The Federal Reserve announced a remarkable new step to combat the economic upheaval from the coronavirus pandemic Thursday morning: For the first time ever, it will lend directly to state governments, local governments, and municipalities, by buying up to $500 billion of the bonds they issue.
Since the start of American lockdowns to contain the virus, the Fed has announced a raft of new measures to provide cheap lending to the financial industry, corporations and businesses, all in an effort to keep the economy afloat. These included offers to buy limited categories of state and local bonds from secondary dealers and markets. But this new program will buy those bonds directly from the governments that issue them. For each individual government, the Fed will lend them up to 20 percent of their revenue for 2017; and in total the Fed will lend up to $500 billion. Thanks to a sign-off by the Treasury Department, the Fed will also buy bonds with a maturity of up to 24 months. (Under its own normal powers, the Fed is limited to buying state and local debt of six months or less.)
This is much further than the central bank ever went in response to the Great Recession. Various policymakers and activists have been pushing the Fed to cross this bridge for a while. States, localities, and municipalities cannot borrow from private markets the same way the federal government can, and when economic downturns hit their tax revenue, they’re forced to cut their spending. That dynamic made the hole from the 2008 collapse much deeper than it otherwise would have been. This morning’s announcement is an effort to prevent that from happening again. Jeff Spross
Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, is backing the idea that the United States' coronavirus death toll may end up lower than previously projected as a result of successful social distancing.
Fauci, member of President Trump's coronavirus task force, spoke to Today on Thursday after the University of Washington's Institute for Health Metrics and Evaluation revised its estimate for the country's coronavirus death toll to about 60,000 by late summer, still a sobering figure but down from a previously-estimated 94,000, although The Washington Post notes the model's accuracy is in dispute, and it it only goes to August. The White House last week shared projections suggesting between 100,000 and 240,000 people could die in the United States from COVID-19.
Asked on Today if he now believes the U.S. death toll will fall "significantly" below the 100,000 to 240,000 range, Fauci responded, "I do," citing the fact that Americans have done a "really terrific job" adhering to social distancing guidelines.
"I believe we are going to see a downturn in that, and it looks more like the 60,000 than the 100,000 to 200,000," Fauci said. "But having said that, we better be careful that we don't say, 'Okay, we're doing so well we can pull back.' We still have to put our foot on the accelerator when it comes to the mitigation and the physical separation."
Indeed, the Post reports that the IHME model "assumes the maintenance of social distancing measures through May."
Officials like U.S. Surgeon General Jerome Adams had previously said they anticipate a lower death toll than previously estimated while stressing it's crucial to continue social distancing measures to achieve that result. New York Gov. Andrew Cuomo (D) sounded a similar note on Wednesday, saying that while the hardest-hit state looks to be flattening the curve, "it's not a time to get complacent," and "if anything, we have to get more diligent, not less diligent." Brendan Morrow
Senators will either have to return to Washington or get negotiating to get the next round of coronavirus relief funding flowing.
With just four senators in the chamber on Thursday, Sen. Ben Cardin (D-Md.) blocked a unanimous voice vote in favor of Senate Majority Leader Mitch McConnell's $250 billion small business loans bill. Cardin called the bill a "political stunt," and reflected congressional Democrats' demands for great accountability and diversity in how the bill would be spent.
Cardin's opposition didn't come as a surprise, seeing as Senate Minority Leader Chuck Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) unveiled Democrats' demands for the bill on Wednesday. They'd like to see that $250 billion doubled, with an extra $100 billion going to hospitals, community health centers, and health systems; $150 billion for state and local governments; and an additional 15 percent support added to SNAP food stamp benefits. They also demanded that half of the small business loans "serve farmers, family, women, and minority and veteran-owned small businesses and nonprofits in rural, tribal, suburban, and urban communities."
Senators have largely scattered back to their home states amid the COVID-19 pandemic. Without a provision for remote voting, any actions Congress wants to take have to be done without opposition. Kathryn Krawczyk
The COVID-19 pandemic may change everything about this 2020 presidential race — including its now-presumptive Democratic nominee.
