 7 percent on economic activity in those industries.
The broader impacts on education, on mental wellness, and
the things that you mentioned, it is probably going to be some
time before we look back and are able to recognize that.
Representative Schweikert. A couple of the economists from
Joint Economics I work with were trying to think this through.
If any of you, our witnesses, come across a paper, think of me.
Send it to us. Because it would help us build a decision-making
model for the future, for ourselves and hopefully for the
world.
Dr. Goolsbee, as long as I have you, if I came to you and
said, ``We are not going to talk about the past. We are not
going to talk about decisions made a week ago or three months
ago.'' But as of today, if you walked into my office and said,
``Here are policies I want you to adopt to maximize economic
expansion''--and, Adam, I am going to ask you the same one--
what would you do today that helps keep our communities, our
society, as healthy as we can, but also creates as much
economic velocity. Because you see our debt picture. What would
you do today?
Dr. Goolsbee. Look, this is a critical area. I actually
would put the focus, number one, on the public health measures,
which are not normal for economists. Normally economists would
propose economic policies, but I think most of the economists
are proposing public health policies like getting more masks
wearing, getting more mask wearing, more testing and tracing,
so that rather than having everyone shut down, we could just
pull out of the economy those people that are contagious.
Those would be critical. If you could wave a magic wand and
have a vaccine by Monday, much--not all of the economy could go
right back to doing what it was doing before the pandemic
began. And so that makes this recession very different from any
previous recession.
So I would put the focus on that public health stuff.
Representative Schweikert. That is sort of very
Shilleresque, if we can say, attitudinal.
Adam, what would you do? If I came to you right now today
and said, ``I need policy that we would do today,'' what would
you do?
Dr. Michel. I agree with Dr. Goolsbee that we have to get
testing, and we have to get isolation of people that are sick
right, before people feel confident in returning to their pre-
crisis activities. People have to feel willing to go out and
spend their money, and go to work, in order for anything else
to matter. But then it is about getting all of the other things
we know allow businesses and people to thrive right.
It is making sure taxes stay low. It is about fixing our
debt trajectory so that taxes do not have to increase in the
future. It is making sure entrepreneurs can access the capital
that they need. It is sort of the whole host of pro-growth
policies that will then allow, once we get testing and tracing
right, to allow the economy to accelerate back to where it was.
Representative Schweikert. Alright. Mr. Chairman, thank you
for your patience, and thank you for your patience with my
technology.
Chairman Lee. Oh, you bet. You bet. You are one of the more
tech savvy members of the House or Senate I know, so it is good
to have you here.
Representative Beatty, you are next.
Representative Beatty. Okay, I think I am unmuted now.
Sorry, I had some difficulties getting on, as well, here in the
Capitol, but thank you. And thank you to our witnesses.
The first question I have is for you, Dr. Goolsbee. Back in
March of this year you said that the number one rule of virus
economics is that you have to stop the virus, of course, before
we can do anything. But despite all these warnings, this
Administration has refused to take, in my opinion, the virus
seriously enough to combat it.
Also in January the President said that we have it under
control. Then in February we had maybe about 15 cases, and he
said that it would go away, or one day it maybe will magically
go away.
Can you tell us, when you look at other countries like
Korea, like Germany, who chose to attack the virus early on
head on, can you compare the long-term economic effect of
choosing to prioritize health, like these other countries did,
with the United States patchwork response led to our state
having more death cases?
How did that--or is that continuing to affect the economy?
Dr. Goolsbee. Yes, Representative, I think it did affect
the economy, and it is continuing to affect the economy. As I
mentioned when discussing it with Senator Klobuchar, if you
look at the employment performance in the countries where they
made a clear national strategy and prioritization to stop the
spread of the disease, their job market destruction has been
far less than what has happened in the United States.
In several of these countries, their unemployment rate
actually went down over the course of this, rather than more
than doubling like it did in the United States.
And then I would just highlight the second component, which
is hundreds of thousands of people have died in this country
that did not need to die had we done this prioritization. I do
not understand a national strategy that is, at best, of mixed
motivation. And by that, I say sometimes the Federal
Government's response has been good, and then sometimes it
comes with a playback, kind of a soundtrack that goes against
the stated response.
So making fun of people for wearing masks, saying we should
liberate the country when they are trying to restrict access to
restaurants and bars and places where the spread of the disease
has been documented to be high. Those are things that go
against other statements that you should take the disease
seriously.
And I think the numbers really speak for themselves, and in
fact I think neither the economy nor the public health
consequences of those decisions, I think they are pretty
serious and pretty negative.
Representative Beatty. Well let me just applaud you and say
thank you, because as an economist you are saying the exact
same thing that our experts who are in the science area and
health care, many of them who are also participating with the
Administration have told us the value of this. So I cannot
thank you enough for that.
To the second witness, let me ask you if you aware of this.
We recently heard that the White House had scrapped the plans
for the United States Postal Service to send approximately $650
million worth of masks to Americans through the mail, and then
that got scrapped. So I think that is just another instance.
But do you think that it would have made a difference,
let's say, if we would have sent every citizen five masks, so
they could have had them. Would that have had--what kind of
health and economic impact do you think, if any, that would
have made if every citizen would have been given one, as I
understand the original plan was?
