Zoom, director of Economic Policy at the Heritage Foundation and will serve on the coronavirus Recovery Commission. What questions will you try to answer . Guest thank you so much for having me. I have to extend the thanks to my older son amos. Normally we are doing socially distancing math so he gets to skip that. Host i hope you pick it up later in the day. Guest we will say what happens see what happens. We have to prioritize folks getting back to work but only when it is safe, and that is the preponderance of the advice from Economic Experts and literature. There was a study done by m. I. T. Economists looking at the 1918 flu pandemic and they found in city is that instituted Good Public Health policy, the economic recovery was much faster than areas that did not institute Good Public Health policy like social distancing. Not only does Good Public Health policy push down mortality but it negates the longterm effects of the pandemic. Americans and businesses across the country are looking for certainty. Americans are losing jobs every day. Businesses remain closed. Main street and walmart are looking for ways to change their operations. You are speaking later today with the chamber of commerce. I am sure this is forefront on their mind. There was a report last week about by the bureau of labor statistics suggesting the Unemployment Rate for weeks ago was 4. 6 . If we just that adjust those numbers for the claims that have come in the last two weeks, more claims will be coming in while i am on that program this program, the real Unemployment Rate is probably in the ballpark of 10 to 14 . The Unemployment Rate today is probably as high as since the Great Depression and experts think it might go higher. Janet yellen said this week she thinks unemployment could reach Great Depression levels by the time this is all said and done. The Unemployment Rate could get. Nto the ballpark of 20 to 25 forecasters have suggested the economy will contract on a yearoveryear basis as much as 6 . What is not known now is how we will experience a recovery once we suppress the pandemic. In other words, will we experience a vshaped recovery like your favorite vacation spot on memorial day weekend, or a w shaped recovery where we come back out of it and go back into it sometime this fall, or will we experience an lshaped recovery where we are in a prolonged recession and ultimately recovery . Those are the Big Questions that are obsessing policymakers in congress and the white house, and state and local governments. Those are the main questions that this commission is going to consider, how are we going to get ourselves back on this path to recovery . It is a societal problem. We need all aspects of society to be engaged. Policymakers,l state policymakers, and the private sector and society. The committee brings together individuals, folks who are experts in Disaster Mitigation in response, folks from the Education World and also the faith community. We will be meeting and issuing an interim report at the end of this month to provide recommendations, and we will issue a final report sometime in early june. Thoughlity is that even the timeline seems to be givenely short right now, the responsiveness of governments at every level to suppress the pandemic, we will probably be dealing with the consequences and aftereffects of this for some time. What this commission will be doing is thinking about some of those hard problems to help as we move between the different phases of recovery from the coronavirus pandemic. Host paul winfree, our guest from the Heritage Foundation, taking your phone calls. 202 7488000 in the eastern and central time zones, 202 7488001 mountain and pacific time zones, and Small Business owners, 202 7488002. You can start calling in as we continue with paul winfree. You were talking about the various shapes of the recovery. How soon will we know whether it is a vshaped or perhaps an lshaped recovery . Guest i dont think we will really know until sometime this fall. As i mentioned very early on in this statement, the right thing to remember is Good Public Health policy is good Economic Policy, and returning back to normalcy is not something that will happen in the next few weeks or even months. If we rush back into it, opening up, we could end up pushing ourselves into a deeper recession or depression at some point later this year or next year. That is what we want to avoid, so we need to make sure we are suppressing the virus, that we are containing it, that we are stopping the spread, and that we are rolling out different Public Health strategies including increased testing and containment. Sureway, in order to make we are defeating this so we can start to bring parts of the economy back online, on a rolling basis. As i mentioned also, this is a societal problem. It is not a solution the federal government can hand down, or even state governments per se. This names to be handled on an extremely local level. Local Health Officials are currently extremely strained and stressed. They are running out of resources and they are their role in all of this is critical. They will be doing the testing, and their success is critical on how quickly we are able to get the economy back up and running again, and their success is also dependent on whether or not we are able to escape a prolonged recession and recovery. Host from wister, massachusetts, this is scott. , massachusetts, this is scott. Caller if the coronavirus is going to return in august or early 2021 and we still dont , what areution for it we going to do economically . Are we going to shut down again . Untils a constant problem we have a solution for the virus. Guest look, that is exactly right and that is the main question on the forefront of the minds of virtually every american and business owner, small, medium, and large, thinking of how to mitigate the shortterm effects and change their Business Operations to deal with this new normal. The reality is that our ability to stop the spread and to test and to trace honestly comes back to resource capacity, and the ability of local Health Officials to be engaged with the population and be able to think strategically about how to bring different segments back online as it is adequate to do so. The worstcase scenario is that we rush back into essentially normalcy and then we