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Nearly 3 Million Americans Filed Unemployment Claims Last Week; Texas A.G. Warns Cities to Loosen Restrictions; Texas PPE Maker Set to Testify That U.S. Government Ignored His Offer to Produce Millions of Masks. Aired 9:30-10a ET

Aired May 14, 2020 - 09:30   ET

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

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[09:32:22]

POPPY HARLOW, CNN ANCHOR: Another dire jobless claims number. This morning, nearly 3 million more Americans file for those first time unemployment benefits just last week.

JIM SCIUTTO, CNN ANCHOR: I mean, in any other time, 3 million in a week, in a month, I mean, these numbers off the charts.

Altogether, 36.5 million Americans out of work just since mid-March.

CNN chief business correspondent Christine Romans joins us now to break it down.

Goodness gracious, another 3 million people.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know, it's so off the charts, it's like doing a weather report and saying, it's sunny and 250 degrees Fahrenheit in America today. You know, it's just a number that just doesn't go with the vibrant, dynamic American job market, a really deep hole. I mean, I guess the only, only bright spot is that the numbers have been slightly decreasing over the six weeks.

But that's really -- I mean, those numbers are just so big and devastating, every single one of them is a family trying to figure out how to file for an unemployment benefits, waiting to get unemployment benefits. We know from a "New York Times" survey that about a half of families by the beginning of May, haven't gotten the first check yet.

So, this is -- this is painful. This is just really painful.

HARLOW: Christine, the market did not like what the Fed Chair Jerome Powell said yesterday. You can see the fallout continue today. I mean, how should people get his head around the statement that this damage could be permanent if it's not mitigated by what he sounded like was support of more stimulus now.

ROMANS: I think I heard him begging Congress to be even more proactive, didn't you? I mean, usually the Fed remarks are couched, it's speak right. He said that it's hard to capture -- it's hard to find the words to capture the pain of American families and what -- what the recovery looks like, how we build this bridge over this deep, deep hole we're in will depend on what Congress is doing now, and more fiscal action.

A lot of money has already been deployed, record amounts of money. And you hear from Republicans, they want to see what works best before more is spent. But what you're hearing from the Fed chief is more we'll have to be done to make sure that recovery is truly a recovery, and you don't have permanent scarring of the labor market.

HARLOW: Thanks so much on both.

As the president publicly disagrees with Dr. Anthony Fauci about reopening schools and colleges and universities, they need guidance, clear guidance from the CDC on what they're supposed to do.

SCIUTTO: Yes, they're searching for it. The White House held an information session with academic leaders who stressed they need that clear and articulate measures for safety played out for them. Both Harvard Medical School and Stanford University have already decided that fall classes will be given online. You saw that with the UC System as well.

[09:35:01]

CNN correspondent Evan McMorris-Santoro is in New York with more.

When can school expect an answer? And I wonder as they wait, we're seeing them make their own decisions, many of them, aren't we?

EVAN MCMORRIS-SANTORO, CNN CORRESPONDENT: Well, that's right, Jim.

I mean, the short answer to your question is, it depends. We all know from this pandemic experience that your experience will vary based on where you live and who is in charge. It's the same thing for schools.

You know, we can look at two schools that came out with information this week. We talk about Harvard Medical School, obviously, one of the most important medical schools in the country. They announced that all of their first year students will be taking their first semester classes online. Some returning students will have some on in person education, but the goal is to have all of them back in January 2021, but that hasn't really been decided yet, but the first students, their first semester is decided.

Now, at Stanford, another school, we're talking about undergraduate students have been told, prepare for a hybrid system in which maybe possibly vast numbers of students don't return to campus while others do, maybe a different schedule, maybe a different way of working on it. That plan has been -- not been finalized yet but the school telling students to prepare for something very different.

It all speaks to what's happening across the entire country which is that schools are making decisions sort of on their own and trying to figure out what to do and then they're also making the decisions based on a future they don't know yet. What the world is going to look like in August or September.

So, for now, for students and parents and people that work in schools, there's a lot of hurry up and wait with some real questions about what things are going to look like when this is all over with.

SCIUTTO: Yes, universities, colleges, middle schools, high schools, well, a lot of folks waiting for answers.

Evan McMorris-Santoro, thanks very much.

HARLOW: Thanks, Evan.