Dr. Jha. Congresswoman, thank you for that question. There
is no doubt about it in my mind that getting more people to
wear masks would have made a very big difference. If it had
come from the government, if it had come from the Federal
Government, there is some skepticism in some quarters. I think
it would have helped that skepticism if it came from the
President, or came from the White House's seal of approval. But
most importantly, it would have made it easier for people to
wear masks. And I think that would have made an enormous
difference.
So I am sorry that that was scrapped. It would have led to
fewer cases, fewer deaths, and I believe great economic
rebound. The fundamental point here is, we have got to get the
virus under control. And if we do that, our economy can recover
and masks would have been a really helpful part of that.
Representative Beatty. I posed--I left the Financial
Services Committee just an hour or so ago, and I posed that
same question to Secretary Mnuchin, because he had gotten
involved with the Postal Service. He said he was not aware of
it being scrapped. But at least he did say he would look into
it, because I do not think it is too late. You know, a month
ago we were throwing out numbers like 150,000, and now we are
over 200,000. So this is going to be our new normal, if we are
going to save lives.
So I yield back, but thank both of you for the information,
your honesty, and at least giving us hope. Thank you.
Vice Chairman Beyer. Congresswoman Beatty, thank you very
much.
I would now like to recognize Senator Cassidy for his
questions.
Senator Cassidy. Yes. Hang on. Got me?
Vice Chairman Beyer. Got you.
Senator Cassidy. Thank you all.
Dr. Goolsbee, I am struck because when people have asked
you about reopening the economy, it is always don't ask me, ask
somebody's mother, because mothers rule the world. Until they
are comfortable, they are not going to go to a vacation to New
Orleans and spend the night in a hotel. And so I am glad that
your research actually kind of coincides with the intuition I
have had my whole life. Mothers rule the world.
So it does seem like we have to get that down. Dr. Jha,
there has been some discussion as to the benefits of a Federal
response as opposed to a regional one, and full disclosure you
and I have collaborated on something in which a regional
response, collaborative if you will, between states would be
the operative way of doing it.
Would you like to comment on the relative advantage of a
regional response versus a Federal?
Dr. Jha. Absolutely, Senator. And thank you for that
question. So a couple of things.
First of all, I think we all understand and agree that the
virus spread at any given moment is regional. What New York is
experiencing today is different than what California is
experiencing today. The long history and the tradition of
public health in America has always been one where states lead,
and the Federal Government is standing next to the state
helping, providing guidance, providing resources. So I have
always believed that states have a fundamentally important role
in this process.
The problem here of course is that we have a global
pandemic. And so, for instance, things like testing, we think
about PCR testing, the testing we have been mostly focused on
the last six months, these have national and global supply
chains. So a strong Federal help and engagement is incredibly
helpful.
But I have certainly agreed on the thing we have
collaborated on, Senator, that having groups of states come
together is an alternative approach that can add, I think,
increase the right market conditions, can set the right
signals. I still think it would be very helpful to have a more
engaged and more effective Federal response helping the states,
but I have always believed that states have an important role.
They just, in many issues, cannot do it by themselves. But a
group of states coming together is an alternative----
Senator Cassidy. Let me ask you about that. One example
that we have used continuously at the Broad Institute, and the
Broad Institute was able to take existing resources and stand
up using a kind of plug-and-play type approach. Now all those
resources were available, and when Debra Burks came down to
Baton Rouge, and she would speak to that: listen, Thermo Fisher
supply is out there, and we can just use that instead of being
in these proprietary systems.
So it did seem as if she had a point, that there was a lot
of under-utilized capacity that could be employed within each
state prior to a Federal Government sort of trying to ``this is
how you do it.'' Indeed, you could argue that a state would
have a better sense of where you should be intervening than
somebody in Washington, D.C.
And so I asked that not to challenge but to explore.
Dr. Jha. So there are two parts to that, Senator. I
completely agree that states do have a good sense of where
their additional capacity is.
One issue is resources. A lot of states are feeling like
they cannot pay for things. If you look at the Broad, for
instance, which is doing a great job, their tests are being
paid for by private organizations. And so private universities,
Harvard, Brown, others are paying for testing there. The public
schools and the public universities are not. And so what it
does is it does bring capacity in when you have private
purchasers. But what we do is we create a very large divide
between who is able to access that and not.
Second, it is unusual. It is not clear that every state can
replicate a Broad. So I think part of the role of the Federal
Government is to create a certain evenness so not just a few
small states can do a fabulous job, but indeed a lot of other
states that do not have that kind of capacity can also come on.
Senator Cassidy. No, I would argue that the CARES packages,
which put out, you know, in my state they got $180 million for
testing, attempted to do that. But with that said, clearly we
still need more testing, so I will not argue with that.
Dr. Goolsbee, you may have addressed this partly in the
past, but I have been very concerned about the opportunity
cost. Children are extremely low risk of having complications
from COVID infections, and yet they are paying an incredibly
high price. Even the worldwide evidence shows they can safely
go back to school. And as best we can tell, there is no
documented case of a child transmitting coronavirus to their
teacher or the staff, particularly for primary school, but
apparently for secondary as well.
Any comments on the opportunity cost of locking down
elementary schools, which does not seem to benefit the public
health but cost them tremendously?
