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Trump Says He's Taking Hydroxychloroquine, FDA Warns Against It; Some Colleges Announce Overhauls To Schedules And In-Person Classes To Battle Coronavirus; Treasury Secretary, Fed Chairman Testify On Relief Efforts. Aired 10-10:30a ET

Aired May 19, 2020 - 10:00   ET

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

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Picking up dry cleaning.

[10:00:00]

Pompeo says that he did not know about that. And so that was not -- that Linick's firing was not retribution for that because he simply didn't know about it.

But now, Engel and his counterpart in the Senate, Senator Bob Menendez on the Senate Foreign Relations Committee, they have launched an investigation to determine whether or not the firing of Linick was legal.

POPPY HARLOW, CNN NEWSROOM: Keep your eyes on this space, right? Thanks very much, Alex.

JIM SCIUTTO, CNN NEWSROOM: A very good Tuesday morning to you. I'm Jim Sciutto.

HARLOW: And I'm Poppy Harlow.

Unproven but undeterred, the president says he is taking the drug hydroxychloroquine despite warnings from the FDA that it could have lethal side effects. White House Press Secretary Kayleigh McEnany moments ago defended the president saying this.

(BEGIN VIDEO CLIP)

KAYLEIGH MCENANY, WHITE HOUSE PRESS SECRETARY: Well, the president said himself he's taking it. That's a given fact he said. The purpose of this letter was to show that Dr. Conley agreed with the analysis that the benefits outweighed the risks. The president should be taken at his word.

(END VIDEO CLIP)

HARLOW: Okay. So why promote it and why not wear a mask, a proven way to prevent catching this virus.

SCIUTTO: By the way, the FDA has warned against using it because not only is it unproven to help, there are also signs that it can hurt some patients who take it.

Those questions as the president launches a new threat against the World Health Organization. He says the U.S. may pull funding if the WHO does not meet certain demands within 30 days. And moments from now, expect a fiery Senate hearing on the economic toll in this country from the pandemic. Fed Chair Jerome Powell, Treasury Secretary Steve Mnuchin will be grilled, really, it looks like, by both parties on the stimulus, how it's rolled out, who it has helped, who it has not helped. We will cover all the angles.

Let's start though with John Harwood at the White House here. And as we've often seen, the president makes an unproven claim or even one that fights the science here, and the message machinery there backs him up.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: That's right, and he's his own personal message machinery with respect to hydroxychloroquine. As you guys said in the setup, the one thing we know that is highly effective in stopping the spread of the disease is wearing masks. It's easy to do. The president declines to do that. It's something that has become something of a symbol among conservatives about oppression and resistance to opening up.

On the other hand, the president is trying to justify his past cheerleading for hydroxychloroquine even though his own FDA has said there are dangerous side effects and that outside of clinical trials, which are underway both for studying the drug as a potential therapeutic and as a potential prophylactic, outside of those settings people shouldn't take it. But the president is saying he's taking it, justifying what he's done, modeling behavior for others.

Now, I do think action on the Hill today may end up being more significant because you've got Jerome Powell, who has said very aggressively that Congress and the White House should not stop providing fiscal relief to try to get us over the economic pain of this pandemic, which is going to see a huge drop in economic output in the second quarter, see a huge rise in unemployment. That's going to generate questions for Steve Mnuchin because the administration has been resisting more fiscal aid in the last couple of weeks after passing that last bill.

And the president of the United States himself is going up to the Senate Republican lunch, and I think that is also going to be significant as the Republicans try to figure out exactly how they play a response to Nancy Pelosi and her $3 trillion bill. Potential deal, because the president wants a cut in the payroll tax cut, the Democrats want aid to state and local governments. You could see them working out something along those lines, but today is a significant step in that direction.

HARLOW: John Harwood at the White House, thank you very much. A big day ahead, for sure.