find ourselves reacting to a return of the disease or to a new Inflection Point where the disease comes back in a big way, and that could lead to a more prolonged shut down in the future. Right now, we seem to be in an eight to 12 week window. Public Health Officials at every level are continually evaluating both the evolution of the disease through that period. We are learning new things about the disease every day, and also new Public Health techniques and resources are becoming available. Every day, we have new types of tests in the pipeline. Several universities are working on a test you can take it home with just a qtip swab of your mouth and put it into a plastic bag and mail it away and see whether you test positive. It is critical that we get all of that stuff online this summer in order to get to a point where later in the summer or potentially early in the fall we start to be able to bring big segments of the economy back online as we are evolving to this new normal. I cannot overemphasize the fact that i dont think that we will totally be back to normal for some time. Willnk that restaurants continue to have to focus on takeout and delivery for an extended period of time. Folks who can, do work from home, which is not everybody. Most folks cannot do work from can will have who to situate themselves into this new normal. The big question for me is when can we start bringing big sectors of the Manufacturing Base back online and when can we think about testing for folks who work in those environments on a more regular basis so that we make sure they are safe, so that we make sure their employers do not run into liability issues, and so that ultimately we can make sure that our economy gets back up and running as quickly as possible, and that we avoid a prolonged recession or depression. Host paul winfree, our guest in this section of the washington journal. We have the special line for business owners. Greg is on that line in missouri. Caller i am a Small Business owner and have been for 30 years. I have 15 employees. We tried to get a loan from wells fargo and we could not even get an application. We tried other things and they did not accept us because we do not have an account. What other avenues do we have so i dont have to lay off my employees . The governor is putting all sorts of construction restrictions. Guest this is a big problem. Inare hearing from folks similar situations all across the United States. On the previous segment, there was a comment made about how quickly they got this program online. I believe the congressman from North Carolina referenced it, and that is true. In any given year, the Small Business administration processes about 12,000 of these loans for a total of about 30 billion. The program was extended in the cares act that was enacted a couple of weeks ago and it increases the total amount available from about 30 billion to 350 billion and only doubles what Small Businesses are relying on is the banks to put forward the money at the frontend, and be reimbursed on the backend. What you experience is some banks are reacting to that by saying i cant take on the risks associated with putting this money out right now that will essentially turn into a grant. I need some risk aversion techniques that or ability for the federal government to take on some of this risk off of my port folio. I think thats exactly what they are working on right now. The Federal Reserve is used to dealing with banks as they are the bank regulator. They are used to extending credit to banks under different terms. I think once the Federal Reserve gets involved, treasury gets more involved and it takes some of that weight currently on the fdas shoulders, the program will become a bit more usable than it currently is right now. But, Mitch Mcconnell is looking to move an extension of the program. Billion moret 251 into that program for a total of 600 billion, because small and mediumsize businesses, some of them are able to access it and are seeking that as a lifeline. One of the main problems with the cares act is this bifurcation of the business community. Basically, you have small and medium businesses, that is than 500 less employees. Then you have businesses with more than 500 employees. The only lifeline available for those small and medium businesses is the ppp program, the extension of the 7a loan program that will turn into grants if you use that for payroll utilities, mortgages, or , rent. But there is really not a whole lot out there that is available to Small Businesses. What is available for Large Businesses is essentially still being worked out. They will enter into a variety of terms with the treasury department. Im sure the fed is also getting involved with that. The fed is used to dealing with Large Businesses. The difference between the fed and treasury, and why it is important to bring treasury in at this point, is that the fed is a risk adverse entity. Is a r. The treasury is bringing in some resources to essentially act as a backstop and get the fed to do potentially more than they otherwise would do. I see that is essentially a major problem, because it encourages everybody with more than 500 employees to go to the treasury and fed and figure out what their terms will be. It forces everyone with less than five hard employees 500 employees to go to your local banker and figure out how this program works. Honestly, they are still time to figure that out themselves in many places, but i expect, over time, some of these kinks will get worked out and you will be able to more easily access the money. I know that does not help in the short run because you are making decisions right now on what to do with your payroll, but i expect more help is coming soon just about 20 minutes soon. Host just about 20 minutes left with paul winfree. Our next caller is from tulsa, oklahoma. Caller good morning. Lets have a brief conversation to deliver a solution to the dilemma. We are on defense right now. Theinvisible enemy, president is talking about that. Anda is going back to work, there is a company that. Anufactures an air sterilizer what it has done in china, the demonstrations are already out there. It creates a work environment, a waiting room environment that destroys the virus, along with. Acteria is, this kind of thing it is a unique Technology Invented