Dr. Goolsbee. Well, I do think that we need to think about
those opportunity costs. And I do think that the not being able
to open the schools has critical costs to the economy. I would
rather see the schools open than the bars open. No offense to
New Orleans. But I do think that is more important.
Senator Cassidy. Then can I ask you--because I have been
particularly concerned that lower-income families, with the
digital divide, and a parent that perhaps has to work, and less
familiarity with computers, is at a particular risk. And I do
think there is evidence, empiric evidence that the children
from lower-income families, even when given access to the
internet, are less likely to use it. Those at academic risk are
at increased risk, or increased risk in a virtual environment.
Any thoughts on that?
Dr. Goolsbee. I do basically agree with that. For a time, I
was on the Board of Education for the City of Chicago, and I
know that these issues of the digital divide make that shifting
education to an online sphere, there is a risk that it is going
to hit low-income people harder than high-income people, the
same way that it has hit low-income occupations harder than
high-income occupations.
The only thing I do not know, and the doctors on our panel
would have a better sense, my read of the evidence is that
definitely teachers can catch the disease. So you have got to
think about how the teachers----
Senator Cassidy. If I may, because I am about out of time,
I think the best evidence is that they are catching it in the
community, not from the school.
Dr. Goolsbee. And the kids can get sick. They have low
mortality, but they--in China, for example, they did get very
sick.
Senator Cassidy. I guess my point was, in closing, that the
opportunity cost of a 5- and 6-year-old kid from a lower-income
family is much greater than the extremely rare severe
complication from COVID in a 5- or 6-year-old. I think there is
a lot of evidence to that.
I am out of time, but if Dr. Jha would be--and by the way,
Dr. Singer, you are a great friend so I want to give you a
shout-out. Sorry I did not focus my questions on you. But I
yield back just because I am out of time. Thank you.
Vice Chairman Beyer. Thank you, Senator, very much.
I will now start a second round, and I will start. Dr. Jha,
four recent examples. Yesterday the CDC took down guidance it
had just put up stating that the coronavirus could be spread
through small particles, such as in aerosols. And in the
updated guidance, there is no reference to airborne
transmission.
And then last week they changed their testing guidance for
people without symptoms who had contact with an infected
person. And then we had the whole Caputo thing at HHS where he
talked about the deep-state scientists, and scientists and
sedition.
And then yesterday, Secretary Azar decided to take over all
the agencies within HHS, including the FDA.
Are you at all worried about the public distrust that comes
from all this changing guidance--the sense of political
manipulation probably by the White House?
Dr. Jha. Congressman, thank you for that question. You
know, there are two parts of the distrust that I worry about
immensely. The first is among doctors and nurses. We have a
long tradition of shorthanding a CDC or an FDA recommendation
as another way of saying this is the gold standard.
So when we say, for instance, oh, the FDA recommends this,
you do not have to explain what you mean, usually all you mean
is this is where the best scientific evidence is. That has been
a truism under Republican administrations, under Democratic
administrations. We have never worried about the scientific
credibility coming out of the CDC or the FDA.
That has changed in the last six months. And that worries
me immensely, because the great scientists of the FDA and the
CDC are still there. Thankfully, they have not left. They are
still doing great work. And unfortunately what comes out
increasingly from both of these agencies, and certainly the CDC
as you laid out, Congressman, is increasingly muddled,
contradictory, and against all the scientific evidence we know.
And so either these brilliant scientists have all of a
sudden stopped--you know, no longer know how to do science; I
doubt it. Or, something is muddling their ability to project
and explain to the American people what the fundamental issues
are around this virus. The issue about airborne is one of them.
There have been others, around testing. It is deeply
distressing, and I think it leaves American people unmoored
because they no longer know where to turn, where to trust.
And it will take us a very long time to restore the trust
in these agencies. We have got to stop doing that. We have got
to let the scientists of these agencies speak directly to the
American people. We pay their salaries through taxes. We
deserve to hear from them.
Vice Chairman Beyer. On the same issue of trust, the White
House Chief of Staff recently said the White House is aiming at
100 million doses of the coronavirus vaccine ready by the end
of October, which is now five weeks away. Is that safe, or even
realistic?
Dr. Jha. Well, so Operation Warp Speed, which has been a
program run by the White House that I have been enormously
supportive of, I think it in general has done a very good job
of ramping up production, has done so at risk, meaning without
even knowing whether the vaccines are safe or effective, has
produced these vaccines. And I think that has been the right
thing to do. Because once we have clear evidence of safety and
efficacy, we will not want to wait, you know--we would want to
wait as little as possible. So in general I think that is a
good thing: 100 million by the end of October is a much, much
higher number than I have heard.
I do not believe anybody knows when we will have, or ought
to know when we will have clear data on safety and
effectiveness. My best projection is that it will come in
sometime in November. And my best projection has been that we
will have tens of millions of doses by the end of this year. So
that number is really high, and out of what I have generally
heard from most people in the industry.
Vice Chairman Beyer. I want to thank you for making me feel
better about paying that Brown tuition, and for all the
research that you are able to do.
To pick up on something Doctor--or Senator Cassidy said,
there is no proven instance of children giving this disease to
teachers or parents. Why, then, are the school districts being
so careful in closing?
Dr. Jha. So this is complicated, and it is multi-factorial.
