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Coronavirus Live Updates: States Face Billions in Shortfalls, Economists Say


Long-term financial damage may be greater than that of the last recession for states, economists say.

The Senate formally adjourned on Thursday until early September, leaving undone any package of pandemic relief. House members had already left Washington.

Democrats and the Trump administration remain far apart on the stimulus, including how much to spend and where the money would go. The House, which is controlled by Democrats passed a $3 trillion dollar package in May. Republicans, who control the Senate, want to stay in the $1 trillion range.

A major sticking point, aside from how much more to help unemployed Americans, was providing more aid to state and local governments. With tax revenues plummeting, states could face a cumulative budget gap of at least $555 billion through the 2022 fiscal year, according to one estimate. Economists warn that, unless Congress intervenes, the long-term financial damage might be greater than after the recession of 2007-9.

President Trump and top Republicans warn that providing more money to states could simply bail out fiscally irresponsible governments that did not manage their budgets and their public pension plans prudently in good times.

Democrats insist that states need more money and have proposed as much as $1 trillion, saying it would support needed services and help the economy recover more quickly.

Nearly all states are required to balance their budgets, meaning officials will need to plug shortfalls by tapping rainy-day funds, raising taxes or cutting costs, including by eliminating jobs.

That worries economists and Federal Reserve officials. Jerome H. Powell, the Fed chairman, regularly warns that state job cuts could hurt the economy’s ability to recover, and his colleagues say that public-sector budget trouble is one of the country’s primary vulnerabilities.

“It will hold back the economic recovery if they continue to lay people off and if they continue to cut essential services,” Mr. Powell said during congressional testimony in June. “In fact, that’s kind of what happened post the global financial crisis.”

With unemployment high and many businesses expected to close, states are bracing for more safety net costs on top of the public health expenses they are already incurring. They spend a large chunk of their budgets on Medicaid payments and services for low-income residents.

Yet the Trump administration and many Republican lawmakers have largely brushed off state financial woes, insisting that governors and other local leaders foot part of the pandemic aid bill and refusing to “bail out” Democratic-led states struggling with huge shortfalls in their public pension plans.

More than five months have passed since the pandemic prompted the shutdown of nursing homes and assisted living complexes across the United States, and a number of geriatricians and health care researchers now fear that the restrictive visiting policies at these facilities have become injurious to the residents.

“It’s not just Covid that’s killing residents in long-term care,” said Dr. Jason Karlawish, a geriatrician at the University of Pennsylvania. “It’s the isolation, the loneliness.”

The shutdown, which barred virtually all visitors, made sense to experts in the early weeks of the outbreak, when so little about the virus was understood.

Older people are generally far more vulnerable to pathogens, and the shared space of an elder-care home adds its own risks. More than 40 percent of those who have died from Covid-19 in the U.S. were residents or staff members at long-term care facilities, a New York Times database shows.

“We felt they were being responsive and protecting residents,” Dr. David Grabowski, a health care researcher at Harvard Medical School, said of the federal Centers for Medicare and Medicaid Services, which ordered the shutdown in March.

But studies have repeatedly shown that isolated older adults have elevated rates of heart disease, stroke and dementia and increased mortality rates, comparable to those linked to smoking. And in a study co-authored by Dr. Grabowski, nursing home residents with dementia received a better quality of care at the end of life if a family member visited regularly.

“Some have termed this isolation ‘involuntary confinement,’” said Dr. Christian Bergman, a geriatrician and internist at Virginia Commonwealth University. “We can’t continue down this path for another six months.”

In May, Medicare officials issued recommendations for state and local officials on phased reopening for nursing homes. It includes expanded visiting with masks and distancing when a home has entered Phase 3, meaning that it has had no new Covid cases for 28 days and can provide adequate testing and protective equipment, with no staff shortages.

Dr. Bergman, who heads a panel of health care professionals developing reopening guidelines for long-term care, estimated that fewer than 5 percent of facilities nationally have reached that point.