Let's get to our Chief Medical Correspondent, Dr. Sanjay Gupta. Also joining us, Dr. Amy Compton-Phillips, Chief Officer for Providence Health System. Good morning to both of you. Sanjay, I mean, I think your jaw dropped, as did everyone, when we heard the president say that he was taking hydroxychloroquine. Explain the risk to any American watching who might think that's a good idea if it's not prescribed by their physician.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: The public health organizations within our federal government have been very clear on this, that there is no evidence that it works either as a treatment or as a preventative. I mean, this is really important. You know, this has been something that has been looked at a lot. Obviously, people have heard about this medication quite a bit since the president first started talking about it in March.

[10:05:03]

On the treatment side, there have been several studies now that have looked at does it actually help people who are dealing with COVID right now, moderate disease, severe disease and even mild disease to some extent. And the answer has been no. It really does not seem to help and it can hurt, causing these cardiac arrhythmia, disturbance in the heart rhythm.

There're ongoing studies about the use as a prophylaxis, meaning a preventative, and those studies are still ongoing. But as of yet, there is still no evidence of this. So the situation you're left in is someone who is at risk because of his age, because of his preexisting conditions, who is now taking a medication that has no evidence that it works and could potentially harm. That's a problem.

The president maybe has much better access to healthcare to mitigate some of the problems that could arise as a result of this medication, but a lot of people are going to go out there and start taking this and, you know, potentially harm themselves. And that's the real concern here.

SCIUTTO: All right, let's set it aside because the doctors are clear on this, the guidance from the FDA, and as you say, Dr. Gupta, from inside this federal government is not proven.

So, Dr. Compton-Phillips, big thing that's happening right now, really, virtually, all states are now opening up to some degree. As you watch that, what are you seeing? It's been notable that some of the states that have been more aggressive and early in reopening, Georgia, for instance, that you have not seen, at least yet, a big jump un cases there. Why do you think that is?

DR. AMY COMPTON-PHILLIPS, CNN MEDICAL ANALYST: Well, you know, we absolutely know that it takes a while between the time you get exposed to a virus and the time that you start seeing people needing hospitalizations or dying from the virus.

And so the big concern is, are we in this lull before the storm. And I hope not. I absolutely hope not. It does make me concerned though. Lots of the pictures that you see coming out from people at malls and the beautiful weather, avoiding doing things like wearing masks or social distancing. And so I do worry that if we end up with a super spreader event, if we end up with somebody who's got the germ and doesn't know it and coughs on people or goes out to dinner at all those crowded restaurants, that we could actually see big spread. But there is this time lag, and that is what we have to worry about, that it's not an instantaneous thing you open and then you see the spread. And so time is going to bear out whether or not it happens.

SCIUTTO: Yes, we had a story on, Poppy, earlier, that one birthday party in Pasadena, California, one person spreads it to half a dozen others and beyond.

HARLOW: 100 percent.

Sanjay, you said something a moment ago I just want to drill down on, and that is that a lot of people are going to go out and take hydroxychloroquine now. I just got an email in the last hour from a father who is apoplectic about this, because his daughter with lupus has already started to see a shortage of hydroxychloroquine, which is a condition that you are prescribed to take it for. Is that now going to be a big concern now, not enough for people who need it?

GUPTA: I think it very well could be. I mean, it was back in March when this happened before. I mean, there were pharmacies we were talking to that their demand for hydroxychloroquine went up 30-fold all of a sudden after the discussions started hitting the national stage like that. So, yes, that's a real concern. I mean, they're trying to produce more of this drug, I think, because of these projected shortages, but there are people who are taking this for legitimate reasons who may have to go without for a period of time.

So these are the consequences of these sorts of things. There are consequences on people's health directly and then there's these ripple effects that we're seeing that are very significant.

HARLOW: And it does just seem, I would say, that the White House is trying to twist that argument that millions already prescribed this drug, right, Jim, to say that the president should take -- exactly.

SCIUTTO: I mean, it's just -- it's incredible. It's deliberately misleading.

Dr. Compton-Phillips, when you have the president with his bully pulpit there take the unproven treatment and refuse to do the proven thing, which is wear a mask, which does help or -- it's not full-proof but it does help produce transmission, particularly for people who are infected themselves. What is the public health damage from that?