by a worldfamous inventor, starting to be distributed in the United States. It puts us on offense, as opposed to everything we have done so far being strictly defense. I dont mind answering any questions on that. Host thank you for the call from oklahoma. Paul winfree, i dont know if you have heard of that specific technology, but are there lessons you are going to be looking at from china as they reopen their economy . Guest oh yeah. I think one of the things the u. S. Is doing, again, policymakers at every level, is following the practices and protocols of those who have come before us. Not just china, but we are watching italy, spain, and the u. K. We are all learning from each other. The United States right now seems to be a real hotspot. Some of that just has to do with the fact that we might have better data. Different countries are measuring caseloads in different ways, and i think that china has a real incentive to try to get their economy back online, and to show the world that they have been able to get over this and have been able to handle the coronavirus. That said, one of the things we see in terms of the disease mitigation, in terms of the production of ppe, this protective equipment that doctors and nurses are using at hospitals, ventilators, we see a tremendous amount of innovation. We see it done very quickly. It is the job right now, i believe, of the regulatory state in the United States to fasttrack some of that stuff. Are to get folks who approving andr making sure those kinds of resources can be used by businesses get out there as quickly as possible. Couple mainhere are tests available for usage, but there are universities across the country working on new tests. It is really going to be critical to get those tests out there, in order to bring the economy back online. Itquestion, and this is a great time to innovate. Host this is kevin, good morning. Caller good morning. First of all, thank you for cspan. I think you are providing a Critical Service and this time to facilitate a National Dialogue and abide a lot of good information, guests on Health Policy, legal issues, and economic issues. I have two comments questions for your guest. He started off by saying good Health Policy is good Economic Policy. I think the converse is true as well. I think that is something that is missed by some of the Health Experts like found she. He said we could fauci. He said we could shut down the economy indefinitely and it will come back whenever we are ready. Fromnk we need more input the economists on a holistic view on how we address this whole pandemic, because there are health tradeoffs with bad economic alice as well. The second bad Economic Policy as well. The second point, i think this is a good time to think about the tradeoffs and risks of globalization. I think thats an underdressed issue in this pandemic. I think the pandemic has exposed risks, in terms of our supply chain being super dependent on aina, and i think it, for long time, the economic theory was having cheap labor in china was good, because there is excess capital and companies could reinvest in new things. Your guest could probably articulate what is better, but now we see there is a lot of cost in this as well. I dont think the pandemic would have spread as fast if we didnt have as much globalization, so we are paying a lot, in the end, for that globalization. I think we need to rethink the risks and tradeoffs there, and may be bring more of our manufacturing back to the u. S. Host thank you for the call. Paul winfree . Guest i think the caller is exactly right. There are significant consequences with session. Economists have paid a tremendous amount of attention to studying Public Health effects associated with recession and depression that are prolonged. For instance, economists have studied instances where babies are born during a Major Economic crisis and often times, because of the Resources Available to them early in life during their development stages, that has lasting effects on their health, so i dont agree with the notion that we can shove the economy down for an extended period of time, and it wont have Public Health effects. I think that is just wrong. Its one of the reasons why we are establishing this commission, to explore the tradeoffs one has to entertain when you are thinking about crisis mitigation, and to weigh the economic consequences holistically against the Public Health consequences. To get to the supply chain issue, i dont want to get in front of the commission in any way. Yesterday, i had a conversation with two of the commissioners. Our first meeting is 2 00 today. I had a conversation with two of the commissioners, george allen and the former majority leader. Both the senator and governor allen are both concerned about the supply chain issues, especially within regards to medical supplies. And being so dependent on china. I suspect that is something the commission will address in some way. I said i dont want to get in front of them at this point, but we think those are critical issues, and thank you for raising them. Host the commission is the National Core virus Recovery Commission started by the Heritage Foundation, heritage. Org is where you can find more information. Our guest, paul winfree, will be serving as one of the executive directors of that commission. New jersey, this is jerry. Good morning. Caller good morning. I heard you previously say about the senate and mcconnell trying to pass this bill to help the Small Businesses, but im not sure how far that will go, because the democrats, like usual, nancy pelosi is trying to add stuff to it, which will complicate it. That means it will get stopped dead in its tracks. Im hoping to hear from trump to say he will not sign it. So that will take care of that. The other thing is that i would like to know i see on the bottom that it says former administration to trump. Can you tell me why you are no longer part of the administration . When did you start on his administration . Can you explain who the Heritage Foundation is . I would appreciate it. Host thanks for the call. Guest thanks so much. I will start at the end and go back to talking about my past. The Heritage Foundation is a think tank, conservative think tank in washington, d. C. The washington of pennsylvania ranked us last year and the year