At facilities that have already resumed family visits, the most common approach has been scheduling brief contacts outdoors or encounters through windows, sometimes supplemented by video chat and phone calls.

But the effort has not been universal. “We are hearing that many facilities are refusing to permit visits even if they are allowed to do so,” Robyn Grant, director of public policy and advocacy for the National Consumer Voice, said in an email.

Vietnam has registered to buy Russia’s vaccine against Covid-19, the Reuters news agency reported on Friday, despite the concern of global health experts that Russia is offering the drug for use before human trials have been completed.

There were no details on how many doses of the vaccine Vietnam is expected to buy or when they would be delivered.

Vietnam has said it is developing its own vaccine, which it hopes to make available by the end of next year.

The country has been one of the most successful in containing the virus and did not report its first death until two weeks ago. But it is now fighting an outbreak that began in the central city of Danang and has spread to other parts of the country, causing about 400 new cases and claiming 21 lives.

As of Friday, Vietnam reported a total of 911 cases, many of them Vietnamese people returning from abroad whose illness was detected in quarantine.

Collaboration between Vietnam and Russia dates to at least the 1960s, when Russia was part of the Soviet Union, a major supporter and weapons supplier to Vietnam as it fought against the United States in the Vietnam War.

Vietnam, which remains a Communist state, has purchased six Kilo-class submarines from Russia over the last decade. The vessels can help Vietnam patrol the South China Sea, an area of rising tension with China, its neighbor and longtime adversary.

The news that Vietnam would buy Russia’s vaccine was announced by state television. It was unclear whether it signaled Vietnam’s intention to inoculate large numbers of people or was intended mainly as an endorsement of the Russian product.

Much of Vietnam’s earlier success in containing the virus resulted from its aggressive contact tracing, isolation and public education. But Vietnamese health officials say the strain causing the Danang outbreak has been difficult to contain because it is more contagious and severe than previous ones.

GLOBAL ROUNDUP

North Korea, fighting the virus and flooding, lifts a border city’s lockdown.

North Korea on Friday lifted a lockdown that it had imposed on a border city last month, but without providing any details or saying whether the nation has a coronavirus outbreak.

North Korea imposed the lockdown in Kaesong, near the border with South Korea, based on the government’s suspicion that a runaway from South Korea had brought the virus with him. On Friday, it said only that the reversal had been “based on the scientific verification and guarantee by a professional anti-epidemic organization.”

North Korea sealed its borders in late January and has insisted for months that it had no coronavirus cases, although outside experts questioned the claim. It has not revealed whether the defector who crossed back from South Korea tested positive.

This summer, an unusually long monsoon season, as well as torrential rains, have set off floods and landslides in parts of North Korea that suffer chronic food shortages even during normal years.

The twin calamities of the pandemic and the floods have battered an economy that was already hamstrung by the sanctions imposed by the United Nations for North Korea’s nuclear weapons development — and which went into a tailspin this year as the border restrictions cut deeply into exports and imports with China, the North’s primary trading partner.

North Korea’s leader, Kim-Jong-un, has said the nation faces “two crises at the same time.” But on Friday, the North’s state-run media reported that he had ordered his country not to accept any international aid for fear that outside help might bring in the coronavirus.

By precluding outside aid, he appeared to be denying Seoul and Washington a chance to thaw relations with the North through humanitarian shipments.

“North Korea’s rejection of flood relief is ostensibly to prevent transmission of Covid-19 into the country,” said Leif-Eric Easley, a professor of international studies at Ewha Womans University in Seoul. “But humanitarian assistance is heavily politicized by the Kim regime, as it does not want to show weakness to the domestic population or international rivals.”

In other news from around the world:

  • South Korea reported 103 new cases on Friday, mostly in Seoul, the country’s biggest daily jump in three weeks. The daily caseload has remained in double digits since July 25. Last month’s spike was primarily attributed to South Korean workers returning home with the virus from Iraq, but 85 of the 103 new cases reported on Friday were local transmissions.

