May 13, 2020 10:56AM

CDC Failures: Mission Sprawl Is One Problem

The Centers for Disease Control and Prevention (CDC) says that it “has a unique mission—to save lives by deploying effective, proven strategies to prevent, detect, and rapidly respond to disease outbreaks at their source.”

But the CDC was slow to recognize the size of the COVID-19 threat and it fumbled the ball in numerous ways. CDC Director Robert Redfield tweeted January 14 that “there is no confirmed person‐​to‐​person spread” of the illness, and on January 28 he emailed CDC colleagues that “the virus is not spreading in the U.S. at this time.”

A ProPublica analysis found, “Internal Emails Show How Chaos at the CDC Slowed the Early Response to Coronavirus.” The analysis concluded that “the CDC underestimated the threat from the virus and stumbled in communicating to local public health officials what should be done.” Meanwhile, an NPR investigation found that the CDC’s initiative to create an early warning system in selected cities was a flop.

This CDC brochure lauds the agency’s success at battling COVID-19. It says, “An important part of CDC’s role during a public health emergency is to develop a test and equip state and local public health labs with testing capacity.” The brochure does not mention that the CDC’s test failed and that federal actions delayed the deployment of private‐​sector tests.

The CDC and other federal health agencies told the public not to wear masks. The official line was: “CDC does not recommend that people who are well wear a facemask to protect themselves from respiratory illnesses, including COVID-19.” The U.S. Surgeon General was insistent about masks: “They are NOT effective in preventing general public from catching #Coronavirus.”

Why should we spend billions of dollars on health agencies that give us harmful advice?

Some pundits claim that budget cuts were the problem, but the table below suggests otherwise. The CDC workforce increased 12 percent between 2010 and 2019, based on data in CDC budget submissions here and here.

The largest employment increase was in “Global Health,” a group that monitors foreign outbreaks of infectious disease. The group’s employment jumped from 272 in 2010 to 1,263 in 2019. The CDC says the group “supports global efforts to detect epidemic threats earlier, respond more effectively, and prevent avoidable catastrophes.” The agency should have been ready.

CDC leaders may have been distracted because of mission‐​sprawl. The CDC’s 512‐​page budget submission for 2021 reveals a vast and disparate array of activities. What are occupational safety and injury prevention doing in the government’s infectious disease agency?

The CDC highlights its recent accomplishments on pages 18 to 23. How is CDC Director Redfield supposed to remain alert to emerging epidemics when he is also supposed to manage programs on tiny teeth, colon cancer, opioids, child abuse, diabetes, workers’ compensation, lead‐​based paints, mold in buildings, and lifting heavy objects on construction sites?

From the highlights:

“In 2019, CDC launched the Protect Tiny Teeth initiative in collaboration with partners. The initiative includes an oral health toolkit to raise awareness about the importance of oral health as part of prenatal care.”

“As part of the Combatting Opioid Overdose through Community‐​Level Intervention program, CDC expanded efforts to partner with public safety (e.g., law enforcement, first responders) by collaborating with the Office of National Drug Control Policy to fund 25 pilot projects.”

“Using CDC resources, the Forest County Potawatomi Community, a tribal nation in Wisconsin created a media campaign, in collaboration with the Tribe’s Executive Council, targeting the stigma associated with opioid use disorder within the Native American culture.”

“CDC’s Essential for Childhood program recipient states increased the percentage of Community‐​Based Child Abuse Prevention dollars invested in evidence‐​based programs from 24% to 52%.“

“CDC’s Colorectal Cancer Control Program grantees have partnered with over 760 health system clinics that serve over 1.2 million patients age‐​eligible for colorectal cancer screening.”

“As of December 2019, more than 1,500 organizations have received CDC‐​recognition for delivering CDC’s National Diabetes Prevention Program lifestyle change program…”

“CDC Project 3–3: Children with Asthma is working to identify factors associated with asthma exacerbation in children following the 2017 Hurricanes Harvey and Maria and aims to establish or improve programs to reduce asthma burden among children during and after hurricanes.”

“CDC published a web‐​based data visualization dashboard to explore 1.4 million workers’ compensation claims in Ohio, creating a causation‐​specific injury surveillance system using existing claims databases.”

“CDC’s Data Linkage Program facilitated evidence building which supported policy decisions for the U.S. Department of Housing and Urban Development (HUD). HUD’s 2018–2022 Strategic Plan cited findings from the NCHS-HUD linked data files to support the continued removal of lead‐​based paint hazards in HUD homes.”