COMPTON-PHILLIPS: It's huge. Fundamentally, it's basically an attack on science, right, that science shows, exactly like Sanjay just said, that there is no proven evidence that hydroxychloroquine works. There is evidence that stopping droplet transmission by wearing a mask works, right? So these are the things that the science says, this is how we get on top of this epidemic. And that is what we need to actually be promoting, this socially responsible behavior that it's not a political statement to wear a mask, it's saying that you care about your neighbor and you want to stop this transmission.

And so how do we shift away from the conversation about the craziness and the anti-science rhetoric and instead say, how do we actually be socially responsible citizens and keep us from transmitting the virus to our friends and neighbors?

[10:10:03]

And I really hope that's what we can start doing rather than focusing on the nonsense statement of the moment.

SCIUTTO: I'm with you, doctors, let's hope. All we can say to folks at home is listen to your doctors, listen to the experts, listen to science.

HARLOW: Thank you both.

Well, the U.S. is edging closer to another milestone. Even as the coronavirus death toll surpasses 90,000 in the United States, every state will be at least partially reopened by this weekend. Keep in mind, only 16 states have seen a downward trend of cases over the past week.

SCIUTTO: Ed Lavandera in Dallas. Ed, several states, they're easing restrictions ahead of Memorial Day. Of course, a lot of folks, we understand, well, we want to go out, they want to celebrate on Memorial Day, they want to be outside, they want to go to restaurants. What do we know and how are officials handling this in communities?

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: Hey, Jim. Well, it's difficult to track but every state doing things differently at a different pace. We're going to give you a breakdown of some of the things that we're seeing across the country.

In New York, New Jersey, Delaware, Connecticut, beaches will be open. Here in Texas, you have childcare centers, bowling alleys, rodeos, bingo centers and bars that are reopening. The state guidelines even go so far as to say that dancing is discouraged in the bars. I'm not making that up. In Arkansas, pools, water parks and swim beaches are also being opened up. In Tennessee, large attractions, like race tracks, water parks, amusement parks, theaters and auditoriums are opening up.

So you really get a sense across the country that no matter what the medical data is showing at this point that there is this push to reopen the economy and get things moving once again across the country.

And just earlier this morning, the governor of Connecticut spoke with CNN and really talked about how much of this opening and reopening of the economy will depend on how confident people feel in their homes and in their communities.

(BEGIN VIDEO CLIP)

GOV. NED LAMONT (D-CT): We're one of the first states to allow outdoor dining here in New England.

You want to get the customers comfortable. You want them to maybe -- maybe they're hesitant. They don't want to go back to a restaurant at all, but maybe they'll go back if it's outside only, waiters wearing a mask, waiters wearing gloves. And maybe a month from now, then they'll feel more comfortable about going inside.

(END VIDEO CLIP)

LAVANDERA: So, Jim and Poppy, as you mentioned, all 50 states here by Memorial Day going into this summer have begun the process of reopening here. Jim and Poppy?

HARLOW: Okay. Ed, thanks very much, live for us in Dallas this morning.

SCIUTTO: Still coming this hour, we're going to go inside the room as the treasury secretary and Federal Reserve chairman face questions, really tough ones from both parties over how the stimulus packages, all that aid, all those trillions, has been handed out and who's not getting it.

HARLOW: Plus, this morning, harsh words from China, as the foreign minister there says the U.S. is just trying to shift blame to cover its own, quote, incompetent response to the coronavirus, obviously upset with a letter that the president wrote to the World Health Organization.

SCIUTTO: The first college is already facing mounting pressure to determine how they will handle the fall semester. How will they open? Will they open? Will students return? We'll take a look.

(COMMERCIAL BREAK)

[10:15:00]

HARLOW: All right, welcome back. Some colleges and universities are showing their plans to bring students back to campus this fall. One common theme we're seeing is shorter semesters. This week, at least five universities announced that they will skip the fall break. Rice, Purdue and the University of South Carolina say they will end face-to- face teaching before Thanksgiving. The university of Notre Dame and Creighton University all plan at the end of fall semester before Thanksgiving completely.

