Full transcript of "Face the Nation" on May 3, 2020
On this "Face the Nation" broadcast moderated by Margaret Brennan:
- Gov. JB Pritzker D, Illinois
- Daniel O'Day, Chairman and CEO, Gilead Sciences
- Gary Kelly, Chairman and CEO, Southwest Airlines
- Raphael Bostic, President and CEO, Federal Reserve Bank of Atlanta
- Dr. Scott Gottlieb, Former FDA Commissioner
Click here to browse full transcripts of "Face the Nation."
MARGARET BRENNAN: I'm Margaret Brennan in Washington. And this week on FACE THE NATION, moving on to May is proving to be even more challenging as the emotional dilemma between personal and economic well-being intensifies.
With restrictions on Americans and businesses across the country easing by the day, the Trump administration says there are positive signs in the battle against the coronavirus.
PRESIDENT DONALD TRUMP: The testing and the masks and all of the things, we've solved every problem. We solved it quickly.
JARED KUSHNER: We're on the other side of the medical aspect of this, and I think that we've achieved all the different milestones that are needed.
MARGARET BRENNAN: And there are some bright spots with treating the virus. The FDA gave emergency authorization for the drug remdesivir to be used intravenously for hospitalized patients after trials showed a quicker recovery. And the administration launched Operation Warp Speed, in a rush to find and manufacture a vaccine for COVID-19. But are we flattening the curve? Some experts say that with the books closed on April, we haven't seen the expected results from the stay-at-home orders, at one point in place for ninety percent of the country. With new predictions of the virus lasting for some time, perhaps as long as two years, are we moving too fast too soon? We'll talk to the governor of Illinois, J. B. Pritzker. Daniel O'Day, the head of the drug company manufacturing remdesivir, Gilead Sciences, will join us. Plus, former FDA Commissioner Doctor Scott Gottlieb. Then we'll look at the grim and growing financial fallout as the number of jobless Americans jumps to more than thirty million. We'll talk with the president of the Federal Reserve Bank of Atlanta Raphael Bostic, and the CEO of Southwest Airlines Gary Kelly. Finally, with six months to go until Election Day, a look at campaign 2020.
All that and more, is just ahead on FACE THE NATION.
Welcome to FACE THE NATION. As we turn the page to a new month Americans continue to struggle emotionally, financially, and with just trying to plan ahead. In most cases there are few clear answers to our many questions. We will continue to seek them for you. Our coverage begins today with CBS News national correspondent Mark Strassmann in Atlanta.
(Begin VT)
MARK STRASSMANN (CBS News National Correspondent): In America's COVID siege, exasperation can morph into rage. Weekend protesters were furious. They argued, our oxygen-starved economy needs a ventilator, reopen for business. With thirty million jobs lost, millions of people are running low on something--food, toilet paper, patience, and especially money. You'll probably notice more stores reopening this week. Thirty-eight states have already eased restrictions, six more will follow suit tomorrow and Tuesday, all emphasizing social distancing.
GOVERNOR PHIL MURPHY (D-New Jersey): If we hear minimal reports of knucklehead behavior at our parks and we see the-- the metrics we need to meet, then we know that you all have taken to heart your responsibility.
MARK STRASSMANN: Another concern: Food shortages. Across the country, widespread COVID infections have closed twenty-two meat and poultry-processing plants. The virus has killed at least twenty workers and at least two hundred seventy-nine have been infected in Maryland.
GOVERNOR LARRY HOGAN (R-Maryland): Any disruption or interruption to processing at our poultry-processing plants could lead to significant national supply chain issues.
MARK STRASSMANN: Most health experts worry about a shortage of COVID testing. As April ended, the U.S. had conducted 6.2 million COVID tests. But a Harvard study concluded the country needs five million tests a day by early June to reopen safely. And Maryland and Colorado plan to hide their PPE from the federal government.
GOVERNOR JARED POLIS (D-Colorado): A global free-for-all. We're just worried about them cutting them off at the manufacturer during the supply chain or during customs.
MARK STRASSMANN: But there's no hiding a looming financial crisis for dozens of states. Record job losses have drained their unemployment trust funds. Massachusetts, New York, Ohio, and West Virginia all have enough to pay one more week's worth of benefits. Four other states have two weeks. And more than forty percent of Americans live in states with less than six weeks.
