May 8, 2020

Axios AM

By Mike Allen
Mike Allen

💐 Good Friday morning. Sunday is Mother's Day.

🛍️ Sign of our times ... Wall Street Journal headline: "Neiman Marcus, the Retailer to the Rich, Files for Bankruptcy." And we used to call it "Needless Markup!"

  • "A Texas oil boom turned a single Neiman Marcus department store in downtown Dallas into one of America’s biggest luxury retailers," the Journal writes. "A century later, ... coronavirus tipped the heavily indebted company into a bankruptcy court."

Today's Smart Brevity™ count: 1,328 words, 5 minutes.

1 big thing ... Scoop: Snafu misdirects virus drug

President Trump and First Lady Melania Trump walk out of the Oval Office and into the Rose Garden for a National Day of Prayer event yesterday. Photo: Chip Somodevilla/Getty Images

A breakdown in communication and coordination within the Trump administration has undermined the distribution of a promising coronavirus treatment, Axios' Jonathan Swan reports.

  • Why it matters: The drug, remdesivir (pronounced "rem-DESS-uh-veer"), hasn't made it to some of the hospitals where it's most needed.
  • Administration officials have responded by trying to shift blame.

Gilead Sciences, which makes remdesivir, donated hundreds of thousands of doses to the federal government after the FDA authorized it as an emergency treatment for coronavirus patients.

  • More than 32,000 doses were delivered Tuesday to Indiana, Massachusetts, New Jersey, New York, Rhode Island, Tennessee and Virginia.
  • But many of the doses went to "less impacted counties," an administration official said.

How it happened: The criteria for distributing the drug was based on outdated data — the best the federal government had available, a senior administration official said.

  • The official added that the failure highlights the need for better data. "But it more importantly highlights the reason why the administration continues to push a locally-executed response effort, because they [the local jurisdictions] know the data and the distribution better than the federal government."
  • The administration will use more stringent criteria to target the remaining doses, a source familiar with the planning said.

HHS was supposed to be the brains of the operation, using clinical expertise to allocate the drug to the places and hospitals around the country most in need, according a senior administration official, while FEMA was supposed to be the "arms and legs" putting that plan into action.

  • But somewhere along the way, communication broke down.
  • Thousands of doses were maldistributed. But nobody was willing to put their name on the situation.

Behind the scenes: Senior officials, including Vice President Pence and White House coronavirus response coordinator Deborah Birx, were angry.

  • At Wednesday's meeting of the Coronavirus task force, Pence personally directed HHS Secretary Alex Azar to take more ownership for getting remdesivir to the places where it's needed.
  • In subsequent conversations with colleagues, Azar said he had not known about the arrangements that led to mass confusion and misaligned shipments the day before.

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2. States face economic death spiral
Data: Lucy Dadayan/The Urban Institute. Chart: Andrew Witherspoon/Axios

As states move toward reopening, the economic ramifications of the shutdown will haunt them far into the future, Axios' Stef Kight reports.

  • Why it matters: The virus is devastating states' revenue streams — and could force choices between raising taxes, or gutting services and laying off public employees.

What to watch: Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.) plan to introduce legislation as soon as next week to create a $500 billion fund designed to help struggling state and municipality budgets.

The Urban Institute has been compiling lost revenue data as states make it publicly available.

  • The data shows collections dropping between 20% and more than 50%, depending on the state, senior researcher Lucy Dadayan tells Axios.
  • California's staggering tax revenue loss due to the pandemic has led to an expected $54.3 billion budget shortfall through FY 2021, Gov. Gavin Newsom announced yesterday — after a $21 billion surplus last year.

Between the lines: Democratic-leaning cities have seen the highest case and death rates, but red and blue states alike are facing serious budget shortfalls.

  • That's why some Republican senators are getting behind efforts to provide federal dollars to help states balance budgets.

Much of the burden will likely be pushed on struggling local governments.

  • Cities have lost hotel occupancy fees, inspection fees and construction fees.
  • Some could be forced to lay off public workers needed to combat the virus and keep the public safe — such as firefighters, paramedics and public hospital workers.

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How it's playing ...

L.A. Times
3. Double whammy for most vulnerable
Data: Kaiser Family Foundation. Chart: Axios Visuals

Minorities and low-income people are more likely to become seriously ill if infected with the coronavirus, a Kaiser Family Foundation analysis finds.

  • Why it matters, from Caitlin Owens in her Axios Vitals newsletter: As some businesses reopen sooner than public health experts advise, low-income workers have less of an option to quit if they feel unsafe.
Data: Kaiser Family Foundation. Chart: Axios Visuals
4. Today is 75th anniversary of V-E Day

Photo: Peter Byrne/PA via AP

Above: Residents of Cambrian Road in Chester, England, wear period clothing and hold a socially-distanced tea party for the 75th anniversary of V-E Day — Victory in Europe, marking the surrender of Nazi Germany to Allied forces after six horrific years of World War II.

