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Peter Navarro on Government's Response to Crisis; Borders Closing between Spain and Portugal; Death Toll Jumps in Italy; School Closures Hit Students Nationwide. Aired 9:30-10a ET
Aired March 16, 2020 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PETER NAVARRO, WHITE HOUSE TRADE ADVISER: Swabs stuck in Europe that we needed for the acceleration of the testing that's going to happen this week. So I got on the phone to the Pentagon and they graciously and immediately got us a mil (ph) air flight to go over there. It's on its way back now. It's going to land at 2:00 a.m.
The second problem we had was that once the plane landed, we needed to get those swabs to four different places, Athens, Ohio, Cranberry, New Jersey, Sunnyvale, California, and Los Angeles. So what I did is call up the CEO of FedEx, Fred Smith. He answered on the first ring. I told him what I needed. He said, yes, no problem.
NAVARRO: I got in touch with the logistics guy.
So as we speak, that's the kind of thing the White House is doing.
And what we've got, Poppy, is the full force --
NAVARRO: Not only of government, but the full force of American business.
HARLOW: Yes. No, I -- I --
NAVARRO: What I see here for the macro stuff --
HARLOW: I -- I hear --
NAVARRO: Sure. Go ahead.
HARLOW: I hear you, Peter, but I just want to note, we're -- the Dow is off 2,200 points. The S&P is off 8 percent. And you're a top economist at the White House.
HARLOW: Aare we heading into a recession? And I do appreciate the efforts you just outlined, but this is freaking people out, Peter. NAVARRO: It depends -- it -- yes, it -- look, here's -- here's what's
critical now, Poppy, it's the policy response.
NAVARRO: And we have to have four different vectors coming in all at once in Trump time in a matter of days, not weeks. And the comps (ph), here's what they --
HARLOW: Yes. But, Peter, what can you do? The market's off 2,000 points.
NAVARRO: Here we go. Here we go, Poppy. I'm running around --
HARLOW: I'm just asking, the Fed cuts rates to zero and the market's not -- the market's not responding well at all.
NAVARRO: Poppy, let me -- let me -- let me give you the four points of the compass.
HARLOW: All right.
NAVARRO: So one of them is, of course, the Fed. And what the Fed did is important for liquidity issues. The second thing was done last week and it's supposed to be finalized by the Senate, which is a relief package. The most important part of that relief package for controlling the virus is paid sick leave for workers. We don't want people to face the choice of going into work sick or staying at home and going broke.
NAVARRO: Now, the two other portions, which are really critical to making sure that we have the strongest recovery from the coronavirus is going to be a broad fiscal stimulus. Senate Leader Mitch McConnell said this morning that that's a top priority for Congress this week.
NAVARRO: What should that look like? Payroll tax cut until the end of the year. That's a 15 percent tax on workers and on employers.
HARLOW: OK. So --
NAVARRO: If you take that down, it's an $800 billion stimulus, Poppy, to the end of the year, and that's exactly what we need to put into place tomorrow.
HARLOW: Yes. Here -- OK.
NAVARRO: The other thing will be industry assistance for the heavily impacted industries.
HARLOW: Yes. Yes.
NAVARRO: So your -- you're talking -- we see what's going on in the market. We see what's going on, on the policy response.
HARLOW: I think corporate America should step up, as some great companies have done. I totally hear you on that.
HARLOW: Let's talk about the tools you just outlined, though.
HARLOW: A payroll tax cut doesn't do a lot for people who can't go out and spend that money because all the bars, restaurants and shops are closed. It's going to cost, according to the Tax Foundation, more than $900 billion to implement just from April to December. And the conservative Heritage Foundation just said last week it's probably not the tool to combat a pandemic. Is -- is that really the best answer?
NAVARRO: So, a couple of things. See, here's what's really important. We have to hit this from four different vectors. People who are unemployed, we have to help with unemployment insurance. People who are sick and can't go to work for a couple of weeks, we have to help them with paid hourly sick leave. Highly impacted industries. We have to develop a package for them. Fed did its thing.
But, Poppy, we -- $800 billion right now in the scheme of things is pennies in terms of what we have to do. So what we have to do and we have to do it very quickly --
NAVARRO: Is we have to coalesce around a broad fiscal stimulus.