before, and the year before that, as the most influential think tank in the world. We have about 300 scholars who study a variety of issues. I run the Economic Policy shop, looking at general economic regulation, tax policy, energy and environmental issues, and a bunch of other things as well. I served in Trumps White House as the Deputy Director of the domestic policy council, which basically means i was number two in domestic policy as well as the director of budget policy, all in the west wing. I joined the president ial transition in 2016, and i went into the white house on day one. I left the white house in early 2018, a couple days before my second son was born. Knew that kid number two was coming, i told my wife i would take a step back, but i continue to help out wherever i can. Federal policymakers, state and local policymakers, democrats and republicans, whoever is and to workisten towards practical Public Policy solutions. Host to richard out of philadelphia. Good morning. Caller yes. There wason i have is a large group of workers displaced from the economy, even though the economy was doing well. Because of this pandemic and the virus, im wondering, how will the economic structure change, as it relates to workers, because the skillbased disconnect is there going to be a skillbased disconnect . Heard theyructure, i are looking at rolling out something in relation to infrastructure, in specially especially in relation to the health care or education industry. Will that be able to bring in more of these displaced workers, and is that a concern when we talk about looking at the economy overall. Guest displaced workers and skill disconnect is something that were problems prior to the current recession and prior to the onset of the pandemic. I think one of the things economists like to talk about is that the economy itself is what they call sticky in some ways, in which it is difficult for major changes to happen without some upsetting event. One of the things we see with this pandemic already is that there are new industries that are starting, there are new ways of doing work. Im conducting this interview from my house, rather than from the studio downtown, so that we can continue with our social distancing. To be the things that is determined is that there are some industries that are literally hemorrhaging jobs. Childcare is a great example of this. Education is completely being overhauled. I am also the chair of the j williams scholarship board, the largest foreign scholarship in the world, and one of the things we have been doing is talking to University President s, both in the United States and overseas, about how they are thinking about bringing classes back online this fall. Some University President s are talking about shifting the Academic Year altogether from the fall until the spring, to january to december. They are thinking about doing that permanently. One of the things i Hope Congress starts to think about, as we move through the different phases of recovery, is how do we the workplaceform and workforces to make sure that we arent driving additional prior that were ingrained to this pandemic being onset. In terms of infrastructure, look, there has been a conversation about an infrastructure bill for four years. Im not sure how realistic it is, but i dont think congress is going to essentially sit on its hands for the rest of the summer. I suspect that there will be some action, very soon if not this week, on the Small Business loans program. I suspect congress will come back and probably think about how to provide a more resort provide more resources to public we seeofficials, and, as what kind of recession and recovery we are in, im sure they will respond in some way. It is just to be determined what that way will exactly be at this point. Host you mentioned at the top of the segment about economic indicators, that would be coming out during your appearance on the program. Im assuming this is what you meant, the weekly jobless claims. According to politico, the numbers reached 6. 6 million last week. According to the labor department, job losses pileup on to the nearly 10 claims filed in the last two weeks. Guest thats a staggering number. Had 3. 3eks ago, we million new claims. We had the largest one week increase in the history of Unemployment Insurance claims since they started keeping a record of it in the middle of the 70s. The next week, 6. 6. Now it is over 6 million, meaning on net, we have about 17 million new Unemployment Insurance claims, and we know there are more people out there unemployed. Theres a whole portion of the population in the gig economy that is not eligible for Unemployment Insurance. We know people are contacting the Unemployment Insurance systems within their states, and they are not getting through. Either because the systems are overwhelmed or because they are dated. A fewntly saw a report days ago that said new jersey thehiring folks who knew cobol computer language, because the system they had in place had not been updated in over 25 years, so they needed programmers, just to get things going. I have a piece of anecdotal evidence from new york state that there seems to be a two week four b four week backlog. Even though those numbers are staggering, they dont give full weight to the economic problem we are in. As i mentioned earlier. That means the real Unemployment Rate is probably somewhere in the ballpark of 14 , and it seems to be getting higher as total parts of the economy are taken offline. That is exactly why we need we think we need this commission, to think about these heart problems, and to start to think about ways to address them and bring parts of the economy back online, once it is safe to do that. Host time for one or two more questions with paul winfree. This is ralph and washington, d. C. , a business owner. What kind of business . Caller im not a business owner, im an investor. Im in the stock market. I can tell you that what im watching now is absolutely insane. They are has housegoing live speaker conducts her News Conference by phone. Live coverage is here on cspan. Speaker pelosi we will pray for those who lost their lives and the families that are suffering and those who are sick with the virus. Timea very, very sad as we awaken this morning to see approachingals are 450,000 people infected