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White House Officials Predict Dire Unemployment Numbers for May; Shanghai Disney Reopens After Coronavirus Shutdown; White House Scrambles to Do Contact Tracing for Mike Pence's Infected Press Secretary; Coronavirus Death Toll Projection at 137,184 by August; 47 States Partially Reopen, Loosen Restrictions Amid Outbreak. Aired 9- 9:30a ET

Aired May 11, 2020 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:03]

POPPY HARLOW, CNN ANCHOR: Top of the hour. Good Monday morning, everyone. I'm Poppy Harlow.

JIM SCIUTTO, CNN ANCHOR: And I'm Jim Sciutto.

Just hours from the now, the president will hold a press conference on testing as cases of coronavirus inside the White House and subsequent testing and contract tracing undermine the president's message that the country is ready to reopen.

Here's what we know this morning. The White House spent the weekend scrambling to perform contact tracing after the vice president's press secretary tested positive for COVID. As of right now, Pence himself is not in self-quarantine.

HARLOW: But three other key officials are. Dr. Anthony Fauci, CDC director Robert Redfield and FDA commissioner Dr. Stephen Hahn all in self-isolation. A stark reminder that this virus knows no boundaries as restrictions do ease across the country.

Also this morning a stunning, a stunning new model, a key model upping its death projection to 137,000 people from COVID-19 by early August. That's in the U.S. The states to see, quote, "explosive increases in mobility."

Let's get to Joe Johns. He joins us at the White House this morning.

Joe, good to see you. What is the sense inside the administration this morning as we are getting ready in a few hours to hear from the president on testing?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Poppy, as you know, a lot has changed here at the White House since last Friday after Katie Miller, the vice president's press secretary, was tested positive for coronavirus. After that, we're told by the reporting from my colleagues that officials did spend the weekend trying to trace the contacts of Katie Miller to determine where she got it. So far we're told they haven't been successful in figuring that out.

So the question now is, who is quarantining at the White House and who is not? And there's not a lot of certainty. But I can tell you that this much we know. Katie Miller, the vice president's press secretary, who also happens to be the Coronavirus Task Force person who deals with message, she is in fact going to go ahead and quarantine along with the FDA commissioner, that's Stephen Hahn, and the CDC director, that is Robert Redfield.

Now the people who are not going to be quarantining include the vice president himself, even though his press secretary tested positive, the HHS secretary, as well as the surgeon general.

Back to you.

SCIUTTO: So, Joe, President Obama has been quiet usually on the politics of the time or has held his fire, but he's offering strong criticism of the administration's response efforts to COVID. What is he saying exactly?

JOHNS: Yes, this was one of the occasional calls that the former president holds with his alumni, people who worked in his administration. Some question as to whether anybody knew that tape was actually going to be leaked, but the president unusually critical of this administration's handling of coronavirus. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, 44TH PRESIDENT OF THE UNITED STATES: It's part of the reason why the response to this global crisis has been so anemic and spotty, and it would have been bad even with the best of governments. It has been an absolute chaotic disaster. When that mindset of what's in it for me and to heck with everybody else, when that mindset is operationalized in our government.

(END VIDEO CLIP)

JOHNS: Now President Trump did respond to the reporting over the weekend of this audiotape. He retweeted a tweet that he'd put out earlier saying its administration was getting high marks on handling of coronavirus, and also denigrating the Obama-Biden administration for its handling of h1n1 swine flu. Back to you.

SCIUTTO: Joe Johns at the White House, thanks very much.

Let's talk more about this key model's projections including increasing the projected death toll from the CNN senior medical correspondent Elizabeth Cohen joins us now.

Elizabeth, so death projections, and again these are projections built on models but that death toll rising, is that about reopening? Is that what they're calculating in?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Jim, it certainly is. You don't need a PhD in immunology to know that when people get together more, the virus is going to spread more. So first, let's take a look at the U.S. number, and this is from the respected model IHME out of the University of Washington that the White House often refers to and uses. So currently they're projecting 137,184 deaths by August.

[09:05:03]

Just one week ago, they were predicting fewer, 134,473. Again, that's because we've been seeing more and more mobility. To that point, let's look at two specific states. Arizona, which has been more on the opening up end of things has 1,944 deaths more than what they thought last week. Michigan actually has 864 fewer and Michigan is on the more restrictive end of things. So you can just see comparing those two states what mobility does -- Jim, Poppy.