So first of all, I think there is no doubt in my mind that
younger kids are much less likely to spread this than older
kids. So I think most of the evidence says that older kids,
high schoolers essentially spread like adults.
The issue of why we do not have a whole lot of evidence of
that kind of spread is we have not had schools open in the
past. During the pandemic, schools have been closed. So of
course we have not had a lot of instances of kids spreading it
to parents.
Now we are opening schools, and we are about to find out.
This is incredibly frustrating, because the cost of keeping
schools closed and virtual is massive. It is massive on kids.
It is massive on parents. It disproportionately affects poor
and minority kids and families, and it disproportionately
affects women in terms of the labor force.
We can all talk about gender equality, but we know the
realities that women bear the brunt of this. So what we know
is, if we can lower the levels of virus in the community, if we
can speak with nuance to teachers, instead of sort of
blustering that everybody has to open, and if we can understand
the fears and address them through testing and through mask
wearing and improving ventilation in schools, I believe we can
get a majority of American schools open. But we have got to
build trust in people. We cannot bully them back into school.
It will not work, and teachers will not tolerate it, and
parents will not tolerate it.
So we just have to have a level of nuance we do not have
right now.
Vice Chairman Beyer. Thank you very much. To quote the
Chair of the House Education and Labor Committee, Bobby Scott,
who says we want schools open. We just want them opened safely.
Now let me recognize the Chairman of the Joint Economic
Committee, Senator Lee.
[No response.]
If Senator Lee is still there with us?
[No response.]
And if Senator Lee is not available at the moment, I am
going to move to the next Republican on the list, and the
Ranking Member from the House, Congressman Schweikert from
Arizona. David? We cannot hear you yet, but you are up.
Representative Schweikert. Let's see. Are we working now?
Vice Chairman Beyer. Yes.
Representative Schweikert. Could we continue on that line
of thought you were just having? One of the other weird little
side projects in our office has been trying to get a thought
about daycare, without schools opening. Is that almost like a
wall, a barrier to sort of step up economic activity? You know,
I see what we have gone through with a kindergartner and home
schooling until she could begin public schools this last week.
Has anyone actually, first, given that some thought, or
seen some modeling data that says we cannot grow--we cannot get
a certain sort of GDP economic expansion until we actually have
an ability for our children to be in schools or daycare?
Dr. Goolsbee. This is Austan Goolsbee. A hundred percent
that is a barrier for a lot of the workforce to come back to
work. And there have been a few labor economists that have been
trying to quantify that. I definitely think that you are onto a
critical element.
This question of what would it take to be able to reopen
the schools, and what would it take to be able to reopen
daycare and other child care options, for the median, let's
call it occupations at the median income and below, I think it
is critical, a tremendously critical issue because such a high
share of those occupations must physically be at their location
of work to do the job.
So I think you are on to something, and I can try to get
you some of the evidence that they have accumulated.
Representative Schweikert. That would be helpful. And this
is actually one of my great frustrations, from those out in the
Phoenix-Scottsdale area. We can see school districts backing up
to each other, they have different opening policies.
I despise anecdotes, but I am going to tell one. Having a
little girl who has started kindergarten, her first three weeks
of sitting behind a laptop, isolated, she was miserable,
begging ``Daddy, Daddy, please don't make me do this.''
This last week when she is now allowed to go to school in a
classroom, mask-wearing for everyone. It is as if I have a
different daughter. So I am assuming many of us have
experienced that.
How do we actually sort of have a world where it is not
politics, or lobbying, but it is actual math, saying ``here are
the things we do to keep the teachers and our schools safe,''
with an understanding of how important this is to the economic
expansion, economic survival, of our country?
And share with me. Go ahead.
Dr. Goolsbee. Congressman, who goes first?
Representative Schweikert. Let's do Jeffrey first, and then
the Professor.
Dr. Singer. Well I was just going to say, a part of the
problem is to get the teachers to overcome their fear. There
was some--for example, Taiwan, which you talked about, has a
success story. To my knowledge, they never closed their
schools. Many schools in Europe have had their schools, at
least for K through 6, the grade school, they have had them
open for months and there have been no reported problems.
And then here in the United States, for example, during the
worst time of the outbreak in the New York Metropolitan Area,
the department of education and I think just New York City had
daycare for their first responders, and there were no reported
outbreaks with these children in daycare centers, which, you
know, that should calm a lot of fears.
Nevertheless, what we see happening is, in many instances,
the teachers themselves are saying, ``I'm not comfortable going
back.'' So part of it is having them, having their fear
managed.
Representative Schweikert. Thank you, Dr. Singer.
Professor.
Dr. Jha. So I have spent more time on this topic than any
other in the last three months. I've probably spoken to a
hundred different teachers' groups, school superintendents,
mayors, governors, on this. A couple of things.
First of all, Dr. Singer is absolutely right that many
European countries, Taiwan, has been able to open up. The
levels of virus in their community were such that it was much,
much lower than our American average. But nobody lives in
America. People live in Arizona, or Texas, or Massachusetts. So
we have to look at local community spread. And I think about a
third of the country could go back to school quite safely,
given the level of spread.
In another third, we do need to bring it down a little. You
could open up K through 6 quite easily now. But for older kids,
you want to have that virus level a little bit lower.