  • President Rodrigo Duterte of the Philippines has delayed the opening of schools from Aug. 24 until Oct. 5, his chief aide said Friday. All schools are also “instructed to ensure that all preparations have been made for the smooth and successful virtual opening of classes,” the aide, Salvador Medialdea, said in a memorandum. The Philippines has the highest number of infections in Southeast Asia. There have been 147,526 confirmed cases and 2,426 deaths, according to a New York Times database.

France declares Paris and the Marseille region to be high-risk zones.

France on Friday declared Paris and the Marseille region in the southeastern part of the country to be high-risk zones, granting local authorities powers to impose new restrictions aimed at containing the spread of the coronavirus.

The declaration allows the authorities to restrict the movements of people and vehicles, limit access to public transportation and public buildings and to close down restaurants, bars and similar establishments.

The move come as France faces a resurgence of the virus. The daily average of 1,650 cases since the beginning of August has reached the level of infections in the first week of France’s lockdown, one of the strictest in Europe, in early March. The increase prompted Britain on Thursday to add France to its list of countries from which visitors have to quarantine.

The number of coronavirus patients in intensive care, which had been steadily falling since early April, has also risen slightly in recent days.

The increase in cases reflects not only an increase in the number of tests, which now stand at more than 600,000 per week, but also a higher contamination rate, especially among young people, the health authorities said.

On Tuesday, Prime Minister Jean Castex said that he wanted “to extend as far as possible the obligation to wear masks in public spaces” to prevent “a high risk of epidemic resumption.”

Many French cities, including Paris and Marseille, have already imposed mandatory mask-wearing in busy outdoor spaces like open-air markets or crowded streets, in addition to the national requirement to wear masks in indoor spaces.

U.S. roundup

The governor of Georgia changes tack in his fight with Atlanta’s mayor over a mask order.

Gov. Brian Kemp of Georgia said on Thursday that he was abandoning a lawsuit against city officials in Atlanta over the city’s attempt to require mask-wearing and resume tighter coronavirus precautions. But the move did not signal that the governor had stopped fighting the city’s moves or that he had reached any kind of détente with Mayor Keisha Lance Bottoms of Atlanta.

In place of the lawsuit, Mr. Kemp said he would issue a new executive order this week that would probably forbid city governments from requiring businesses to make their customers wear face masks. But he was also expected to lift an earlier order forbidding cities from issuing mask mandates for public places.

The judge handling the lawsuit had ordered the governor and the mayor to try to negotiate a settlement, but the talks did not succeed.

“Unfortunately, the mayor has made it clear that she will not agree to a settlement that safeguards the rights of private property owners in Georgia,” Mr. Kemp said in a statement on Thursday. “Given this stalemate in negotiations, we will address this very issue in the next executive order.”

Mr. Kemp, a Republican, had been criticized for moving slowly to issue a statewide stay-at-home order when the coronavirus first started spreading, and then starting to reopen the state while the virus remained uncontrolled.

Ms. Bottoms, a Democrat, has supported more stringent measures to curb the spread of the virus. (She also tested positive for the virus herself over the summer.) On July 10, citing a surge in new cases in Atlanta, she ordered the city to return to Phase One of its reopening plan, which mandates that people cover their faces in public and stay at home except for essential trips.

In other news from around the United States:

  • The National September 11 Memorial & Museum canceled its annual light display on the anniversary of the 2001 terrorist attacks because of the coronavirus. The decision was made “after concluding the health risks during the pandemic were far too great for the large crew,” a museum spokesman said.

  • The N.C.A.A. president, Mark Emmert, announced Thursday that Division I fall sports championships excluding football would be canceled. The championships were not explicitly dropped for health and safety reasons, but because there were fewer than the benchmark 50 percent of teams to compete in sports like women’s volleyball, soccer, cross country and men’s water polo.

Britain adds more countries to its quarantine list, but carries on with reopenings.

Britain followed through on its promise that it would “not hesitate” to add more countries to its quarantine list by imposing new restrictions on travelers coming into the U.K.