HARLOW: Elizabeth, thank you very much. You certainly can see that. Several states are aiming to reopen even more today.

Let's go to our colleague Rosa Flores. She joins us from Florida. Many places in the state moving to phase two, so what is phase two? What does that actually look like?

ROSA FLORES, CNN CORRESPONDENT: Hi, Poppy. Well, let me take you around the country. Some states reopening retail for the first time today, including Indiana at 50 percent capacity. New Hampshire is reopening as well, with several restrictions, including the fact that retail staff will have to get screened before going to work.

On to restaurants, Arizona and Arkansas will be reopening restaurants today, with social distancing. Indiana will be allowing dine-in service, but only at 50 percent capacity. Two states will be reopening manufacturing today, that's Kentucky and Michigan, with the three big automakers in Michigan reopening their doors, but workers there should expect to get screened before entering those facilities.

Now here where I am in Florida, Palm Beach County will be joining Florida's other 64 counties in phase one of the reopening plan, that means that restaurants and retail can reopen at 25 percent capacity. Barbershops, nail salons and hair salons will also be able to reopen for the first time today. Meanwhile, there are two counties who are still under full restrictions, and that is Broward and Miami-Dade, where I am now -- Jim.

SCIUTTO: Rosa Flores in Miami, thanks very much.

Let's speak now to Dr. Rob Davidson. He's an ER doctor who serves as executive director on the Committee to Protect Medicare.

Doctor, great to have you on this morning. You're, in fact, more pessimistic about the overall estimated death toll than that White House model. You tweeted, "It's impossible that we're less than 100,000 deaths by the end of May depending on what we do next. I find it hard to believe that we're less than 200,000 by the end of July."

Of course that White House model now has it up to about 137,000 and I know these are models and they're based on incomplete data, but why do you see a much more marked increase in the death toll going forward? DR. ROB DAVIDSON, ER DOCTOR: Well, I think the models actually do show

about 100,000 by next Friday, so to me, it is impossible that over the next two months, June and July, 60 days plus, that we have, you know, less than say 1500 or so new deaths a day on average. I think some models have suggested up to 2,000 new deaths a day. And we just know that, we are not doing enough testing in almost every state.

Certainly President Trump has suggested that he doesn't think testing is that important. However now that the White House is a hot spot for coronavirus, they are increasing their testing, so these mixed messages and the lack of adequate testing I think along with reopening and people getting together more just I think projects a pretty grim outlook over the summer.

SCIUTTO: OK. Let me ask you this. Initially, the reason for the shutdowns, the stay-at-home orders was to flatten the curve, in other words, lessen the rate of infection, but not eliminate it. In other words not keep everybody from getting infected.

I just wonder, what is the intention now of stay-at-home orders? I mean, has that become the new goal to reduce the overall infection rate around the country?

DAVIDSON: Well, flattening the curve does presupposes you decreased the infection rate. That are not numbers that says, you know, how many people one infected person may infect. Once you get that below one that's how you flatten. But really flattening the curve buys us time and it should have bought us time to really ramp up our testing regimen in this country. Unfortunately the president had refused to use the Defense Production Act to help us do that.

So that's what flattening the curve should have done. That's what staying at home should continue to do if we can get the administration on board.

SCIUTTO: But if you don't get the administration on board, right, because the president has said as you note that testing to some degree is overrated or broad-based testing overrated even as it takes place to a great degree inside the White House, without that testing, are you saying the country will in effect have to stay largely closed until there's a vaccine?

DAVIDSON: Well, if we in fact want to minimize the number of deaths and actually increase our likelihood of having an economic recovery that's lasting, that's what we would have to do.

[09:10:01]

I think it's obvious that that isn't what's going to happen in most places, largely from mixed messages from the White House and states not going through the White House phases of reopening, and so we're just going to have to accept that there will be more deaths and we will not have a lasting economic recovery. I think the worst of both worlds is what we're looking at over the next three -- at least three months or so. SCIUTTO: Explain that argument, if you can, because it is often

presented as a choice between A or B, right, that you keep down infections but you have no economic growth or you allow economic growth, you know, to proceed, the economy to reopen but you're saying in effect that's a false choice.

DAVIDSON: It is absolutely a false choice. I think we look at, at least I think 80 percent or so of people are concerned that we're opening too quickly. I'm not going to be going out to restaurants. You know, I go to stores now, I go to a grocery store, and if I walk up to the door and see that the people at the desk aren't wearing masks or a significant number of patrons aren't wearing masks I turn around and I go to a different one.