(End VT)
MARK STRASSMANN: Several dozen malls around the country will reopen tomorrow. Here in Atlanta, Phipps Plaza behind me, is one of them. Georgia has led the charge nationally to reopen, but on Friday new COVID infections jumped again. The state reported a thousand new cases in twenty-four hours. Margaret.
MARGARET BRENNAN: Mark Strassmann, thanks.
China claims that the coronavirus outbreak began in an animal market in Wuhan. The U.S. intelligence community is investigating that theory and the possibility that it was accidentally released from a lab. Either way, U.S.-China relations are at a new low. CBS News senior foreign correspondent Elizabeth Palmer reports on COVID-19 hot spots around the world.
ELIZABETH PALMER (CBS News Senior Foreign Correspondent/@elizapalmer): Margaret, China was the very first country to enforce radical isolation and widespread testing--an approach we now know to be the most effective way to control a COVID outbreak.
(Begin VT)
ELIZABETH PALMER: And it's paid off. Almost fifteen weeks since Wuhan went into lockdown, if not for the masks, life this May Day weekend looks pretty normal. Even retail shops are open. South Korea acted fast, too, and now says it has the outbreak under control. There is still social distancing, here at an exam for job applicants. But with just a handful of new cases every day, Koreans are at last relaxing. At the other extreme, there is Brazil. These are fresh graves in Sao Paulo. The country is South America's COVID epicenter. With a rampant outbreak, limited testing, and a president, who when confronted with the numbers said, so, what do you want me to do? In Europe, rules are easing, but at different speeds. Spaniards gratefully took to the streets after forty-eight days indoors, but only to exercise. Adults in the morning; kids in the afternoon. Austria has opened up more widely. Shops and crucially even hair salons are up and running. Poland is due to reopen its borders today, but care homes are still strictly locked down, though this one in Warsaw went the extra mile to arrange safe visits. Europeans can now see the light at the end of the COVID tunnel. Even in lockdown, they are finding ways to party. This is a drive-in disco in Germany. And here is the Finnish folk group, (INDISTINCT), celebrating International Dance Day in isolation.
(End VT)
ELIZABETH PALMER: Here in the U.K., Prime Minister Boris Johnson's fiancée had a new baby last week. But he is not taking any paternity leave. Instead, he is hard at work on a plan to gradually reopen things in Britain. Margaret.
MARGARET BRENNAN: Elizabeth Palmer, thank you.
We go now to Chicago, Illinois, and Governor J.B. Pritzker. Last week, he extended the state's stay-at-home order until the end of May. Good morning to you, Governor.
GOVERNOR J.B. PRITZKER (D-Illinois/@GovPritzker): Good morning.
MARGARET BRENNAN: Why is the number of hospitalizations in your state still increasing?
GOVERNOR J.B. PRITZKER: Well, it's increasing barely, it's true. But we have really bent the curve significantly. We're not through this yet. There's no doubt. And we've been looking to see those numbers flatten. We are seeing them flatten now. My great concern at this point is that we make sure we've got our contact tracing up and running. We have increased testing significantly. So we are getting ready for a point where we can begin to reopen the economy.
MARGARET BRENNAN: But there's some pressure on you. I mean, you had the mayor of Chicago say that residents aren't abiding by these calls to stay at home. You've had protests in Chicago, in Southern Illinois as well. Is the politics of this complicating things for you?
GOVERNOR J.B. PRITZKER: Not at all. I'm not thinking about the politics. I'm thinking about saving lives and keeping people healthy in our state. The fact is that there is-- there are millions of people in the state of Illinois who have been following our stay-at-home rule, and they are the ones who have bent this curve for us. It is true there are outliers. The mayor and I have talked several times about the challenge of people wanting to break the rules. But the truth is those are real outliers. And even the protesters, there were only a few hundred protesters. And although, you know, they sometimes carry reprehensible signs and, you know, are attacking what we're trying to do, we're still trying to keep them healthy as we are the 12.7 million Illinoisans across the state.
MARGARET BRENNAN: The presidential adviser, Jared Kushner, gave an interview this week. You heard a clip of it in the beginning of the show. And he said the country is on the medical aspect side of this improving and that the federal government rose to the challenge. Did the federal government rise to the challenge and meet your state's needs?
