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COVID-19 Disrupts Traditional Election Expectations; Louis DeJoy Suspends Postal Service Changes; Insurance Companies Deny Restaurants' Claims. Aired 10:30-11a ET

Aired August 19, 2020 - 10:30   ET

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

[10:30:00]

ROSA FLORES, CNN CORRESPONDENT: Her and her colleagues voted based on advice from medical experts not to reopen for in-person instruction in Hillsborough County because the positivity rate, she said, was too high in the county.

However, shortly thereafter, the county received a letter from the state of Florida, saying that it was rejecting their plan for reopening of schools because it did not offer an in-person instruction option. And this particular witness said that this put her and her colleagues between a rock and a hard place. Take a listen.

(BEGIN VIDEO CLIP)

TAMARA SHAMBURGER, HILLSBOROUGH COUNTY SCHOOL BOARD MEMBER: I felt like as a board member, I was stuck between a rock and a hard place, being forced to choose between the life of a student and funding from the state.

(END VIDEO CLIP)

FLORES: Now, this school board member also said that she has received thousands of e-mails from parents and families that are concerned about the fact that Hillsborough County then reversed their decision and decided to reopen schools for in-person instruction.

Now, right before coming on-camera, Jim and Poppy, the governors' attorneys were beginning to question the witness. So we will of course continue to monitor to see what happens -- Jim and Poppy.

POPPY HARLOW, CNN ANCHOR: Rosa, thank you for that reporting.

Now to a new poll our from CNN this morning, one that finds a majority of Americans disapprove of the president's handling of this pandemic. It is up 10 percentage points in terms of disapproval since the start of the pandemic in mid-March.

JIM SCIUTTO, CNN ANCHOR, NEWSROOM: The same poll also finds that nearly seven in 10 Americans are more embarrassed than proud of the country's response to the outbreak.

Joining us now, former director of the Nixon Presidential Library and CNN presidential historian Tim Naftali. Tim, you know, everything is -- I mean, the weather's politicized in this country today, right? With, you know, deep divisions into how people see them.

But I wondered, just give us some historical scope here. Have you seen a national crisis like this with such a disparate view from party to party? Because if you look at that seven and 10 but you break it down, Democrats and Republicans, 93 percent of Democrats are embarrassed, only a third of Republicans.

TIM NAFTALI, CNN PRESIDENTIAL HISTORIAN: This is a horrible, horrible fact on top of a series of horrible facts connected to the COVID-19 crisis.

Normally -- historically -- when this country is hit by a national crisis, we actually come together. Americans often -- Americans traditionally react to a great surprise that has hit their president by rallying around the president. We Americans give our president a chance.

After Pearl Harbor, Americans did not start pointing fingers at Franklin Roosevelt. After 9/11, even those that felt bitterly disappointed by the fact that Al Gore was not president of the United States, they rallied around George W. Bush, gave him a chance to react to al-Qaeda.

In this instance, the president took a while to figure out that he was facing a national disaster. And then in March, he calls himself a wartime president. We've forgotten that by now, but Donald Trump said he was a wartime president and then gave the impression that he would mobilize national resources and mobilize the American stamina to deal with COVID.

And then in April, he gives up. In April, he says there's a light at the end of the tunnel, just at the same time that we in the northeast were just about to hit the peak of deaths per day -- in New York City, for example. He says he saw the light at the end of the tunnel.

And then a week later, he says -- he sends out those tweets, liberate Virginia, liberate Minnesota, liberate Michigan. And at that point, the president and the public health officials are on two different wavelengths. And Americans had to make a decision. Those that admired the president, who were committed to the president were hearing something completely different from him --

SCIUTTO: Yes.

NAFTALI: -- from what they were hearing from public health officials. That's the moment where this crisis became politicized, and it remains so to this day.

HARLOW: What has history taught us -- because that's your wheelhouse -- about what happens in elections after national crises, right? Because we often see -- after 9/11, this rallying around the administration.

NAFTALI: Well, "A house divided against itself cannot stand," is what Abraham Lincoln told us. We have never had an election in a pandemic. The last pandemic took place -- we've never had a presidential election. The last pandemic --

HARLOW: Yes.

NAFTALI: -- over by the time of the 1920 election.

What we are facing right now are two different issues. One, a question of voters being able to vote. And the pandemic introduces, as we've all discussed, a series of complications. Two, the issue of exciting people without retail politics, without presidents going to their hometowns or at least to their capitals.

[10:35:19]

HARLOW: Right.

NAFTALI: Those are two different unknowns. I would say this, it is unusual for all Americans to be touched by a single policy. The reason why COVID-19 is so important to this election -- besides its moral and health consequences -- is that every American is touched by it, every American is worried about it -- or most Americans are. Every American -- or most Americans have children and have to worry about whether they go to school or not.