Let's bring in our Senior Global Affairs Analyst, Bianna Golodryga. What is behind the decision-making here and how is this going to play out?

BIANNA GOLODRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: Well, Poppy and Jim, I think the thinking that the schools are trying to focus on right now is to give these students any semblance of normalcy while keeping them safe. And that means bringing them back to campus. Obviously, this is going to be a piecemeal situation. You've seen what happened in the Cal State System, where they have announced they are going to be returning in the fall for online classes. These schools that we've now just named are saying that they are planning to return in the fall, in-session classes, person-to-person, but they're going to start earlier.

So you heard from Notre Dame saying that they're going to be starting two weeks earlier in August. Rice University happens to start in August, anyway, so they're not going to be delaying their start time. What they will be doing is ending a bit sooner, around Thanksgiving.

The president of the university offered this this morning as to why.

(BEGIN VIDEO CLIP)

DAVID LEEBRON, PRESIDENT, RICE UNIVERSITY: The best information is that these viruses tend to turn around in the winter, possibly late November, December, maybe January. And so we wanted to be prepared for that.

I think as we thought about it, the important thing was really to be very flexible, very agile and very adaptable.

(END VIDEO CLIP)

GOLODRYGA: And so the thinking is keeping the students on campus together sort of isolated, while also testing them rigorously, tracing -- contact tracing, providing any sort of isolation and hospital needs if, in fact, that is warranted but keeping the students together. We've always been concerned about a possible second wave, what that may look like.

And as you know, as we've all known, having gone to college, once you're there, you also have a few days off before the Thanksgiving break. They've canceled that for these particular schools, Rice, University of Notre Dame, Purdue, South Carolina and Creighton, and they're also ending now in-person classes after -- right as we go up to Thanksgiving.

[10:20:08]

So there will be no more in-person classes. After Thanksgiving, some of these students and colleges will be offering online final exams.

SCIUTTO: Interesting balancing act there. Let's hope they find a way. I know a lot of parents and kids are counting on this. Bianna Golodryga, thanks very much.

GOLODRYGA: Of course.

SCIUTTO: Happening now, two of the country's top economic officials, they are testifying. That's Jerome Powell there, chairman of the Fed, delivering his opening statement. After the statements are done, they're going to face some tough questions from both parties about the administration's economic response to the pandemic. We're going to bring that to you live.

(COMMERCIAL BREAK) HARLOW: All right. Let's get into this testimony of the first question being asked by the chairman of the Senate Banking Committee, Senator Mike Crapo from -- there's Fed chair Jerome Powell speaking.

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: And there are 50,000 entities capable of borrowing, so we need to draw some lines to be able to handle this.

But in the first instance, we've said that we will always be willing to lend to a state and allow to -- with the purpose of down streaming to counties, cities, other subdivisions of governmental authority within that state. So that's one thing. We also lowered the size of the city.

And I would tell you, we're continuing to look at ways to accommodate further borrowers, including perhaps in the case of states with relatively low populations where the only borrower with access may be the state government itself, we're looking at ways to make sure in those states that we address the needs of potentially another borrower or two, and that's something we'll be working on going forward.

SEN. MIKE CRAPO (R-ID): Yes, thank you very much. And, Secretary Mnuchin, to you, with regard to the 13(3) facilities, the CARES Act appropriates, if I recall correctly, $500 billion to be utilized through the exchange stabilization fund to help facilitate the implementation of these section 13(3) facilities by the Federal Reserve. Most of that has not played out, correct? Am I correct?

STEVEN MNUCHIN, TREASURY SECRETARY: So there's -- of the 500 billion, approximately 50 billion was in direct lending programs from the treasury and 450 billion was available for the 13(3) facilities. I've allocated about half of that. And let me be clear, I am prepared to allocate the rest of that.

The only reason I have not allocated it fully is we are just starting to get these facilities up and running. We want to have a better idea as to which one of the facilities needs more capital as well as the potential for adding additional facilities. So I expect to allocate all the capital as needed as was given to us.