The Texas attorney general is threatening to sue local leaders from imposing stricter coronavirus guidelines than the state has set out. We'll talk to the major of Austin. He just got this letter from the attorney general. What is he going to do? Next.

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[09:41:33]

SCIUTTO: Welcome back.

These are images moments ago as Dr. Richard Bright enters the Capitol before his testimony. Note he's wearing a mask there as recommended by health officials. He's going to be speaking today about his whistleblower's complaint, talking among other things about being pressured to promote a treatment touted by the president, even though that treatment was unproven. When he speaks, we're going to bring those comments to you live.

HARLOW: Absolutely. Meantime, tensions is escalating in Texas.

State Attorney General Ken Paxton warning major cities in the state to loosen their restrictions that go further than state issued guidelines or they could face lawsuits. One of several things the A.G. takes issue with is the city of Austin, telling people to wear masks in public while the state is only encouraging people to do so.

The mayor of Austin, Steve Adler, joins me now.

Look, I read through the whole letter this morning. It's fascinating and the language and the word choice. The attorney general writes that your public health orders are not only sort of confusing the public, but he calls them unconstitutional and he says they trample on religious freedom.

What do you say to him?

MAYOR STEVE ADLER (D), AUSTIN, TEXAS: It's not true and it's unfortunate because this is really the first real politicization of this virus crisis and, frankly, I'm just not going to follow the attorney general down that road. But the example that you gave, face coverings. Our governor and lieutenant governor have both been real strong advocates for wearing them. We had a policy and an order in the city that made it mandatory. The governor issued another order that even while he still said it's real important to do, he said the cities could no longer have a criminal or civil penalty associated with the failure to wear a face covering. Believing it's still real important, we have kept it mandatory here in Austin, but we have specifically said there's no criminal or civil penalty.

We've seen the penalty is that more people are going to get sick and some of them are going to die and we're hoping that that's penalty enough. Effectively, we're at the same place that we're following the governor's order.

HARLOW: Yes.

ADLER: But from a messaging standpoint, people in the community are confused. If it's important, then why is it that the governor says we can't enforce and (AUDIO GAP) focusing on health in my community, I have to be real consistent that the message is consistent and strong that everybody should continue wearing face coverings in public.

HARLOW: Well, it actually does seem like the same message, it's just the difference in terms of semantics if you're not enforcing it in terms of arresting people or issuing a summons. But he says you're in legal liability here. I mean, it sounds like they're threatening to sue you.

So what would you do?

ADLER: Then we'll respond. I'm confident that the order that we have in Austin is consistent and complimentary of the governor's order. In fact, our governor is trying to reopen businesses and if he's going to be successful in that, it's going to be due in part because the communities around Texas are being disciplined and vigilant about things like wearing face coverings. So, it's actually something that we believe furthers and supports the governor's order.

HARLOW: Can we just talk about the economy there in Austin? And I know it's actually faring better than many because many of your residents can work and do have the ability to work from home? That's not the same for so many. But you I'm sure heard the comments yesterday from Fed chair Jerome Powell saying that if mitigation efforts are not done quickly, more aid from Congress, then the economic toll this is taking, some of it could be permanent on the U.S. economy.

[09:45:11]

Can you just talk about the impact on small business in Austin? How many do you think are at risk of never reopening?

ADLER: You know, the economic hazard here is severe. You know, the number of people that are filing for unemployment -- we just had another iconic restaurant close that's been here for decades. We have lost several already. It is painful and it is -- it is hurt hurting. We may be doing better

relatively than some other places and in that way, we're lucky and then blessed, but it's still real hard here and real hard for the people that live here. I think that we need to figure out ways that we can be reopening the economy.

I'm just real focused on making sure that we do it in a way that maintains the public health.

HARLOW: Yes, of course. Mayor Steve Adler, thank you. Thanks so much for your time. Good luck.

ADLER: Thank you very much. Be safe.

HARLOW: Jim?

SCIUTTO: Well, a Texas factory owner is set to testify soon that the federal government ignored his offer to make millions of masks. He says he has warned of a PPE shortage in this country for years.

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[09:51:00]

HARLOW: Moments from now, Texas PPE factory owner, his name is Mike Bowen, you probably read about him this week, he's going to testify before Congress. He says the company ignored his company's offer to produce more than a million N95 masks per week.