NAVARRO: If somebody's got something better than the payroll tax, let's hear it. But I don't think there is.
HARLOW: OK, so --
NAVARRO: It's the best way to go right now.
HARLOW: So, Peter, the market -- just so everyone knows why the numbers on their screen aren't moving, the S&P 500 and the Dow that you're looking at, everyone, is halted because it fell more than 7 percent at the open. The market will be halted for 15 minutes to try to sort of calm fears, ease things. It will open back up. We'll see what happens. But the Dow is off 2,200 points, the S&P is off 8 percent.
Let's talk out other tools that you guys could use and I wonder if you're considering them, Peter. Are you prepared to guarantee credit lines, buy up corporate debt, ETFs, maybe even stocks?
NAVARRO: That's -- I'm going to leave that up to the Treasury secretary to talk about those particular things.
NAVARRO: I want to stay in my lane here.
NAVARRO: I've got two things to do, Poppy.
HARLOW: I hear you.
NAVARRO: I've got to make sure that the supply chain is whole so that we get masks, we get swabs, we get medicines.
NAVARRO: And the other thing is the broad fiscal stimulus.
That -- that -- that is so important, Poppy.
HARLOW: Yes, I hear you. And I would welcome Treasury Secretary Mnuchin on here any day. We'd love to have him on today to talk about what's going on right now, or any day.
Is there a consideration of closing financial markets as we saw after 9/11?
NAVARRO: I -- that's, again, not -- not my lane.
All right, let's talk about the supply chain, because this is your wheelhouse, Peter. I think most Americans don't know, 97 percent of antibiotics come to this country from China, 80 percent of the active ingredients in pharmaceuticals come from China and India. Are Americans going to have enough prescription drugs and over-the-counter Tylenol and ibuprofen for their kids?
NAVARRO: Part of my job right now, and we've got whole teams working both here at HHS and telecommuting on these issues. This week, I hope to bring to the finish line for the president an executive order which is designed to bring those supply chains home. It will provide both near-term and long-term relief in terms of this problem, Poppy.
HARLOW: OK, I --
NAVARRO: That executive order takes it on.
HARLOW: All right.
NAVARRO: But let me just explain how -- you're absolutely right, our supply chains are dispersed. That's why we have to have a military plane bringing in swabs from Europe instead of building -- making them right here.
HARLOW: Yes. Well, I just ask because it's unfortunate that we're at this point now, that in the last three years, for example, or (ph) administrations prior, this wasn't changed or addressed.
HARLOW: Finally, for this, the message from the president over the weekend is that this virus is under tremendous control, but Dr. Fauci, leading this effort, says the worst is yet to come and the cases, Peter, have doubled over the weekend. Markets are looking for leadership. Leadership is prescriptive. The markets here are reacting also to the president and his words.
Is he doing enough to put confidence in the market by saying something that's not under control is?
NAVARRO: Look, I -- Poppy, let's -- let's not -- let's not do that kind of thing right now. What we need to do is --
HARLOW: It's --
NAVARRO: Hang on, hang on, bear with me, Poppy.
HARLOW: Peter, it's not doing that kind of thing. The markets hang on every one of his words. You know this.
NAVARRO: Poppy -- Poppy -- Poppy, do me a favor now, it's like the message is from this president that we have the full power of the federal government. We have the full power of corporate America and business America. And that's where we're going. We know that what's going to happen, and Dr. Fauci has described it well, is that this virus is going to work its way through.
NAVARRO: What we need to do is flatten that curve through mitigation measures --
NAVARRO: Like paid sick leave for hourly workers. And as we do that, we have to make sure we have enough swabs, goggles, gloves, Tyvek suits, ICU capacity and that's what we're working full time on.
HARLOW: Yes, we do.
NAVARRO: The one thing I can assure the American people is that the president is fully engaged on this 24/7. He's directing teams personally. And we're -- we're -- we're going to get the job done for the American people to the best we can. And it is a shame, Poppy, that previous administrations have let all our medicines --
NAVARRO: Our medical supplies and our medical equipment be produced offshore.
NAVARRO: That's not going to happen again.
HARLOW: The Trump -- all right, well, the Trump administration has had the past three years to address this.