CRAPO: And so that the listening public can be clear about this, the way these facilities work is once the money is allocated, as you've just indicated to a particular facility and the Fed implements that facility, then that money can actually be leveraged into much greater amounts of liquidity for whatever market or situation that is addressed, correct?

[10:25:08]

Is that correct?

MNUCHIN: That is correct. Depending upon the credit risk, it depends on the leverage. We've allocated, with the existing capital up to about 2.3 trillion in existing facilities.

And, Mr. Chairman, let me just make a comment because I know there's been a lot of questions as to whether the treasury is willing to take risk with that. I would say the answer is, absolutely, yes. The way these facilities work is in the facilities that don't have any credit risks, such as the PPP. I approve those without capital allocated by definition. Any facility that the Fed believes it puts them at risk. I do put up capital. So, by definition, that capital is at risk and we are fully prepared to take losses in certain scenarios on that capital.

CRAPO: Well, thank you. And I have just about 50 seconds left, and I want to stay with the time. But there have been some allegations that just big companies are being benefited by these facilities. Could you quickly address that, Secretary Mnuchin?

MNUCHIN: Let me just comment. The announcement of the corporate bond facility, without putting up $1 of taxpayer money, unlocked the entire primary and secondary market for corporate bonds. So companies such as Boeing, that I had expected would need to borrow from us on a direct basis, were able to borrow $25 billion in the primary markets. So I would say, in the best case scenario, the markets open up and we don't need to use these facilities.

In the case of main street facility and the municipal facility, which we expect both to be up and running by the end of the month, we expect these to have a big impact on both these markets.

CRAPO: Thank you very much. Senator Brown.

SEN. SHERROD BROWN (D-OH): The corporates who have kept our country running during this public health emergency, the essential workers that we all pay service, at least to, are often the lowest paid workers in our economy. They're usually women, they're disproportionately black and brown workers, too often they don't have a union, they're low wage workers who do the laundry at hospitals, who prepare our food, they put their lives on the line to keep our country running. They're still worried about paying the bills, staying afloat and staying healthy.

Mr. Secretary, do you think that's fair?

MNUCHIN: Mr. Senator, I apologize due to the technical issues. I didn't hear the beginning of your question. So I heard, do you think that's fair, but I didn't hear the question.

BROWN: The people who are the -- we call the essential workers and we call out and thank, those essential workers are often the lowest paid workers. They do the laundry, they're the custodians, the security people. They prepare our food, they put their lives on the line for very low wages, and they're still worried about paying the bills. Is that fair?

MNUCHIN: Well, Mr. Senator, I just want to thank all the essential workers, whether it be the healthcare people, the --

BROWN: Yes, the thanking is great, but these are people -- is it fair that our economy pays the essential workers so little in such work conditions? MNUCHIN: Mr. Senator, some of those people are paid less than others. Again --

BROWN: Well, my question is, is that fair?

MNUCHIN: Again, Mr. Senator, I don't know what specific workers you're referring to.

BROWN: I can lay them all out. I'll try the chairman of the Federal Reserve. Chairman, is it fair that those workers who are exposing themselves to this virus that are making low wages, we call them essential by all of our definitions. Is that fair?

POWELL: Those are workers who were in basically in the service sector. What's unusual about this is it's all about the service sector, particularly those parts of the service sector where there are lots and lots of in-person contact. And those tend to be lower paid workers and they're definitely the most respected.

And I would just say all of our efforts are to do what we can to help those people and create conditions so that they'll have the best possible chance to get back to work.

BROWN: Well, some of the best things you both could do is to support pandemic pay for these workers and support another recovery act that included more dollars for these low-paid workers who we continue to celebrate as essential.

Mr. Secretary, we passed the CARES Act to help millions of workers who make our country work. You've set up CARES Act programs to lend trillions of dollars to companies. Am I right that you're not requiring companies to use the money they borrow to keep their workers on the payroll?

MNUCHIN: Mr. Senator, I am following what was the exact letter and spirit of the law that we negotiated with you and others on a bipartisan basis. In some of these facilities, there are specific requirements, and I assure you that the chair and I are absolutely enforcing those requirements as required in both the literal and spirit of the negotiations.

[10:30:09]

END