GOVERNOR J.B. PRITZKER: Well, it's the governors that have risen to the challenge, you know, I talked to my fellow governors, Republicans and Democrats. We have shared ideas with one another about how to keep people safe. We've gotten some guidance from the CDC that's been helpful. But much of what came out of the White House for many weeks was not helpful. We needed the White House to lead on the Defense Production Act to help us get swabs, to help us get VTM, to help us get reagents. That really hasn't much happened, although recently we got a call from the White House telling us that in May they're sending us six hundred thousand swabs, and I'm very grateful for that. We've, of course, overcome our challenges more recently and increased testing significantly. We're now among the top ten states in-- in America, we're number two for testing. We've got to get our contact tracing up and going. And then, as I say, we can reopen the economy as we see our hospitalizations begin to wane.
MARGARET BRENNAN: So do you agree then with Kushner when he says the biggest thing holding testing back is the state's ability to collect more samples?
GOVERNOR J.B. PRITZKER: You know a couple of weeks ago or maybe a week ago, the White House said that we have all the capacity we need. Well, they're right in the sense that there are plenty of machines that exist in the state of Illinois. But there weren't enough swabs, VTM and reagent. There still aren't. But the White House is helping, and I appreciate that--
MARGARET BRENNAN: Is it enough?
GOVERNOR J.B. PRITZKER: But re-- it's not enough. It's not enough today. But, again, as a state, we're having to go out in the market and compete with every other state to get swabs and VTM and reagents. I wish that the White House had stepped up earlier; and I think they still have the opportunity to do so when it comes to reagent. But the fact is that we're going to overcome this. I believe by mid-summer we'll be able to do tens of thousands more tests. And just, again, in May, we'll be able to do more than we're doing today, which is in the high teens.
MARGARET BRENNAN: Governor, you know, I-- I know that you have said and other governors have said that they will need more federal aid because of this crisis. But I want you to respond to to this because before the crisis, Illinois had one of the worst pension problems in the country. By your state's own admission, the pensions were underfunded by hundred and twenty-nine billion in 2019. Citing numbers like this, Republicans have characterized any emergency help now as, essentially, a bailout of-- of poor management. I mean, the President slammed you this week in a presser as well. Is-- is it reasonable for Congress if they put together the emergency aid you're asking for to attach strings that restrict how you spend it?
GOVERNOR J.B. PRITZKER: Well, let's point out that-- that all fifty states are suffering from a failure of revenues to come in over the last couple of months. Coronavirus has caused that. All of us are having to spend more on social services and health care to take care of people. And as far as Illinois goes we balanced the budget this year. We were on our way to a balanced budget for next year as well. So all we've asked for, and, frankly, the other forty-nine states, too, as far as I know, is just help to replace those revenues that we all lost--
MARGARET BRENNAN: You--
GOVERNOR J.B. PRITZKER: --as a result of this invisible killer.
MARGARET BRENNAN: So-- so do you think you'll get the money and will there be strings attached?
GOVERNOR J.B. PRITZKER: I don't know whether there'll be strings attached. I hope there aren't too many, because the fact is every state has a problem and it's different in every state where they need to put the dollars. So putting more strings on it makes it much more difficult for us to move forward to get our economies going. Remember, Illinois has one of the most important economies in the world, not to mention in the nation.
MARGARET BRENNAN: Certainly.
GOVERNOR J.B. PRITZKER: So the federal government is really the only entity that can step in and help us out.
MARGARET BRENNAN: We'll be watching that, Governor. Good luck to you.
GOVERNOR J.B. PRITZKER: Thank you.
MARGARET BRENNAN: We turn now to former FDA Commissioner Doctor Scott Gottlieb, who joins us from Westport, Connecticut, this morning. Good morning to you.
SCOTT GOTTLIEB, M.D. (Former FDA Commissioner/@ScottGottliebMD): Good morning.
MARGARET BRENNAN: So these federal social distancing guidelines expire this week. It's a-- a different story state to state over what's opening up. But you tweeted this week that you saw some worrying-- worrisome signals, specifically, when it comes to hospitalization rates. What is the direction of the epidemic?
SCOTT GOTTLIEB: Well, when you look across the country, it's really a mixed bag. Certainly cases are falling in the Tri-State region around New York City. But when you back out what's happening in New York, and New York is really driving a lot of the national statistics because it was such a large outbreak, around the nation, hospitalizations and new cases continue to rise. So there's about twenty states where you see a rising number of new cases: Illinois, Texas, Maryland, Indiana, Virginia, North Carolina, Tennessee have a lot of new cases on a daily basis. And so while mitigation didn't fail, I think it's fair to say that it didn't work as well as we expected. We expected that we would start seeing more significant declines in new cases and deaths around the nation at this point. And we're just not seeing that.