Everybody has got to wear a mask. And in other parts of the
country, the virus levels are so high that we really do need to
work on bringing it down.
And again I would close bars, and I would close indoor
dining before I closed schools. That is a priority and value
judgment that I would make. If we did this, and if we took this
with nuance as opposed to bluster of--I find myself in the
mornings arguing how to open schools, and in the afternoon
trying to explain to people why you can't open schools. And
people are like what side are you on? I'm like, the data. We
have the data. I think we can get most schools open if we let
the data drive our decision making.
Representative Schweikert. Mr. Chairman, thank you for your
patience. I have become quite convinced that for those folks in
Maricopa County, we are seeing some very good numbers right
now. There is a path to having our schools safely opened, and I
think we know it. They fear this, they fear that, and if those
on the left, those of us on the right, could come up with a
common language to mitigate fear and move to facts, I think it
would be very powerful to the economics of this country.
So with that, I yield back, Mr. Chairman.
Vice Chairman Beyer. Thank you, Congressman Schweikert,
very much. I now recognize Congresswoman Joyce Beatty from
Ohio.
Joyce is still with us?
[No response.]
Give her another couple of seconds here. Is Senator Lee
with us, I ask again.
[No response.]
And let me move, how about--thank you for your patience.
Both Houses are voting this afternoon, and so they go back and
forth and back and forth. Is Congressman LaHood from Illinois
with us right now?
[No response.]
And finally I am going to try another doctor, Doctor
Senator Cassidy? Did you hang around for a second round?
Senator Cassidy. I sure did.
Vice Chairman Beyer. Senator, the floor is yours.
Senator Cassidy. Thank you. Let me see if I can get my
video going, not that you care to see me [laughing].
But, Dr. Jha, we do need to distinguish. You say some
schools should, and some schools should not, but we really need
to distinguish between K through 6, for example, and high
school. An 18-year-old is an adult, effectively,
physiologically in terms of infectious disease. But it does
seem like primary schools is much less.
And I say that because, again going back to the opportunity
costs of a 5-year-old in an inner city or rural setting in
which parents do not have access, or if they do, lack
familiarity. It does seem as we say ``schools,'' you speak of
nuance, we should be nuanced that it is K through 6 that we
feel, or K through 8, that we feel freer about.
And you just mentioned, Dr. Singer, like there have been a
million kids in Quebec that have gone back to school, and I
think 0.031 percent have been infected. And all the children in
other countries that we have mentioned. So although the U.S.
does not have the data, there is data worldwide. So going back,
my point being would you agree that when we say ``schools,'' we
must speak with nuance and not just say ``schools,'' but
differentiate primary versus secondary?
Dr. Jha. Yes, Senator, absolutely. Absolutely. So let me
say two things about this. You know, we in our tracking that we
do on global epidemics dot org, we split the country into
green, yellow, orange, and red. Everybody in green zones--there
are not that many of them--should be back in school. In yellow,
probably everybody can go back. Definitely K through 6. High
school, we can. In orange, we have actually argued that K
through 6 should go back. And that gets you a vast majority of
the country.
There are some places--now we can talk about Quebec and
Europe. They never opened up schools with the kind of case
levels that we have had in some parts of our country. And so
that would be, in my mind, not based on what the evidence or
experience of other places have been.
And I am much more, based on the modeling data, I am much
more hesitant in places with very large community transmission
happening, but to say it is totally fine for a 5th grader.
Senator Cassidy. So this goes back to the opportunity
costs, because if the 5th grader stays at home and not be
evaluated by the school psychologist to look for abuse, not to
get the meals, not to have the in-person instruction, and
basically probably not get any instruction whatsoever for still
extremely low risk of infection or serious infection, extremely
low risk, it just seems like we have a tradeoff.
Dr. Goolsbee, it was interesting, earlier he said it is
rare that an economist advocates wearing a mask. But I think we
need more doctors advocating open up, because of the
opportunity cost of the children, particularly the younger
children, staying at home.
Dr. Singer, do you want to weigh in on that?
Dr. Singer. Yeah, that is sort of what we call the unseen,
you know, the costs that are not seen as opposed to what is
seen. And, for example, as you know, Dr. Cassidy, there are
crucial actually periods of development, psychological
development, cognitive skill development, social development,
and quite a lot of these very young children are missing out
on. And some of this could be very difficult to make up.
And then of course there are also the social determinants
in health. Some children come from households where they are
subject to child abuse or neglect, where they do not get proper
nutrition, and this is provided for them in the school system.
So these are all other costs that are not being taken into
account.
And I personally, I saw just the other day the CDC's latest
estimates of infection fatality rates, not case fatality rates,
and I think the estimate, if I remember correctly, was 0.0037
percent infection fatality rate for children under age 18. So
you need to kind of put everything in perspective and balance
what is the risk of them dying from a COVID infection versus
the risk of them dying from child abuse or neglect.
Senator Cassidy. So, Dr. Goolsbee, let me, again in full
disclosure, my wife is on the board of a school for children
with dyslexia. And most of the children come from less well-off
backgrounds. Illiteracy is of course is a major risk factor for
future involvement with the criminal justice system. Illiteracy
is a major risk factor for incarceration, future incarceration.
And if you look at the reading scores, children of color by
grade 3 or 4, 50 percent of them are reading below grade level.