So both presidential candidates are dealing -- when they talk about COVID-19 -- with an issue that affects each and every one of us emotionally and physically.

SCIUTTO: Yes.

NAFTALI: That reason, it will overshadow, I think, every other issue in this campaign.

SCIUTTO: Yes, and that's why those numbers could be telling for the president given the strong disapproval of his handling -- especially among independents. Tim Naftali, thanks very much.

NAFTALI: Thank you.

SCIUTTO: Some Postal Service union leaders worry that changes made by the postmaster general cannot be reversed before the November election. We're going to talk more.

(COMMERCIAL BREAK)

[10:41:00]

HARLOW: Welcome back. So the postmaster general, Louis DeJoy, is suspending a number of the highly criticized changes that he made recently to the Postal Service, at least until after the election.

SCIUTTO: That includes removing mail processing equipment, which some U.S. Postal Service union leaders say might not be restored before November, that's a question, how much can be reversed now. CNN's Sunlen Serfaty joins us live from Capitol Hill. Sunlen, the

president tweeted this: "If you can protest in person, you can vote in person." Of course, the president makes exceptions for mail-in voting for states run by Republican governors and himself, by the way. But tell us what Republican lawmakers are saying about voting by mail, which the president has taken particular aim at.

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Jim. And as you noted, worth repeating again that President Trump and Melania Trump, of course also voted just this week, absentee ballot in the Florida congressional primary.

But as far as these changes, announced yesterday by the postmaster general, it has done very little to stop the concerns among congressional Democrats. They say that halting the changes before the election isn't good enough, that they are really isolating in on those changes that were already made, already affecting the mail service and wondering if those can be -- and really demanding that those be reversed as well.

And we certainly head that echoed recently by postal union leaders, saying, look, things like sorting machines that had been removed, they have little hope that those will be restored before Election Day when it is, of course, very important. Now, Speaker Pelosi, she is pressing ahead with holding a very rare Saturday session here on Capitol Hill, where they'll be voting on the House-side Democrats' bill to address some of these concerns.

Of course, big moment up here on the Hill, Friday. The postmaster general will be testifying -- a virtual hearing in front of the Senate committee. And on Monday, in front of the House Oversight Committee where of course many of these concerns, he will be grilled on by Democrats -- Jim, Poppy.

HARLOW: Sunlen, thank you. We'll watch that on Friday and on Monday, we appreciate it.

[10:43:03]

Well, business owners across the country have paid thousands -- right? -- for expensive insurance protections for their policies just in case they ever had to close their doors. Now, many of them feel like that money went down the drain and they're not getting a cent in this pandemic.

(COMMERCIAL BREAK)

HARLOW: Well, so many business owners are struggling in this pandemic, right? Especially restaurants --

SCIUTTO: Yes.

HARLOW: -- and many thought they had insurance safeguards in place. Now, hundreds of them are taking legal action after finding out their business interruption policies are essentially worthless. SCIUTTO: Yes. I mean, imagine your frustration. CNN business and

politics correspondent Cristina Alesci joins us now. Cristina, so -- I mean, they have this insurance, thought it covered it. What's at dispute here?

CRISTINA ALESCI, CNN POLITICS AND BUSINESS CORRESPONDENT: Well, the insurance companies are denying these claims, essentially arguing that the coronavirus does not cause physical damage. This is a technicality, some business owners are arguing. And now, they're taking that argument to court.

Business owners have filed about a thousand lawsuits. In reporting this story, I'm hearing there are thousands others that are scheduled to come online. But unfortunately, this is going to take quite some time to play out in the court system and those decisions will not come fast enough for some business owners.

(BEGIN VIDEOTAPE)

ALESCI (voice-over): Delores Tronco-DePierro was living her dream, running a successful restaurant in New York City's famed West Village. Drawing from life savings, investors and a small business loan, Tronco-DePierro poured nearly a million dollars into the space.

Business was booming when she opened in December 2019. Then, COVID-19 hit New York City.

DELORES TRONCO-DEPIERRO, OWNER, THE BANTY ROOSTER: Coronavirus would hit 96 days later, and it would be the beginning of the end of what was that lifelong dream.

ALESCI (voice-over): The first place she turned to for help was her insurance company. She had hoped for a payout from what's called a business interruption policy.

TRONCO-DEPIERRO: I filed the claim March 17th. I got a phone call on the 20th letting me know that our claim had been denied.

ALESCI: That fast?

TRONCO-DEPIERRO: Yes. None of us hoped to get rich or have an insurance windfall. I think we just hoped that maybe our insurance companies would at the very least credit us back our premiums for the year.