MARGARET BRENNAN: This morning Doctor Deborah Birx was on another network, and she said our projections were always that we would see between a hundred thousand and two hundred and forty thousand Americans' lives lost due to the virus. On Monday of this week, the President said it's probably sixty to seven-- seventy thousand dead. The week before, he said fifty to sixty thousand. Are these White House numbers reliable at all?
SCOTT GOTTLIEB: Well, the White House was looking at the IHME model out of Washington State. And that model initially showed at the high end two hundred and fifty thousand deaths and a base case of a hundred thousand. But it's come down since then to about seventy thousand. It's starting to creep back up when you look at the updates of that model over the last two weeks. I think we have to look out to what's going to happen by the end of June. It's really hard to predict beyond June where this goes because we could have large outbreaks or it could become quiescent in the summer. But I think when you look out to the end of June, it's probably the case that we're going to get above a hundred thousand deaths nationally. I think the concerning thing here is that we're looking at the prospect that this may be a persistent spread, that while the doubling time has come down dramatically to about twenty-five days. So the amount of days it takes for the epidemic to double in size is about twenty-five now, from day-- days or less than a week at the outset of this epidemic. We may be facing the prospect that twenty thousand, thirty thousand new cases a day diagnosed becomes a new normal and a thousand or more deaths becomes a new normal as well. Right now we're seeing, for about thirty days now, about thirty thousand cases a day and two thousand deaths a day. And if you factor in that we're probably diagnosing only one in ten infections--
MARGARET BRENNAN: Mm-Hm.
SCOTT GOTTLIEB: --those thirty thousand cases are really three hundred thousand cases.
MARGARET BRENNAN: Persistent spread is what you called it. So if we're going back to reopening business and life in America, what does that look like? You had airlines this week issue new guidelines. They're asking people to wear masks, giving them to them when they board. If someone has asthma, if someone has diabetes, something that makes them vulnerable. Is it safe for them to get on a plane when there's persistent spread?
SCOTT GOTTLIEB: Well, this may be the new normal. And we need to know what that looks like, and it's going to be a case where people who have comorbidities, have conditions that could lead to a bad outcome if they get infected, are going to need to be very careful. That may be the future that we're looking at. You know the challenge is that if we see this slow simmer through this summer--maybe this summer's a backstop to spread, I think it will be. But we see this sort of persistent twenty thousand cases a day, maybe thirty thousand, but it probably comes down a little. We see a persistent one thousand or more deaths a day. That's through this summer. But what happens when we come back in the fall and schools are back in session, colleges are back in session--residential college campuses. People are letting their guard down a little bit more. People are back at work after an August recess. And then you can see this slow simmer explode into a new epidemic or large outbreaks. That's the concern, that if we don't snuff this out more and you have this slow burn of infection, it can ignite at any time.
MARGARET BRENNAN: You've been warning of looking ahead to the fall, that that hasn't been addressed yet. You've also talked to us about this drug, remdesivir, that the FDA gave emergency authorization for this week. Is that one of the tools in the tool box that you say will exist in the fall that could make this better?
SCOTT GOTTLIEB: That's right. I think the more that we see persistent infection, the more we're dependent upon a technological change to really be an inflection point in this epidemic. Remdesivir is an effective drug. It's going to help some patients, especially when used early in the course of disease, to reduce hospitalizations, and reduce death. There's also the antibody drugs that we talked about that could be available by the fall. And vaccines may be available by the fall in doses sufficient to ring fence infections in cities while we continue to study them to make sure they're safe and effective for mass inoculation. I think the more that the government accepts the fact that there's just going to be persistent spread and they want to open the economy against that backdrop, the more they better be doubling down on the technology and make sure that we're doing--
MARGARET BRENNAN: Yeah.
SCOTT GOTTLIEB: --everything we can to get those drugs in time for the fall.
MARGARET BRENNAN: You said there may be a vaccine by the fall? That-- the Trump administration has set January in this Operation Warp Speed as their goal for three hundred million doses. Do you think it will be ready before that?
