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Unsanitized: The COVID-19 Report for Sept. 28, 2020

Amy Coney Barrett Will Take Away Your Healthcare in a Pandemic,
Democrats Warn

Plus, commercial real estate collapses

 

President Trump and Judge Amy Coney Barrett descend steps on the way to
the announcement of her nomination to the Supreme Court. (Alex
Brandon/AP Photo)

First Response

**** As expected, over the weekend Donald Trump selected Amy
Coney Barrett to fill the open seat on the Supreme Court. The plan is
apparently for confirmation hearings within two weeks and a vote on the
Senate floor within four. Democrats are finally talking about using
procedural tools

to slow down the Senate, although they haven't brought out all of the
big guns yet.

Nancy Pelosi could have the House passed privileged resolutions that
would have to take priority over the Court vote-War Powers Act
resolutions, Congressional Review Act, even impeachment-but there
aren't any plans in that direction yet. It's in the interest of the
Democrats to do so, because Republicans have far more sitting Senators
who need to be outside of Washington to campaign. That's how this vote
could be pushed into the lame duck session.
But whether Barrett is confirmed before or after the election, and one
of those seems likely given the determination of Senate Republicans,
what Democrats can control is their approach to the nomination. There
are a number of potential points to make: abuse of norms, the unusually
rapid process, the threat to abortion, or even the reinforcing of the
worst tendencies of the Roberts Court, given Barrett's rulings on
corporate power
. But
this is Unsanitized, and the reason I'm talking about this battle here
is that Democrats have decided to go all in on the Barrett
nomination's impact on healthcare
.

Read all of our Unsanitized reports here

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**** There just happens to be this big healthcare case
getting heard the week after the election that would in underpants gnome
fashion leaps from
the individual mandate being zeroed out to eliminating the entire
Affordable Care Act. The fact that we're in the middle of a pandemic
as this is being considered almost doesn't need to be said. At a time
when the only recourse for tens of millions who have lost their jobs and
their healthcare is to use the tools of the ACA to get covered, throwing
that system into upheaval would be a significant hardship. And of
course, healthcare and the Republican drive against it was a winning
message in the 2018 midterms.

The healthcare argument is also a process argument. Because of the Court
schedule, you can credibly make the case that the "real reason" for
a rush to install Barrett is to get her on the bench in time to hear the
case to throw out the ACA. John Roberts may align with the liberals on
that case, but Barrett's presence could flip the verdict from a 4-4
deadlock to a 5-4 victory to toss the law. (It's entirely possible
that this is such a ridiculous case that even conservative jurists will
vote it down, and Democrats could pass a one-line amendment

to defuse the threat. But the threat is absolutely there.)

So you're seeing unusual message discipline from the Democrats, who
aren't lunging for the process or norm argument. "We must focus like
a laser on health care because Judge Barrett's record is so clear on
this issue," Senate Minority Leader Chuck Schumer (D-NY) wrote in a
Dear Colleague letter
.
My inbox is a testament to his suggestion being heard.

"In the midst of an unprecedented public health crisis, they are
willing to ram through a Supreme Court nominee-within days-who will
vote to destroy the Affordable Care Act," wrote Sen. Bernie Sanders
(I-VT). "This nomination threatens the destruction of life-saving
protections for 135 million Americans with pre-existing conditions
together with every other benefit and protection of the Affordable Care
Act," wrote Speaker Pelosi. You don't see Sanders and Pelosi linked
on messaging so often. Most other Democratic politicians referenced
healthcare in their reactions to the Barrett nomination. You can expect
the confirmation hearings to follow this trend
.

This litany baited Trump into tweeting that the Supreme Court
terminating the ACA would be "a big WIN

for the USA!" Schumer immediately seized

on this. And of course, the healthcare frame matched Joe Biden's
talking points

as well; he deflected every question
in his
weekend press conference back to this.

This has almost no chance of preventing Republicans from moving forward
on the nomination, but it's solid politics
.
As Stan Greenberg explained in our last issue, focus groups show deep
concern with healthcare

and don't want it undermined any further. There are several races
where marginal voters could swing away from Republicans who show a
desire to return the healthcare system to Bush-era chaos-Iowa, North
Carolina, Georgia, Montana, South Carolina, even Kansas and Texas at the
margins.

The pandemic could also play a role in the "instead of" debate. As
in, "instead of working to get help to millions of unemployed
Americans, they are dropping everything to confirm an extremist
justice." That was approximately the approach of Rep. Tim Ryan (D-OH),
and it's a decent side topic. But the primary one will be healthcare,
with the backdrop of people continuing to get sick and die from
COVID-19. It works politically and with a few procedural breaks could
work to at least slow the nomination, too.

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The Mall-pocalypse, With Numbers

I have been saying for a while that the greatest near-term financial
risk is to commercial real estate, the value of which has cratered in
the pandemic. Now we have some dollar figures to look at. A review of
appraisal data
at the
Financial Times finds commercial properties at a 27 percent loss on
average since earlier this year. Several hotels in the sample had not
paid loans since March or April.

This data comes out of loans that had been securitized into commercial
mortgage backed securities (CMBS), the mall-and-hotel version of the
residential MBS from the financial crisis. As Bill McBride notes
,
the CMBS market is smaller than residential MBS was at the time. That
doesn't mean there won't be a lot of pain from across-the-board
drops in valuation of 25-30 percent. What it likely portends is
consolidation, with a couple lenders handling all the malls in the
United States, a direction we're already headed toward. If malls just
collapse as even lenders decide they don't want them, the impact on
property taxes for dozens of communities will be even more stark. Keep
watching this space.

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Today I Learned

* The experts are warning

of a fall surge in coronavirus cases. We're already seeing it in
several red states
,
as well as Wisconsin
.
(CNN; Huffpost; The Atlantic)

* A sampling of dialysis patients reveals only 10 percent of the country

has antibodies, meaning there's a lot of room left to run for the
virus. (The Lancet)

* With the pandemic comes consolidation
,
as smaller companies get sucked up. (Los Angeles Times)

* Globally, we're seeing an increase in child labor

as families grow desperate. (New York Times)

* Pelosi planning a new "proffer"

to the White House on coronavirus relief, but I wouldn't expect much
out of it. (Bloomberg)

* Half of Americans who lost their job in the economic collapse still
don't have one
.
(Vox)

* The pandemic pet boom
.
(CNBC)

* A little town in Vermont has been overrun by pandemic escapees

from the bigger cities. (New York Times)

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