So again I go back to, I think we are in agreement. I think I
am just pushing this point because--Dr. Jha, I am going to
disagree with you. I am going to say, on this I will disagree,
and I like Dr. Goolsbee with his experience with the Chicago
educational system. If you have a 5-year-old from an
impoverished background, and she or he is not in school, you
are going to affect their future life. Possibly, in fact indeed
probably increasing their risk for future incarceration, for an
extremely low risk of infection on these complications of
infection.
So I keep feeling like we are being so careful about the
spread of disease that we are being less careful--and I do not
want to put words in your mouth, Dr. Jha, I have respect for
you--less careful about the long-term consequences of a child
not being in school. And I apologize because that was an unfair
characterization, although I think you did say in the red zone
you would still be nervous about primary school children
attending.
But, Dr. Goolsbee, why do you not speak, and then I will
give Dr. Jha the last word.
Dr. Goolsbee. Okay, as I said at the beginning, I am quite
sympathetic with the concerns about what you are calling the
opportunity costs. We do still--and we do still need to, even
if the kids themselves get sick, the fatality rate is low, we
need to monitor whether they are coming home and getting their
grandparents infected. If they are not, then that goes into the
math category of here are behaviors that we can open up and
allow without increasing the rate of spread of the virus.
It sounded like what Dr. Jha was emphasizing is that in
places that are in the red, and there is high community
transmission, there might be an elevated risk that the kids
themselves would not get sick, but they would come home and get
mom and dad sick, and maybe brother and sister sick. And, that
that kind of goes back to our critical thing about what is the
number one rule of virus economics. You have got to slow the
spread of the virus.
And in countries where they have got low rates of
infection, they have gone back to school. And I do think that
is critically important, especially in these unequal times.
Senator Cassidy. Dr. Jha.
[Pause.]
We cannot hear you.
Dr. Jha. Sorry. You would think I would know this by now.
The last thing I would say is, two quick things.
First of all, we have not seen any place that has really
tried to open up schools in that kind of red zone, but one
place that did try it a few months ago was Israel and they
ended up having pretty large outbreaks. I believe in data. We
have got a lot of evidence to drive this thing.
The other part of this is that schools are not just run--
don't just have kids. They have adults. And adults can transmit
to each other, and teachers can transmit to other teachers.
I agree that we do not have a lot of evidence to show that
that has happened. What I would like to see is, if we are going
to try those places, be very honest with people that we do not
have a lot of evidence. Get everybody to wear masks, and
collect data very, very carefully.
I also think, let's get the red zones into orange and
yellow zones by closing bars, by getting people to wear masks,
by improving testing, and then we can stop even disagreeing
about the red zones because we will all agree that getting
especially younger kids, but probably everybody, back to school
is clearly the right thing to do for kids, parents, and
everybody else.
Senator Cassidy. Thank you, Mr. Chairman. Thank you for
your indulgence. I yield back.
Vice Chairman Beyer. Thank you, Senator, very much. I now
recognize my friend, the Congressman from Maryland, Mr. Trone.
Representative Trone. Thank you, Mr. Chairman. I appreciate
it.
As a fellow businessman, I am concerned about the grave
impact the pandemic has had and will continue to have on small
business. In July, I co-sponsored a Jobs and Neighborhood
Investment Act with Senator Warner on the Senate side, to
invest $18 billion in low-income and minority communities that
have been hit the hardest.
The bill provides funding and support to minority finance
institutions to expand the flow of credit and prevent permanent
damage to these communities.
Dr. Goolsbee, do you see a connection between the
devastating impact COVID has had on Black, Latino, other
minority communities and the accelerated losses we have seen
among minority owned businesses?
And also, secondarily, how do we craft responses? How
should we craft responses to respond to these policies that
address the systemic inequities?
Dr. Goolsbee. Well your first question is easy to answer. A
hundred percent yes, I think those are highly related. That the
communities where you have seen the impact of the disease will
be among the highest among communities of color, and lower-
income communities. Those are very much places where the job
impact has been the most negative, and where the income impact
has been the most negative.
On the second question of what do we do about that, that is
a harder one. In the short run, as I said, I think you have got
to stop the spread of the virus, everything you can on the
public health side. And I believe that you have got to provide
continued relief and rescue efforts to prevent permanent
liquidation and permanent damage from what is supposed to be a
temporary health shock.
So I would still emphasize those two points. In the longer
run, these issues of racial inequality and income inequality,
there are a lot more moving pieces as you know, and so I
probably should not weigh in on that in this spot.
Representative Trone. So, Dr. Goolsbee, to continue on the
same line of thinking, before the pandemic people reentering
society from incarceration had significant barriers to labor
markets. Seventy-five percent formerly incarcerated still
unemployed a year later. Impact particularly felt by justice
impacted Black and Latino communities when the unemployment
rate was 3.4. Before the pandemic, we had a huge untapped
resource to help fill jobs.
One ACLU report notes we lose between $78 and $87 billion
for our Gross National Product by excluding the formerly
incarcerated from the workforce. And that is why I introduced
the Workforce Justice Act, to ban the box on employment
applications.
When we create hiring practice inclusive of people with
criminal records, we all benefit. Now we are facing
unemployment rates in double digits for Black and Latino
populations. Simply put, too few jobs for too many job seekers,
and we know which populations are most vulnerable to being left
out.