“Using CDC resources, the CPWR‐​Center for Construction Research and Training, piloted and launched best​built​plans​.org to provide contractors and workers with practical tools, microgames, and information to prevent injuries from lifting and moving heavy materials while staying productive and profitable.”

“In 2019, the Coal Worker’s Health Surveillance Program provided 8,398 chest x‐​ray screening examinations and reviewed 2,758 spirometry test results from its mobile unit and 40 Spirometry Clinics in 11 states.”

“CDC released the Dampness and Mold Assessment Tool for both general buildings and schools to help employers identify and assess areas of dampness in buildings.”

In coming months, Congress should reassess the CDC’s budget and consider some of the agency’s failures during the COVID-19 crisis. Policymakers may want to take a pruning knife to the CDC and refocus it on the core mission of infectious disease and epidemics.

In general, less is more with federal agencies. Federal mission‐​sprawl often results in overlaps with state, local, and private activities, and it distracts federal leaders from their core responsibilities.

Dave Kemp assisted with research for this post. 

May 13, 2020 8:34AM

Catch‐​11

The government's plan for saving small and medium-sized businesses from liquidation puts them in a bind that brings to mind the one Yossarian had to contend with. The problem, in a nutshell, is this: Chapter 11 bankruptcy may be many firms' best hope for surviving the present crisis. But to take advantage of it, they need credit—the cheaper the better. Firms can get cheap credit through either the Small Business Administration's (SBA's) Paycheck Protection Plan or the Fed's Main Street Lending Programs. But there's a catch: to qualify for these loans, they mustn't file for Chapter 11.

That's Catch-11, and it, too, is some catch.

In this post, I'll quickly explain how Chapter 11 bankruptcy can help firms survive the crisis, and why many firms may need financial assistance to take advantage of it. Next I'll explain why they can't get such assistance from either the SBA or the Fed. Finally, I'll consider some options for getting around Catch-11.

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May 12, 2020 3:53PM

SAFE‐​ty in the Time of COVID-19

By Jeffrey Miron and Erin Partin

The House of Representatives revealed a new 1,800 page long coronavirus relief bill today. Included is a provision approving the Secure And Fair Enforcement Banking Act (SAFE Act) of 2019, which allows cannabis manufacturers and sellers in states that have legalized or medicalized marijuana, to access the banking system, develop lines of credit, and be eligible for other protections. From the bill:

“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis‐​related legitimate businesses and service providers and reducing the amount of cash at such businesses.”

The SAFE Act was approved by the House of Representatives last October in a vote of 321–103 but has since been snarled in Senate committee hearings. While the current coronavirus relief package will likely fail in the Senate, at least some lawmakers are still trying to improve cannabis policy.

May 12, 2020 12:58PM

Tradeable Permits for Government Parks

By Jeffrey Miron and Erin Partin

As the weather warms and patience with stay‐​at‐​home orders wears thin, public parks and beaches are becoming the next front in the public health fight against COVID-19. One promising approach is issuing a limited number of tradeable permits, where:

“cities would issue free permits to all residents to be used for access to the most popular parks, beaches and other coveted public areas. A person could choose to sell unwanted permits, or trade them for a different kind of permit (to a different park, or for a different day, and so forth.)”

While critics of this approach might worry about exacerbating the economic divide – the financially struggling are more likely to auction their permits, thus excluding them from desirable public spaces – those fears are misplaced. Rather, the permit system gives everyone either access to highly coveted areas or the ability to sell permits to finance more critical needs. Both outcomes are preferable to keeping parks and beaches closed entirely.

May 11, 2020 3:33PM

The WTO Needs to Drag Itself into the 21st Century

The World Trade Organization (WTO) has recently been under fire. The Trump administration has called for its reform, but to date, its confrontational approach has aggravated allies and gotten in the way of any progress.

Now, amid the COVID-19 pandemic, work at the WTO has ground to a halt, which puts the institution at risk of irrelevance. The only multilateral talks the WTO is conducting, that is, negotiations that include the entire 164 country membership, are on eliminating harmful fisheries subsidies. These talks are now in jeopardy. A key obstacle is an inability to find a way to conduct negotiations remotely. As many of us are now working from home, it is fair to ask why the WTO can’t do so as well?