And these are the decisions that real people make every day. Economic activity doesn't just happen magically because we say it should and I think as we see the death tolls going up, as we see the numbers going up, that concern by consumers is just going to increase, and again, no economic recovery will be possible.

SCIUTTO: Oddly, is what we're seeing take place in the White House right now something of a panic to contact trace the vice president's spokeswoman who has been infected, test other people, wear masks, all this kind of stuff, with uniformity, I mean, is that what should be happening on a larger scale in the country? In other words someone is affected, contact trace, see who else they had contact with so you can figure out who else might be infected, et cetera, test, wear masks, et cetera?

DAVIDSON: Absolutely. Every person who is infected who is testing positive should be isolating, so not in contact with any other person, and in fact, you know, Miss Miller has the resources to do that. I think the rest of our country many people don't. So we need to get them the resources so they can do that. And then anyone with whom they are in contact should be doing quarantine so they should be staying out of the public life unless they have a critical infrastructure job.

I would argue that Vice President Pence, perhaps President Trump should be in quarantine, and they can still do their job via teleconference, getting a message out to the country that they want to get out, hopefully the right message, but whatever message they choose, and I don't see that happening uniformly in the White House right now.

SCIUTTO: Well, it's notable there that the folks who are in self- quarantine are the doctors, right, at least three, it appeared, the doctors are the ones, although the surgeon general has chosen not to.

Rob Davidson, thanks so much. Good to have you on the program.

DAVIDSON: Thank you.

HARLOW: Still to come, if you thought April's jobs report was as bad as it could get, White House officials now say May will be even worse. Ahead, Bank of America CEO Brian Moynihan joins us exclusively. SCIUTTO: Plus, Shanghai Disney has reopened after more than three

months, but things won't look exactly the same. CNN goes there to show what you it looks like on the other side.

And every day potentially risking their lives during this pandemic. I'm not just talking about medical workers. I'm speaking about transit workers. So how are they protecting themselves?

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[09:15:00]

POPPY HARLOW, ANCHOR, NEWSROOM: All right, on Friday, we got the worst jobs report in American history, but it is going to get worse before it gets better. White House officials now predicting even more dire unemployment numbers in May, 20 percent or higher, but White House economic adviser Larry Kudlow also made this prediction yesterday.

(BEGIN VIDEO CLIP)

LARRY KUDLOW, WHITE HOUSE ECONOMIC ADVISER: We're preparing to reopen the economy, and when we do, I think according to the Congressional Budget Office and a bunch of private surveys, we're going to see a very strong second half of the year, probably 20 percent economic growth.

(END VIDEO CLIP)

HARLOW: Bank of America CEO Brian Moynihan joins us exclusively over the phone. To put in perspective, one out of every two households in America is a Bank of America customer. Brian, it's good to have you, thanks for taking the time.

BRIAN MOYNIHAN, CHIEF EXECUTIVE OFFICER, BANK OF AMERICA (via telephone): It's good to be here, Poppy, thank you.

HARLOW: So, you know, Kevin Hassett at the White House told me just last week that real unemployment, so counting the underemployed and those not looking for work is more like 25 percent in this country, and Moody's just said it's going to take until mid-decade they think to bring jobs back to levels they were before this. Do you think it's going to take until mid-decade?

MOYNIHAN: Well, I think Poppy, the ERs have to step back and remember, this is a healthcare crisis that precipitated an economic crisis. And so, as the healthcare crisis mitigates, you'll see the economic crisis mitigate and a company like ours and just on unemployment, we take a view, we have our economists and stuff which we could get into. But we'll take a view that one of the roles we have as a major employer was to be employee-centric in our approach.

So, we as a company said no layoffs for the year, for the last year, to make sure our own employees could do what they do best, which is help our customers through this tough time. And so on the other hand on the customer side, we're trying to help with unemployment there by providing loans to our customers, who -- you know, companies so that they can make it through the trough of demand and get to the other side.

And we did about $50 billion or $70 billion in the first quarter, and then also, we're working with the government programs and then we're providing the furloughs to consumers. So, I think the question of unemployment is going to -- you know, this is the worst of it right now as you're hearing, and it may get a little worse. But the reality is, the key is to get the economy restarted, and we're starting to see the economy restart even before the openings this last couple of weeks, it will start to come off the bottom.