So in this recovery, how do we ensure our unemployment
policies do not continually focus the same way, but fully
include Black and Latino populations, but also the justice-
impacted individuals? And why is it so important to be
inclusive in our employment policies? And what are those
economic benefits?
Dr. Goolsbee. Well you have got a lot going on there,
Congressman, and I appreciate and I applaud your efforts to try
to reincorporate the formerly incarcerated into the workforce.
In both the education space--I am on the board of the Lumina
Foundation in Indiana that tries to increase educational
attainment in the United States, and they have identified the
formerly incarcerated as an important category of people where
training can be useful.
It is not my specific area of expertise. I know there are a
number of economists that have looked at what policies are most
effective, and incorporating them back into the labor market.
I do know that, as you highlight, in a period where we are
going to have very substantially elevated unemployment rates,
it is going to have a disproportionately negative effect on
anybody that was on the fringes of the labor market before this
crisis began.
So think of it as: if you are formerly incarcerated, as
hard as it is to find a job when the unemployment rate is 3.5
percent, imagine how hard it is going to be to find a job when
the unemployment rate is 8.5 percent.
So I do think that that at-risk groups and hard-hit groups
in this recession, we have got to make a concerted effort to
both slow the rate of spread of the virus, and make sure that
the recovery is widespread; that it is not what I would
characterize so far as rapid rebound among occupations where
you can do your job over the computer, which tend to be higher-
income occupations.
That has characterized much of the recovery so far, and I
do think that we have got to be really concerned about that.
Representative Trone. Doctor, thank you very much. And as a
Wharton grad, I hope you lose that Chicago Booth before----
Dr. Goolsbee. Oh, no.
Representative Trone. You are killing us. I yield back.
[Pause.]
Dr. Goolsbee. Is everyone muted, or am I muted? This is one
of the--you cannot tell whether you are the one who is frozen,
or everyone else is frozen.
Dr. Jha. E are all just waiting to see if Congressman Beyer
or Senator Lee come back.
Ms. Volk. Hey, everyone. So Senator Lee had to step out, so
that is going to be the end of the hearing. Thank you all so
much for coming. Apologies for any sort of technical
difficulties, but thank you all so much for coming, and have a
wonderful afternoon.
Dr. Jha. Bye, everybody.
[Whereupon, at 4:25 p.m., Tuesday, September 22, 2020, the
hearing was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Hon. Donald Beyer Jr., Vice Chair, Joint Economic
Committee
Today's hearing will be unlike almost every hearing ever held by
the U.S. Congress Joint Economic Committee.
Most often, our hearings explore economic issues. Today, we will
focus on public health.
When the explosion of coronavirus cases in March caused massive
unemployment in April, JEC Democrats reached out to some of the most
prominent economists and public health experts in the country.
Two Nobel-prize laureates, two winners of the John Bates Clark
medal, five former Chairs of the President's Council of Economic
Advisers and three former Presidents of the National Economic
Association--over two dozen in all.
Every one of them conveyed the same urgent message--the top
priority for healing our crippled economy is to contain the
coronavirus.
Economist Austan Goolsbee, here with us today, has put it this way:
``the number one rule of virus economics is that you have to stop the
virus before you can do anything about economics.''
cases and deaths
And yet, tragically, we have failed to control the coronavirus.
Two hundred thousand Americans are dead--more than in World War I,
the Korean War and Vietnam combined.
The United States has only 4% of the world's population but
approximately 21% of worldwide deaths.
There have been almost 7 million confirmed cases of COVID-19 in the
United States--this likely is a severe undercount.
And the number of cases continues to explode, with about 40,000 new
positive tests a day.
the economy has been hit hard
As a result of this crisis, our economy has suffered a severe blow.
There are nearly 12 million fewer jobs today than in February.
The official unemployment rate is 8.4%--almost two and a half times
what it was in February.
Federal Reserve Chairman Jerome Powell says that the actual rate
could be 3% higher due to problems with misclassifying workers and
differentiating those who have left the labor force from the
unemployed.
3.4 million U.S. workers are now permanently unemployed--and the
number is rising.
Almost 30 million depend on an unemployment check to survive.
the president is the problem
Two hundred thousand deaths, economic devastation, a contagion
still out of control.
Tragically, no one person in our country is more responsible than
the person who should be leading the fight to contain the coronavirus.
The President of the United States.
the president's lies cause preventable deaths
President Trump's record on the coronavirus is a stunning mix of
incompetence, ignorance and callous disregard for human life.
He lied to Americans, telling them that the virus was a
``Democratic hoax'' and that it would ``magically disappear.''
At the same time, he privately admitted to Bob Woodward that the
coronavirus was five times as deadly as serious strains of the flu--
``deadly stuff.''
the president refused to take action quickly
The President should have used the early weeks of the crisis to
test for and trace the virus, purchase PPE and ventilators, and to
educate the public about the steps all Americans should take to protect
themselves and others.
However, it took more than seven weeks after the first confirmed
case in the United States for him to declare a national emergency.
If America had moved a week or two sooner to implement social
distancing measures, it would have saved tens of thousands of lives,
according to research from Columbia University.
trump ignores public health experts
The President ignored the advice of public health experts. He said
that he knew more about public health than they did.