But, Peter, we wish you a lot of luck. I know you're working around the clock. And I always appreciate you taking the time to come and update us. It really matters.
Thank you very much.
NAVARRO: Thank you, Poppy.
HARLOW: The markets are halted because it is a precipitous drop on Wall Street.
We'll be back with you as soon as they open and stay on top of this.
HARLOW: Right now the outbreak continues of coronavirus across Europe. Today, Germany closed its borders with several of its neighbors in the Shenzhen region. Borders between Spain and Portugal will be closed by the end of today. Both Spain and Italy on nationwide lockdowns. Italy has now nearly 25,000 confirmed cases of coronavirus.
Our Melissa Bell is in Rome, journalist Al Goodman is in Madrid. Thank you both for being there.
Al, let me begin with you. Just closed the borders there. What does that actually mean for people in terms of coming home?
AL GOODMAN, JOURNALIST: Well, the people have already been told to stay home so there is some traffic between the Spanish and Portuguese border. But most of the country is not crossing that border. It's just a small part of the country.
I am right now in the Puerta del Sol, which is the center of the city. And you can see that this lockdown order makes this place empty. This is the metro station over here. Metro ridership is down 75 percent today from a week ago at this time.
Now, you can go to work under this emergency order, but so many of the small businesses here around the Puerta del Sol and up at the financial center of Madrid, they're already having their people work from home. Most -- all of the bars and restaurants and most of the stores are closed, including this one that sells Spanish fans. You've got hotels around here and across the country that are either empty or closed. This is a huge hit on the GDP, 11 percent, which is the tourism industry, which represents 11 percent of GDP. IAG, which has Iberia and British Airways announcing a 75 percent reduction in flights for April and May. And they're going to keep their retiring CEO, Willie Walsh, on for a little while to shepherd them through this crisis, which is showing signs of health impact and economic impacts.
Back to you, Poppy.
HARLOW: Yes. Yes. And it's that duality that is making this so complex and such uncharted territory.
Thank you, Al.
Melissa, to you. The numbers out of Italy are staggering, and experts are saying that the U.S. is on track for a similar increase day by day. What are you seeing there?
MELISSA BELL, CNN CORRESPONDENT: That's right, Poppy. In a sense, Italy is just a couple of weeks ahead of other parts of the world, other European countries, possibly the United States.
And, again, nearly one week after this extraordinary lockdown began here, record figures both in terms of the number of new cases announced yesterday, Poppy, and, tragically, in terms of the number of new deaths as a result of coronavirus. We've just been hearing from the Italian prime minister this morning who's warned that the peak hasn't even been seen yet.
So it gives you an idea really of how long it takes for a country to be on lockdown, an economy ground to a halt, people kept at home for any tangible results to be seen in terms of bringing the outbreak under control. And that, of course, is terrible news for the rest of the world as it looks on.
The Italian prime minister also working with his government this morning to work out the details of that massive stimulus plan that they've already worked out. Twenty-five billion euros have been pledged. Things like tax relief, mortgage relief for ordinary citizens, help with businesses. All of these measures and, he says, likely we're probably going to need a recovery plan as well when this is all over.
HARLOW: Of course they will.
Melissa Bell, thank you so much for that reporting. We appreciate it.
Let's take a look at the number. Guys, if we can pull the Dow up on the screen for everyone and the S&P. Let's drop the lower. There you go. So the S&P 500, that is the broadest look at the market right now, is off 10 percent. It is down 10 percent. The Dow Jones Industrial average weighing 30 different stocks, down almost 12 percent right now. Trading was halted at the open because we hit a circuit breaker, closed for 15 minutes to just sort of pause things. It has reopened and the decline continues.
Again, just to give your some perspective of where we are. First, when it comes to the S&P 500, a loss of 10 percent is the single greatest percentage loss, if this maintains until the close, that we have seen since 1929. If it closes there, that's what we're looking at. We'll be right back.
HARLOW: So as schools across the country shut down, shifting to online learning, I think a lot of us aren't thinking enough or talking enough about all of those low-income households where children rely on going to school every day to get their hot meals. Across the country, 22 million students depend on a free or reduced-price school lunch as the main source of their daily nutrition. But it goes well beyond the classroom. The U.S. Department of Agriculture notes more than 37 million Americans face hunger today. And as this pandemic spreads, food banks across the country are gearing up for the influx of need that is to come.