Sen. Bernie Sanders (I-Vt.) suspended his 2020 run on Wednesday, leaving former Vice President Joe Biden as the only remaining Democrat in the race. But even though there are major ideological differences between Biden and Sanders, "the plague has changed everything," former Democratic senator and two-time presidential candidate Gary Hart tells Politico.
The new coronavirus pandemic has spurred trillions of dollars in federal spending with more sure to come, including the funding of public welfare programs that wouldn't be out of place in Sanders' democratic socialist platform. That, combined with the current economic and health care crises, should push Sanders to recognize that ideological differences between himself and Biden have become obsolete and that beating President Trump is what matters most, Hart told Politico. Debates between progressivism and centrism mattered in January, but now, "Joe Biden may end up being Bernie Sanders squared just by circumstance," Hart said.
Like Sanders, Hart "mobilized a younger generation of voters while losing the nomination" in both 1984 and 1988, as did Howard Dean in 2004. Dean recommended Sanders campaign wholeheartedly for Biden through the November election, telling Politico "what Bernie does will make a difference." After all, Dean told Politico that he "worked my ass off" after losing the nomination to John Kerry — not that it turned the tides in the end. Kathryn Krawczyk
Amid the coronavirus pandemic, the Labor Department has just come out with more staggering unemployment numbers.
An additional 6.6 million Americans filed initial unemployment claims last week, the Labor Department said on Thursday. This nearly matches last week's record number, which has now been revised up to 6.8 million. The week prior, about 3.3 million Americans filed unemployment claims.
Each of these past three weeks has far exceeded the pre-coronavirus record of 695,000 unemployment claims filed during a week in October 1982, and they add up to more than 16 million Americans having filed for unemployment during that time.
"The number of jobs lost in a mere three weeks now exceeds the 15 million that it took 18 months for the Great Recession to bulldoze in 2007-2009," Politico reports. In fact, these numbers show that "more than one in 10 workers have lost their jobs in just the past three weeks," The Associated Press notes.
The Bureau of Labor Statistics recently reported that the unemployment rate climbed to 4.4 percent in March as about 700,000 jobs were lost; an almost 10-year record of monthly job gains ended as businesses closed around the country amid the coronavirus pandemic. But considering this number was based on a survey taken up until the middle of the month, economists at the time warned to brace for the worst in the May report. Brendan Morrow
Disney+ just months after its launch has reached a milestone analysts once thought would take years.
Disney's streaming service now has 50 million paid subscribers worldwide, the company has announced. This, The Hollywood Reporter notes, means Disney+ already has almost one-third of Netflix's 167 million subscribers.
Before Disney+ debuted, The New York Times reports, analysts thought reaching 50 million subscribers would take until 2022. Disney itself had the goal of amassing between 60 million and 90 million subscribers by 2024, but it "may hit that target four years early," Variety writes.
Disney+ launched in November in the U.S. with a catalog that included originals like the high-profile Star Wars show The Mandalorian, although its selection of original content has been fairly light since that show wrapped its first season. The Times notes analysts believe families being stuck at home in coronavirus quarantine desperate for things to watch has helped Disney maintain and grow its subscriber base, even as other parts of its business like theme parks have suffered. Since its U.S. launch, Disney+ has also recently become available in other countries like the U.K.
In recent weeks, Disney has been among the studios breaking with its protocol for releasing movies on streaming, debuting Frozen II on Disney+ months early, as well as making Pixar's Onward available for streaming less than a month after it was in theaters. Disney also recently announced that its upcoming movie Artemis Fowl will skip theaters, which remain closed in the United States, and instead debut on Disney+, a step chair Bob Iger has teased may be taken with "a few more" films.
As far as the original Disney+ shows go, a second season of The Mandalorian is expected later this year, and Marvel series like The Falcon and the Winter Soldier are coming as well, though the coronavirus pandemic may or may not cause them to face a delay. Brendan Morrow