He mocked people who wore masks and he refused to wear one, despite
the fact that masks can play an important role in slowing the spread of
the virus.
He endangered people's lives by promoting the use of
hydroxychloroquine, which has been shown by scientists to have no
impact on treating COVID and carries substantial risks.
He recommended injecting disinfectant to fight the virus--and
sadly, some Americans did.
He claimed that children are ``almost immune.''
In every case, the President was wrong--dead wrong.
trump pushed aggressively for premature reopening
Public health officials argued that reopening prematurely would
lead to a second wave of infections and deaths.
But the President ignored them. He said in March that ``we cannot
let the cure be worse than the problem itself.''
He goaded governors to reopen the economy.
He told Americans that public health measures were tyranny: he said
to ``liberate Michigan'' while supporters demonstrated (with guns) at
state capitals.
And he held large political rallies, defying experts, who warned
that these could become super-spreading events.
As a result of these reckless and callous actions, coronavirus
cases spiked and people died.
The number of new infections on Labor Day were double what they
were on Memorial Day. Forty thousand new cases per day.
the president's gamble
The President's insistence on prematurely reopening the economy had
a self-serving purpose--to make the economy look stronger in the months
leading to Election Day.
As Washington Post columnist Catherine Rampell pointed out back in
April, it was a big gamble--a gamble with American lives. A gamble with
the U.S. economy.
The gamble already has resulted in more cases and more deaths, but
in the short term it made the economy look better.
Between May and August, the economy regained about half of the jobs
lost.
The unemployment rate dropped from almost 15% to 8.4%--still about
2.5 times higher than in February.
The President is betting that the next jobs numbers, when they are
released next Friday, will continue to show marginal improvement--
. . . And that the cost of reopening too soon won't be obvious
until after the election.
While we don't know what the numbers will reveal, one thing is
certain: the true impact of the President's gamble won't be evident
until it's too late.
trump's economic legacy
Donald Trump holds the vast power of the U.S. Presidency--but he
has refused to use it.
He has not contained the coronavirus, but has unleashed it.
As a result, many more lives will be lost.
And in the long term, the economy will suffer.
The President's failure to make even the most meager effort to
contain the coronavirus is his economic legacy.
I look forward to the testimony of our witnesses.
__________
Prepared Statement of Hon. Mike Lee, Chairman, Joint Economic Committee
Thank you, Vice Chair Beyer, for chairing today's hearing on this
important topic.
The novel coronavirus, as it has swept across the Nation and the
world this year, has left a trail of devastation in its wake. It has
imposed not only serious physical disease, but severe economic ills, as
well. Jobs have been lost, businesses have been shuttered, and whole
sectors of industry have been disrupted.
In response to such an unprecedented crisis, we have taken
unprecedented government action. But, as in the successful treatment of
any illness, we must first make sure that we are using the proper
remedies.
So as we take stock of our response to the current pandemic, we
should consider how policy has both hurt and helped so far, and what we
can improve to have the right solutions going forward--for this public
health crisis and the next.
While some have called for a still more aggressive Federal response
through more stimulus, a nationally coordinated response led by the
Administration, and more widespread lockdowns, the benefits of such
policies must be weighed against both their economic costs and their
unintended consequences.
For instance, we know that large-scale stimulus exacerbates our
already whopping national debt and can crowd out private investment.
Additionally, the enhanced unemployment benefits included in the CARES
Act provided a disincentive for those who are unemployed to return to
work, thus inhibiting economic recovery.
In addition to economic devastation, lockdowns have had other
negative effects. Mandated isolation has spurred or worsened mental
health issues for many people, and stopped others from getting routine
health screenings and vaccinations, causing death or illness that
otherwise might have been prevented.
In fact, as the second wave of the coronavirus has been rebounding
across Europe, the continent's governments are now intent on avoiding
large-scale lockdowns and instead focusing on tailored, localized
measures to combat outbreaks, based on the knowledge we have today on
how to best manage infections.
Finally, we ought to make sure that the Federal policy is not
inhibiting sound and effective solutions. Unfortunately, evidence shows
that it already has--especially in the early days of the crisis. For
instance, outdated ``Certificate of Need'' rules prevented hospitals
from acquiring new beds and equipment; and the FDA and CDC laws against
at-home testing posed an early barrier to disease control. But perhaps
the worst failure of all was that the sheer bureaucratic chaos that
fatefully delayed effective testing for an entire month.
Thankfully, we have already removed some regulations that were
impeding a more effective pandemic response. Two important changes have
been allowing doctors to practice medicine across state lines, as well
as allowing doctors to provide telemedicine. This is exactly the kind
of regulatory flexibility we should consider going forward so that we
can quickly, creatively, and freely administer care to those who need
it.
As we continue to respond to the coronavirus, we must acknowledge
the ways that sweeping, centralized, ``one-size-fits-all'' government
policies can ultimately worsen our attempts at recovery.
If we are to have flexibility and resiliency--in the face of this
crisis and the next--we ought to instead empower our states and
localities, who best understand their own resources, needs, and
communities.
The American people have always played a critical role in governing
locally, volunteering, and innovating to respond in times of crisis. I
look forward to hearing our panelist's contributions today as to how we
can continue doing just that.
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