HARLOW: You, Bank of America said about this economy and coronavirus, this pandemic quote, "will completely reshape geopolitics, societies and markets." How confident are you, Brian, that this recession, right? That this does not turn into a depression?

MOYNIHAN: Well, I think you know, this is a very severe down-turn this quarter, and we're in the heart of it right now.

[09:20:00]

And so, yet, our economic team, a Bank of America research team which was the best in the world predicted this quarter would be down about 30 percent, next quarter would be down about 1 percent, and it starts to grow in the fourth quarter 2020, but it takes all the way to the end the next year to get an economy which is about the same size it was last year.

But if you look at the spending buy, the consumers of Bank of America today in the last four weeks, the spending averaged about what it did in the Fall, 2017. So, there's an interesting thing here that consumers are spending slope, starting to grow a little bit. And the question is, will the amount of stimulus and stuff provide a bridge across this river that is a very serious economic decline, and if it does, then I think we'll see, we'll come out of this how fast will be up to sort of what the final demand and for products and services --

HARLOW: Yes --

MOYNIHAN: With this.

HARLOW: I wonder though about businesses that can't come back. I'm sure you saw that paper, you know, just in the last few days at the University of Chicago and Stanford where the economists there predicted 42 percent of businesses may never -- may never come back, right? I mean, that's where the question of a depression comes in. What do you see?

MOYNIHAN: Well, what we're seeing now is that the structure of this change was so different. So starting in sort of mid-March to mid- April, you saw the collapse in employment levels just because think about dentists shutting down, dentists employee about a million, a million and a half people, they're down about a half million in employment. And so, they contribute a lot. The medical field generally was shut down except for the courageous

people who were out fighting the virus. So as that reopens and people go into the dentist again in many cities now, you'll see part of that economy come back. That's what makes us very different, versus a general decline in consumer-spending or general decline in consumer confidence or activities which was more present in the last crisis. This was a shutdown, so things that typically continue to have rise in demand --

HARLOW: Right --

MOYNIHAN: Were stopped. And that was medical service and things like that. And as they come back, you'll see part of the economy recover faster, and then it'll take a long time for regular restaurants and things like that --

HARLOW: Yes --

MOYNIHAN: To recover.

HARLOW: Oh, and that long time I think is what so many of us are worried about. Look, you are a member of the president's advisory council on reopening the economy, and the White House message this weekend on a fourth stimulus, I think was really clear, and it was we can wait, we can pause. And I wonder if you think this economy can or would it be beneficial to the broader economy to inject a fourth stimulus that includes for state and local governments now.

MOYNIHAN: Yes, I think as we look at it, the stimulus that was put out, whether it's the EIP payments, the $1,200 payments, they're still going into the system, and we've seen our customers have spent as best as we can estimate about half that money, so the other half is to be spent. The unemployment supplements are still out there through the next couple of months.

And then on top of that, the PPP and the programs to lend to small business are really going out and hitting the street in the last couple of weeks so-to-speak. So, all that stimulus is coming together, so I think the debate is do you have to see that work through for a while or do you need more now? I think --

HARLOW: What do you think?

MOYNIHAN: The places that are hurting, I think, the state budgets because of just the stop in revenue and the other things. Hospitals, they need to target this, I think for people who are most -- look at institutions that are most affected by it and people --

HARLOW: Yes --

MOYNIHAN: Most affected by it, I think would be the advice I give on the fourth stimulus.

HARLOW: Can I ask you about the issue of inequality because I think what we saw in those -- clearly in those jobs numbers on Friday, Brian, was that it's hitting African-Americans and Hispanics much harder. Their unemployment rates are much higher than white unemployment now in this country. Should corporate America and government right now be doing more or what should be done to address that --

MOYNIHAN: Well --

HARLOW: Because the thinking is, it's only going to get worse from here.

MOYNIHAN: Yes, I think -- so, I think the companies that the large companies in particular who, you know, believe in stakeholder capitalism, believe in what the BRT signed or what the world business roundtable signed or what the World Economic Forum have all taken an employee centric. So no layoffs by our teammates. We went to $20 an hour in March of 2020 as a minimum wage. That's starting wage.