SCIUTTO: Yes, he wondered what difference that could have made.

CNN national correspondent Ed Lavandera joins us now from Dallas.

So, Ed, Bowen sounded the alarm on PPE shortage issues to you, you say, more than a decade ago.

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: Yes, Mike Bowen has been talking about this issue since the mid-2000, 2005, 2006, around there when he first started this company here in Texas. We spoke to him in 2009, and in the early days of the coronavirus pandemic, we all know there was this dire need for PPE, and Mike Bowen says no one in the federal government was listening to him.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): As the coronavirus was quickly spreading around the world, Mike Bowen was inside this mask-making factory outside Ft. Worth, Texas, firing off emails to federal government officials, letting them know his company could produce millions of masks.

Bowen is the co-owner of Prestige Ameritech, one of the last mask manufacturers in the country. For weeks leading up to early April, he was working to get the Trump administration's attention in news media interviews. UNIDENTIFIED FEMALE: What percentage of your orders come from the

federal government? And I suppose I'm asking in part because we keep --

MIKE BOWEN, CO-OWNER, PRESTIGE AMERITECH: Zero.

UNIDENTIFIED FEMALE: Zero? It's all private customers, hospitals, and so forth?

BOWEN: Yes. It's hospitals and hospital distributors and dental distributors. We haven't done business with the federal government since 2010.

LAVANDERA: The saga of Prestige Ameritech's efforts to fill the demand for masks, highlights the early missed opportunities to equip frontline medical teams with supplies they desperately needed. The story is part of the whistle-blower complaint filed by Rick Bright, a former director with the Department of Health and Human Services, who says his early coronavirus warnings were ignored by the Trump administration.

On January 22nd, the day after the first coronavirus case was detected in the United States, Mike Bowen wrote HHS officials and said: We still have four like new N95 manufacturing lines. Reactivating these machines would be very difficult and very expensive, but could be achieved in a dire situation and with government help.

An HHS official responded, I don't believe we as a government are anywhere near answering those questions for you yet.

Two weeks later, with still no federal government orders for masks coming in, Bowen wrote again to Rick Bright, Please ask your associates to convey the gravity of this national security issue to the White House.

The Trump administration has repeatedly touted its effort to stock the PPE supply chain, even though it wasn't until early April that President Trump invoked the Defense Production Act to produce N95 masks.

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: We've put a priority at the President's direction on making sure those that are providing health care services to America have the protection to keep themselves and their families safe.

LAVANDERA: In an e-mail to CNN, White House Coronavirus Task Force member Peter Navarro said Prestige Ameritech was extremely difficult to work and communicate with.

But few people understand this issue as well as Mike Bowen, few have been sounding the alarm as long as he has. We interviewed him 11 years ago during the H1N1 pandemic. Back then, he warned that not enough PPE was being made at home.

BOWEN: If there's a pandemic, America won't be able to supply its own needs because we're pretty much it. And all the other mask manufacturers have left the country.

LAVANDERA (on-camera): Is there just no stockpile of masks available?

BOWEN: What I was told by government representatives in November of 2007 is that for a category 5 pandemic, they have only about a 1 percent stockpile on what they need.

LAVANDERA: One percent?

BOWEN: One percent.

LAVANDERA: But we can blow through that in a week probably I bet?

[09:55:00]

BOWEN: That's what we've been telling them.

(END VIDEOTAPE)

LAVANDERA: And, Jim and Poppy, after weeks of making his case, Mike Bowen's company did finally get a FEMA contract to make those N95 masks about a month ago, more than two months after the first coronavirus case was detected here in the United States -- Jim and Poppy.

SCIUTTO: Ed Lavandera in Dallas, thanks very much.

HARLOW: Amazing to see.

All right. We're moments away from that man you just learned about, Mike Bowen, and Dr. Rick Bright testifying on Capitol Hill. You'll see it all right here.

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HARLOW: Good morning, everyone. Top of the hour, and it's a big one ahead. I'm Poppy Harlow.

SCIUTTO: And I'm Jim Sciutto.

In just a moment the ousted vaccine chief, Dr. Rick bright, will testify on Capitol Hill. Based on his opening testimony, he will warn of, quote, the darkest winter in modern history if the administration does not ramp up its response to the.

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