  • This was to be a day of parades and one last great hurrah for veterans, now mostly in their nineties, who had tasted the thrill of liberation.
  • Instead, it’s largely a time of lockdown and loneliness — sometimes with a lingering Vera Lynn song in the background, AP writes.

Below: Jubilant nurses celebrate V-E Day in Liverpool, England, in 1945.

Photo: Mirrorpix via Getty Images
5. Murder charges in Georgia case

Ahmaud Arbery. Photo courtesy of his family, via NBC News

Georgia authorities arrested a white father and son and charged them with murdering Ahmaud Arbery, 25, two months after they chased him in a pickup after spotting him running in their neighborhood. (Atlanta Journal-Constitution)

  • National outrage swelled after apparent cellphone video of the shooting lit up Twitter this week.
  • Joe Biden, during an online roundtable yesterday, compared the video to seeing Arbery "lynched before our very eyes."

The father and son told police they suspected Arbery of being a burglar.

  • Arbery's mother, Wanda Cooper Jones, said the former football player "was just out for his daily jog."
Gregory McMichael, 64, and his son Travis McMichael, 34. Photos: Glynn County Detention Center via AP
6. Driving the day: Grim expectations
Data: Bureau of Labor Statistics via FRED; April projection via FactSet. Chart: Andrew Witherspoon/Axios

Today's jobs numbers are expected to be the worst since records began in 1948, AP reports.

In February, the unemployment rate was 3.5% — a 50-year low, Courtenay Brown writes in the Axios Markets newsletter.

  • Economists project that the April rate, out today, more than quadrupled to the highest level since the Great Depression.

The real rate at this moment, of course, is even higher.

7. Staggering stat: 33 million have lost jobs since virus hit
Data: U.S. Employment and Training Administration via FRED. Chart: Andrew Witherspoon/Axios

In less than two months, roughly 20% of the labor force — 1 in 5 Americans — have lost their jobs, Courtenay Brown writes.

  • 3.2 million filed for unemployment last week, the Labor Department said yesterday.

The record — 6.9 million — was set the week that ended March 28.

  • Before coronavirus, the record number of weekly claims was 695,000 — in 1982.
8. Unusual reversal clears Flynn

Screenshot via Fox News

In an abrupt about-face, the Justice Department said it is dropping the criminal case against President Trump's first national security adviser, Michael Flynn.

  • Why it matters: The action was a stunning reversal for one of the signature cases brought by special counsel Robert Mueller, AP reports.

The case became a rallying cry for the president and his supporters in attacking the FBI's Trump-Russia investigation.

  • In court documents filed yesterday, the Justice Department said that after reviewing newly disclosed information, it agreed with Flynn's lawyers that his interview with the FBI should never have taken place because his contacts with the Russian ambassador were "entirely appropriate."

What Trump is seeing on the cover of his N.Y. Post ...

N.Y. Post

⚖️ Bridgegate convictions tossed: The Supreme Court "threw out the convictions of two allies of former New Jersey Gov. Chris Christie for the George Washington Bridge lane-closing scandal in a ruling that limits the power of federal prosecutors to target state and local corruption." Bloomberg

9. 🏈 Back to football!? NFL schedules full season

Courtesy: SharpFootball

The NFL released a 2020 schedule as if the season will take place normally, kicking off with the defending champion Kansas City Chiefs hosting the Houston Texans on Sept. 10.

Kendall Baker has these notes in his daily Axios Sports newsletter (sign up here):

  • The Brady effect: The Tampa Bay Bucs had one primetime game last year. This year, they have five, the most in franchise history.
  • Stadium debuts: The first regular season game at L.A.'s SoFi Stadium will be Rams-Cowboys on Sept. 13 (Sunday Night Football), and the Raiders will begin their Las Vegas journey at Allegiant Stadium against the Saints on Sept. 21 (Monday Night Football).
  • Sorry, D.C. and Detroit: Every team got at least one primetime slot except for two: the Redskins and the Lions. They'll both play on Thanksgiving.

See the week-by-week schedule.

10. 1 smile to go
Image via GIPHY

April's two most-viewed GIFs were a thumbs-up and an expression of hugs and kisses, "highlighting positivity and ways to say 'I love you'" amid the virus crisis, according to a new report from GIPHY.

  • People are looking for fresh ways to communicate, with the company "seeing scale in the U.S. sustained at levels close to the spikes we typically see for a big moment, like New Year’s Eve."
  • And people are trying to project normalcy as there has been "a gradual decrease in searches for the virus along with an increase in searches for more timely moments and holidays."
Mike Allen

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