We've hired 3,000-plus people over the last eight weeks to supplement our workforce to help it. So I think the large employers, it's incumbent upon us to provide great benefits. We provide child care so our people can be more effective at work. We provide overtime pay and extra pay -- and I think the big employers are trying to do that, who are opening for business.

And I think it's incumbent upon us to think about stakeholder capitalism, the broader capitalism right now. Well --

HARLOW: Yes --

MOYNIHAN: Some businesses just can't do that because A, size or B, just the very nature of business, there's no demand for the products.

HARLOW: Well, I think you bring up a good point, and that's what's the role of a corporation right now, and that's a bigger question. Is it sort of Milton Friedman and the business of business' business or is it more? Because for example, child care, you're providing it for everyone, paying people to hire child care right now at your company.

Many economists are saying the economy cannot get back until everyone has that. Because how can -- my kids Summer Camp just got canceled. How can people --

MOYNIHAN: Right --

HARLOW: Go back to work without that? Do you agree with those economists?

[09:25:00]

MOYNIHAN: Well, I think that's why we provided it. So, I think that the benefit we provided was not only provide child care which we always provided to people in the lower pay strata of the company. But what we did is, we said, look, you can hire instead of having to go to child care center, you can hire a friend, you can hire a cousin, you can hire a teacher who is not working, whoever, to take care of your kids. And that we provide $100-plus a day, and so we had 400,000 days

requested from our teammates about -- to do that. And we believe that's critical so they can be productive and effective at home to serve our clients or our customers. So, I think if you think about these programs, the questions of Summer Camps, the questions of schools next Fall, all these things are the more difficult things, and I think we need to think about how to get those structures in place so that people can go back to work and go back to work with confidence as their kids are well taken care of.

HARLOW: Well --

MOYNIHAN: And I think as you think about a fourth stimulus or other activities --

HARLOW: Yes --

MOYNIHAN: We have to gear them to where we need to do the most help benefits for certain people who are more affected by the work shutdowns or people who need better child care in the context that's going to be hard to provide --

HARLOW: Yes --

MOYNIHAN: That care in an old-fashioned way, we need to provide that.

HARLOW: I have a question on PPP in a moment. I'll get to that, but I do have this question to build on that, and that is, all of this costs companies and it costs companies a lot of money. And I guess my question to you is what's the role of big publicly-traded companies in the middle of this crisis, right? Because it costs companies and therefore it costs shareholders. Should that not matter right now? Should a company be willing to take in less profit for as long as it takes to sustain its workforce?

MOYNIHAN: Yes, we need to make sure we have 210,000 teammates who can do a great job for our customers. Every day about 400,000-500,000 people come into our branches. Every day, we get millions of phone calls, every day, there's millions of trades. And so, you know, we're a people company, and to have the people fired up and working even in this really odd times where we moved to 180,000 people to work from home in a few weeks.

You know, we have to make sure they're comfortable and they feel safe. And as we start to reopen offices, we have to make sure they feel safe going back to work. And so we have the luxury of how we're planning that is different than other types of companies because we're open and operating every day.

HARLOW: All right, Brian, let me just end on this because obviously PPP, the lending program has gotten so much attention. There's been a lawsuit filed against Bank of America, and a number of the other big banks arguing that basically, you guys and the other big banks prioritized applications for higher loan amounts than the small guys in the first round because that would bring more money to you guys. Were PPP loan applications for larger amounts prioritized at Bank of America?

MOYNIHAN: Yes -- no. We've now done 300,000 SBA loans for about 25 billion. So, we're 7 percent of the program in terms of the numbers of loans, and less than 5 percent in terms of dollar amounts. So, we're actually doing smaller loans than the rest of the participants in the program. And we have out there -- working on it, we have 10,000 teammates. Again, it's a big cost to the company, but it's a thing we need to do and we continue to provide 300,000 small businesses, 98 percent of the people have less than a 100 employees and about 80 percent have less than 10 employees.

So, these are kinds of businesses the Congress intended to get to, and we're providing that money every day, and we still have applications coming in every day and we're processing them.

HARLOW: Brian Moynihan, thanks for your time and your outlook on the economy and jobs, and good luck to all those -- all those employees. Appreciate it.

MOYNIHAN: Thank you, stay safe now.

HARLOW: You got it. So, for the first time in months, the Disney Theme Park, this one is open to the public. It's not the one in California or Florida. This is Disney Shanghai, but guests face a long list of new rules to prevent the coronavirus from spreading at one of the happiest places on earth, next.

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