I'm so glad we have with us Claire Babineaux-Fontenot, the CEO of Feeding America, the nation's largest domestic hunger relief organization.
Claire, I keep thing about this, going to the grocery store, having the ability to buy what I need, right, as people are hoarding off the shelves.
CLAIRE BABINEAUX-FONTENOT, CEO, FEEDING AMERICA: Yes.
HARLOW: Talk to us about the need that those that relying on you have right now.
BABINEAUX-FONTENOT: Wow. Absolutely.
So first I should say that the people that we serve are very likely to be inordinately impacted by this crisis.
BABINEAUX-FONTENOT: So we're so happy and pleased that you would invite us to the program.
In terms of the things that we're --
HARLOW: What --
BABINEAUX-FONTENOT: Oh, I'm sorry, go ahead, please
HARLOW: No, tell us about the most vulnerable. How great is the need right now?
BABINEAUX-FONTENOT: Well, let me maybe divide this into three pieces here.
First, you talked about that 37 million number. Of that 37 million people, 11 million children in this country are food insecure. That means they do not have consistent access to nutritious food. I would consider them a highly vulnerable part of our population right now. Secondly, our population over indexes on some of the key
vulnerabilities that we've -- we're coming to learn based upon what the scientists are telling us make the likelihood of an impact of the virus even more acute. As an example, our population is three times more likely to suffer with diabetes, about two times more likely to suffer from hypertension. And 5.5 million people in this country, seniors in this country, suffer with food insecurity. So we have reason to be -- to have concern, but I'm really excited about the fact that we have a remarkable team, a network that cuts across the whole country who are really poised to try to be helpful here.
HARLOW: I know that you guys have launched a coronavirus-specific fund to help with meal support, but do you actually have enough boots on the ground to prepare the meals, to bag the food, to deliver it, especially to elderly people who can't leave their home right now?
BABINEAUX-FONTENOT: It's becoming an increasing problem, Poppy. So a lot of our volunteers are, in fact, elderly.
BABINEAUX-FONTENOT: In fact, a majority of our volunteers are elderly. They're not in a position to help at this time. We have to think about the safety of our employees, and we've seen a shrinkage in the number of volunteers who are signing up to help. So we -- right now we are forging through, but we do anticipate that there is going to be a need for some additional help and support for sure.
HARLOW: Do you have a food supply concern? I know there is not a shortage right now, I want to make that clear. But if people are going out and buying for months right now and hoarding groceries, as the president has said don't do, does that leave you guys without enough?
BABINEAUX-FONTENOT: Well, it can create an additional strain. So that's why I say, you know, there are a lot of things that we can do as a network, but we definitely need help from others. The government is an important part of this for us.
We're excited about a recently passed piece of legislation that got out of the House. I understand the administration has endorsed and now the Senate is going to be looking at. That legislation will provide some additional food to the people that we serve. It will also provide some additional flexibility in terms of our ability to reach out to people when they're in the middle of this crisis. So there is that -- that side of things.
We have a lot of donors across the United States, major retailers who have been partners of ours since our inception, in fact. It's going to require that they step up with us and find some really innovative ways to reach out to people that we serve. And then also the public. They're -- we have a website, feedingamerica.org, which is a great place for you to go no matter where it is that you're from, where you live, where you work, where you play in the United States, there's an food bank inside of our network that's serving that community that you care so much about.
If you go to feedingamerica.org, you can find -- there's actually a food bank locater on that website and you can find that food bank. So if you're trying to think about ways that you can help right now --
HARLOW: Yes, that's a way.
BABINEAUX-FONTENOT: I think the best way that you can do that, to help the people we serve, is going through that website.
HARLOW: Claire Babineaux-Fontenot, thank you for the work that you and everyone on your team does. We wish you guys luck. I know it's tough. Thanks.
BABINEAUX-FONTENOT: Thank you so much, Poppy. We appreciate you.
HARLOW: Of course.
We've got a very close eye on the market. Right now the S&P down about 9 percent, the Dow off its lows, down 2,100 points.
We'll be right back.