The government announced on Thursday that anyone coming into Britain from France and five other countries must isolate for 14 days, pointing to a “significant change” in the risk of contracting the coronavirus.

France has seen a surge in infections. The country recorded at least 4,000 new cases on Wednesday and at least 2,600 on Thursday, according to a New York Times database. Its seven-day average is now above 2,000 cases.

The two-week quarantine will also to travelers from Aruba, Malta, Monaco, the Netherlands and Turks and Caicos. Britain has already imposed restrictions on Spain and Belgium, among other countries.

The new measures were unveiled with little more than a day’s notice, prompting an instant scramble from vacationers to get back to Britain before the quarantine is imposed at 4 a.m. on Saturday.

But as Britain ramps up its measures on other countries, it is steaming ahead with its efforts to revive its own economy, which has spiraled into the deepest recession of its modern history.

Bowling alleys, theaters, and casinos will be allowed to reopen in England starting Saturday with social distancing in place, and beauty salons will be allowed to provide “close contact” services such as facials and eyebrow threading for the first time since lockdown began.

Wedding receptions will be also allowed for up to 30 guests, providing they are socially distanced.

Penalties for refusing to wear a face covering, as is required in enclosed public spaces and public transport, will also increase. And organizers of illegal gatherings could be fined up to 10,000 pounds ($13,000).

Australia and New Zealand confront border failures amid new outbreaks.

The border, the border, the border: That’s been the mantra for Australia and New Zealand since the coronavirus emerged. But both countries are now learning that their definition of the border, and border security, needs to expand to control the pandemic.

In New Zealand, where a cluster that emerged on Tuesday had grown to 30 cases by Friday, officials struggled to explain a lack of regular testing for border officials and workers who manage hotel quarantine for the roughly 400 residents returning every day from overseas.

One respected epidemiologist, Sir David Skegg, a professor at Otago University, called the lack of testing an “extraordinary” breach of known best practices.

Investigators still haven’t determined how the virus re-entered the isolated Pacific country after 102 days without a case of community transmission. Prime Minister Jacinda Ardern, who on Friday extended a lockdown in Auckland for another 12 days, told reporters that officials had not yet linked the first identified case to either the border or quarantine facilities.

But New Zealand’s process for handling returning citizens and residents has become a focal point, in part because new details have emerged about what caused the outbreak that is still raging in Australia.

Leaked emails from government officials, published Friday by The Age, a newspaper in Melbourne, Australia, identified a hotel night manager as patient zero. He tested positive for the virus on May 26, and worked at one of the largest quarantine hotels in the city. Five security guards at the hotel later tested positive, after spreading the virus to relatives and their communities.

A public inquiry into how passengers infected with the coronavirus were allowed to disembark a cruise ship in Sydney, Australia, in March, setting off a major outbreak, also handed down its findings on Friday.

The detailed report from a panel of experts found a litany of “serious mistakes” and failures (a word the authors used 34 times) that ultimately led to 20 deaths in Australia and eight more in the United States. Chief among the errors was a lack of testing and the assumption that the ship’s 2,700 passengers were low-risk because they had come from New Zealand even though it was known that many of the arriving tourists had flown to their departure point from the United States and other high-risk locations.

The border at the cruise ship terminal in central Sydney was porous, investigators found, and the virus broke through.

“The events surrounding the ship’s voyage and disembarkation on 19 March 2020 will sadly have a lasting effect for many passengers and their families,” the report concluded. “It can only be hoped that this episode serves as a precautionary tale should public health authorities ever again encounter similarly challenging circumstances.”

How do people learn to be more resilient?

If you feel as if you can barely cope, while others are doing just fine, remember that the very earliest days of our lives, and our closest relationships, can offer clues about how we deal with adversity.

Reporting was contributed by Damien Cave, Choe Sang-Hun, Emily Cochrane, Jason Gutierrez, Constant Méheut, Colin Moynihan, Richard C. Paddock, Alan Rappeport, Rick Rojas, Anna Schaverien, Jeanna Smialek, Paula Span and Billy Witz.



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