Last month, the chair of the fisheries talks, Ambassador Santiago Wills of Colombia, was hopeful that negotiations would continue in order to meet the deadline for a deal by this summer’s now cancelled Ministerial Conference. But recent reports suggest that technical difficulties are the heart of the problem. Hannah Monicken from Inside U.S. Trade reported the following:

The chair of the World Trade Organization negotiations to rein in harmful fisheries subsidies has concluded that members are not prepared to commit to virtual negotiations, telling members on Thursday that further work must be put on hold as they wait for pandemic‐​related restrictions to lift.

Colombian WTO Ambassador Santiago Wills, in a communication to members, said he had been receiving questions about next steps, according to a Geneva‐​based trade official. Based on his consultations with members and views presented at the heads‐​of‐​delegations meeting last month, Wills concluded that members were not prepared to engage in virtual and written discussions, he wrote.

Wills decided that the best course of action was to wait and see what comes next, the official said. 

The challenge is finding a way to replicate the face‐​to‐​face experience digitally as closely as possible so that these discussions may continue. This is no easy feat, since negotiations consist of countless meetings that happen not just with the entire membership, but also with a subset of countries. Lots of bilateral meetings also take place and are often critical in the last moments of securing a final deal. How to make this work in an age of telework is crucial, because even as restrictions put in place from the pandemic are lifted, it is not likely to be a smooth transition. In addition, if we are hit with a second wave of infections, stopping negotiations again is impractical if fisheries talks are to conclude this year, and worse still for our rapidly depleting fish stocks.

Last month, heads of WTO member delegations met virtually to discuss this problem and noted that while members are generally willing to talk informally through digital platforms, they are reluctant about making binding decisions, as the WTO has no current procedure for this. There are several valid concerns here.

Smaller delegations may rightly fear that they will be cut out of important discussions, there are also technological capacity gaps and security concerns. But finding a solution to these and other problems is not impossible. The United Nations quickly developed an interim decision‐​making procedure last month to allow countries to continue to vote on resolutions. And negotiations between the United Kingdom and the European Union on Brexit have moved online as well.

The WTO should be able to find a way to do this. It should prioritize getting negotiations back on track as soon as possible. As my colleague James Bacchus and I have explained, the fisheries talks are a crucial test case of the WTO’s ability to adapt to the changing realities of the global trading system. Getting these negotiations right is critical, and they won’t conclude unless delegations are willing to buckle down and put in the effort to make a deal.

Last week, Sen. Hawley (R-MO) suggested “abolishing” the WTO, which he followed up with a joint resolution in Congress for the United States to withdraw. Much of what Senator Hawley said about the WTO was factually incorrect and distracts from important conversations about how to make the WTO work better. There remain real challenges that the WTO faces, and the organization is far from perfect. The inability to conduct negotiations online is a key example of this and an area that is ripe for reform. If the WTO wants to survive the pandemic, its negotiating function needs to be brought into the 21st century.

May 11, 2020 10:36AM

Who Lends to Small Businesses?

This question has gained new urgency as the federal government scrambles to bring emergency funding to millions of small businesses across the country under the Paycheck Protection Program (PPP). The PPP consists of forgivable loans that borrowers may use to cover employee payroll, rent, and utilities for eight weeks. The Small Business Administration (SBA) manages the PPP, but funds are allocated by authorized private lenders.

Although the program ostensibly seeks to assist the smallest concerns in America, which cannot gain access to funding through other Fed and Treasury facilities, it came under strong criticism when it emerged that several rather large firms had benefited from it. Data from the SBA for its first ($342 billion worth) round of PPP loans corroborate these anecdotes: 44 percent of loan volume consisted of loans of over $1 million and went to just four percent of (presumably the largest) applicants.

The apparent inequity prompted public outrage, followed by a string of exculpatory press releases and stern official "clarifications" concerning eligibility for PPP loans. The public shaming seems to have hit a nerve: SBA data for part of round two lending, which will total $310 billion, show that loans under $150,000 accounted for 37 percent of volume, compared to just 17 percent in the first round. The average loan so far in round two is $79,000, against $206,000 for round one loans. Still, loans over $1 million represented 27 percent of total lending, and those loans went to just 0.96 percent of applicants. The big guys continue to get a large slice of the PPP pie.

This disappointing outcome has occurred despite a tweak Congress made to the program, ostensibly for the sake of getting more PPP funds to the smallest of small businesses. Of the $310 billion in round two funding, $60 billion was set aside for small banks, credit unions, and community financial institutions (CFIs).[1] Specifically, $30 billion was earmarked for banks and credit unions with assets between $10 billion and $50 billion, while another $30 billion was reserved for institutions, including CFIs, with assets below $10 billion. Thanks partly to this carve-out, lenders with under $50 billion in assets have collectively accounted for 48 percent of round two loans so far, while $27 billion (15 percent) of all lending has come from lenders under $1 billion, including CFIs.