ALESCI (voice-over): The parent company for Tronco-DePierro's insurer, AXA, told CNN it doesn't comment on specific client claims. Tronco-DePierro received funding from the Payroll Protection Program, but it's not enough. She can only seat a fraction of guests at outdoor tables while her monthly rent of $23,000 remains.

[10:50:10]

ALESCI: So when you finally leave and you turn off the lights and you shut the door, how are you preparing yourself for that?

TRONCO-DEPIERRO: I don't -- I don't think I can prepare myself for it.

ALESCI (voice-over): After the 2003 SARS outbreak, the insurance industry changed most policies, excluding losses tied to viruses. In many cases, a policyholder must stipulate physical damage like fire or flood to collect.

SEAN KEVELIGHAN, CEO, INSURANCE INFORMATION INSTITUTE: A virus does not trigger the direct physical damage that's necessary to enact a business insurance or business interruption policy. And we've actually seen that play out already in court.

ALESCI (voice-over): About a thousand lawsuits have been filed in more than 40 states, according to the University of Pennsylvania. Attorney John Houghtaling represents restaurant owners suing insurance companies to force payouts. Many of his clients do not have virus exclusions in their policies. But he argues the virus itself constitutes physical damage.

JOHN HOUGHTALING, ATTORNEY: Who believes that COVID-19 is not dangerous physically? They're ignoring the words of their policies and a lot of businesses are suffering as a result of this.

ALESCI (voice-over): The scale of the problem is massive. One insurance trade group estimates the nation's business losses related to COVID at its height could total nearly $1 trillion a month. The insurance industry stance? Businesses need help, but only the government can afford these astronomical sums and payouts could cripple the industry.

KEVELIGHAN: We would see systemic strain on the industry within a matter of months. It would cost anywhere from $150 to $400 billion a month.

ALESCI (voice-over): Congress could create a government backstop to help, but any future legislation is unlikely to help Delores Tronco- DePierro, who's permanently shuttering her New York City restaurant.

TRONCO-DEPIERRO: I take it as it comes, one day at a time. And the only way is to look to the future, and to find the things I can be thankful for. And to remember that, if only for 96 days, I did it.

(END VIDEOTAPE)

ALESCI: So a heartbreaking outcome for Tronco-DePierro for sure, but a small glimmer of hope for others who are fighting insurance companies. Although there have been only a handful of cases and two or three of them have already been decided in favor of the insurers, one judge in Missouri has allowed a group of hair salons and restaurant owners to go ahead and sue their insurance companies for direct physical loss -- Poppy, Jim.

SCIUTTO: We'll see how the rest of those cases go. I mean, certainly a lot of money and businesses at stake. Cristina Alesci, thanks very much.

Well, one third of the businesses in the New York area could shutter, close down in just months. That, if lawmakers don't act fast with new aid. A new survey shows that businesses will go broke without government support if the current revenue levels remain flat.

HARLOW: CNN business lead writer Matt Egan joins us now. I mean, Matt, your reporting on this, that the New York Fed is the one that issued this warning. And we're talking about a matter of months here.

MATT EGAN, CNN BUSINESS LEAD WRITER: That's right. It wouldn't take long at all for this to happen. This really alarming Fed survey found that New York-area manufacturers would go bust in just six months, service sector companies -- which include everything from law firms to entertainment to finance, they would go under in just eight months.

Now, this survey really focused on New York State, northern New Jersey and southwestern Connecticut, a key part of the U.S. economy and one that was hit very, very hard by the pandemic. And it suggests that there is real risk of lasting economic damage here.

I'm coming from northern New Jersey right now and I can tell you, things are definitely not back to normal. Restaurants are open but it's just for outdoor seating. Stores, they're not really very crowded. Offices, especially in Manhattan, are largely empty. And so the real risk here is that Congress doesn't do enough to provide the real help that companies really need right now.

HARLOW: We know about that. I mean, Ben Bernanke, a Republican, has been warning about this, saying, don't make the mistake we made in the Great Recession. Do more rather than less.

And the White House keeps promising, really, a V-shaped recovery. But your new reporting is that Wall Street investors, most of them don't think that's going to happen.

EGAN: That's right. You look at what's happened on Wall Street, the S&P 500 hit its first record high just yesterday since February. And yet some of the most sophisticated investors are concerned right now. Just 17 percent of fund managers who were surveyed by Bank of America expect that rapid V-shaped recovery.

[10:55:06]

Thirty-one percent see a more gradual U-shaped recovery, and -- this is really what is alarming -- is that 37 percent think that there's a risk of a double-dip recession -- Poppy.

HARLOW: Scary. Matt, thank you so much.

And thanks to all of you for joining us. I'm Poppy Harlow.

SCIUTTO: I'm Jim Sciutto. We'll be back after a short break.

(COMMERCIAL BREAK)

[11:00:00]