It's tempting to suppose that small depository institutions are more likely to lend to smaller businesses. Didn't Bailey Building & Loan, the thrift in It's A Wonderful Life, serve the Main Street shops next door? Alas, life doesn't always imitate art: it turns out that the average large-bank loan is a lot smaller than the average small-bank loan. Since a commercial loan's amount is usually indicative of the borrower's size, these data suggest that large banks are actually more likely to cater to the smallest businesses. Specifically, recent FDIC filings show that the average small loan made by a bank with assets in excess of $10 billion was $13,250, against $40,650 for banks with assets between $1 billion and $10 billion, $30,170 for those between $100 million and $1 billion, and $42,095 for banks under $100 million.[2]

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May 9, 2020 3:21PM

Will This Novel Virus Revive Older Ones?

As I recently wrote here, and spoke about here, bans on elective surgery invoked by governors across the country in response to the COVID-19 pandemic have caused many people to suffer and even possibly face fatal consequences due to delays in necessary medical care. But there are other reasons why the public health emergency has the potential to generate secondary public health crises.

In some cases people are avoiding doctors’ offices and emergency rooms because they worry about handling the expense at a time they have seen their income, and perhaps their savings, vanish during the current economic shutdown. In other cases, people–particularly those with vulnerabilities–avoid medical care out of fear they might get exposed to the virus in the process.

Fear among vulnerable patients that they may contract and succumb to a COVID-19 infection is completely understandable. It is less understandable, however, when this fear makes parents forgo taking their children to the doctor’s office for routine vaccinations against diseases which are far more deadly and contagious, as the Wall Street Journal reported May 8. The timing of certain immunizations in children can be crucial. Forgoing or even just postponing them can have serious consequences.

Despite the fact that family practice and pediatrics offices have employed social distancing strategies to minimize the risk of COVID exposure to parents and their children if they come in for their scheduled vaccinations, the Journal reported:

The immunization rate for all recommended childhood vaccines declined about 40% in the U.S. from late February through mid‐​April, according to Physician’s Computer Co., a provider of electronic health‐​record systems. The data are based on vaccines administered by more than 1,000 pediatricians in 40 states who use PCC’s record system.

Concerns about a drop in the vaccination rate in association with the pandemic were also published by the Centers for Disease Control and Prevention. 

This is particularly unfortunate considering that children appear relatively spared by the COVID pandemic. According to the CDC, as of May 3 less than two percent of confirmed COVID-19 cases were among patients under age 18. The cases are almost always mild. The CDC report states, “In the U.S., as of April 2, 2020, there have been three deaths among children with laboratory‐​confirmed SARS‐​CoV‐​2 infection that have been reported to CDC, but the contribution of SARS‐​CoV‐​2 infection to the cause of death in these cases is unclear.” The fatality rate among adults under age 50 is likewise extremely low.

Meanwhile, diseases like measles and polio are much more deadly and contagious. Measles can lead to pneumonia, along with brain swelling and secondary permanent neurologic sequelae, such as vision and hearing loss and cognitive impairment. Measles can also be fatal. Complications of polio include paralysis. Parents must consider risks such as these when they fail to get their children vaccinated.

The World Health Organization reported 140,000 deaths from measles occurred globally in 2018, most under the age of five. Even polio virus, thought to be largely eradicated, is showing traces of a comeback, with worldwide reported cases increasing from 28 in 2018 to 163 in 2019.

It’s not only measles that poses a threat. Rotavirus, which can cause severe gastrointestinal illness in children is also a part of the standard vaccination package, as is immunization against Bordetella pertussis, the cause of “whooping cough.” Some vaccinations may protect against problems that can develop down the road. An example is the immunization for human papilloma virus (HPV), which can be a cause of cervical, anal, penile, and throat cancers in adults.

The Wall Street Journal article quoted one pediatrician as saying, “The numbers will tell you it’s guaranteed that some American kid today is going to die in 10 to 20 years of HPV as a result of Covid.”

It would be a great tragedy to see new pandemics, from pathogens previously believed to have been defeated, arise from the ashes of the current pandemic.

Public health experts should inform political leaders as well as the public about the dangers of COVID-19 and the best ways to avoid them. But policymakers and the public should also be told about trade‐​offs, as well as the relative risks faced by different demographic groups. Policies and personal decisions should be based on reason, not fear.