SCOTT GOTTLIEB: Well, I think what we're going to have in the fall is, hopefully, multiple manufacturers that have cleared early stage safety trials and have millions of doses that could be deployed in large-- large-scale studies inside cities. And so what you would do is deploy the vaccine in the setting of an outbreak in a city to both test whether it's safe and effective. So you're continuing to study it, but you're also using it potentially, therapeutically, to ring fence an outbreak. I think we're going to be in a position to do that. And I know companies are working on protocols, designing trials, to engage in that kind of deployment of vaccines. What we need right now is more than one manufacturer to be successful. We need multiple manufacturers, U.S.-based manufacturers, to have vaccines ready to deploy in time for the fall.
MARGARET BRENNAN: You know the country's two largest known coronavirus clusters are in prisons in Ohio. You hear about clusters in nursing homes, also in meat processing plants. There's a school of thought that says because these are highly concentrated, that somehow they're more manageable. What do you make of that argument?
SCOTT GOTTLIEB: Well, it's true to some extent. It might not be more manageable, but it's more vulnerable, and I think we need to understand that. Disadvantaged communities and certain kind of institutional settings where people can't naturally social distance are hotspots. They're very vulnerable. And we need to be putting resources into those kinds of settings. And it's not just the shop floors and warehouses and workers who are vulnerable to infection because of the way they work. That's certainly part of the story. But it's also people who come from communities where they have to take mass transit. They can't naturally social distance. They don't have access to good health care to begin with and can't get access to testing. Those communities are very vulnerable, and the data now supports that. We're seeing pockets of intense spread in these kinds of settings, in these kinds of communities, and we should be pouring resources in to help those people.
MARGARET BRENNAN: Doctor Gottlieb, thanks as always, for your insight.
SCOTT GOTTLIEB: Thanks a lot.
MARGARET BRENNAN: FACE THE NATION will be back in one minute. Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Joining us now is Daniel O'Day, chairman and CEO of Gilead Sciences, that's the pharmaceutical company that makes remdesivir. Good morning to you.
DANIEL O'DAY (Chairman and CEO, Gilead Sciences): Good morning, Margaret. Thank you for having me on.
MARGARET BRENNAN: So this drug shaves about four days off the recovery time of someone hospitalized with coronavirus, according to the government study. Now that your company has this emergency use authorization, how quickly will the drug get to those people who need it?
DANIEL O'DAY: Well, you know, I think I speak on behalf of all of us at Gilead that we are grateful and really humbled that everything has moved so quickly. You know, it's only been three months since the first case was diagnosed in the United States to the emergency use authorization that was provided this past Friday. That's thanks to a lot of patients and caregivers that participated in our clinical trials.
MARGARET BRENNAN: Mm-Hm.
DANIEL O'DAY: And we are now firmly focused on getting this medicine to the-- the most urgent patients around the country here in the United States. And, Margaret, we intend to get that to patients in the early part of this next week, beginning to work with the government, which will determine which cities are most vulnerable and-- and where the patients are that need this medicine.
MARGARET BRENNAN: I think that's important. You're saying you've-- you've donated some of this drug to the federal government, and you will work with the federal government to decide where the drug goes? Or is that up to the federal government to decide?
DANIEL O'DAY: Right, Margaret. So we've donated the entire supply that we have within our supply chain. And we did that because we acknowledge and recognize the human suffering, the human need here and want to make sure that nothing gets in the way of this getting to patients. And what we will do is-- is provide that donation to the U.S. government and they will determine, based upon things like ICU beds, where the course of the epidemic is in the United States. They will begin shipping tens of thousands of treatment courses out early this week and be adjusting that as the epidemic shifts and evolves in different parts, in different cities here in the United States.
MARGARET BRENNAN: Okay. Okay. Well, we have more to talk about with you, but I have to take a quick break here. So stay with us, and stay with us, all of you as well, please. More with Daniel O'Day in a moment.
(ANNOUNCEMENTS)
MARGARET BRENNAN: With all the news focused on the tragedy of COVID-19 you'd never know it but Election Day is six months from today. We have a new CBS News poll out this morning and that will be coming up in our next half hour.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We'll be right back with more from Daniel O'Day.
And later, we'll talk to the head of the Federal Reserve Bank of Atlanta, Raphael Bostic for a snapshot of the economy.
And is it safe to fly? Southwest Airlines CEO Gary Kelly joins us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Welcome back to FACE THE NATION. We want to pick up where we left off with Daniel O'Day, the head of Gilead Sciences, which produces the drug remdesivir, which was just given emergency use authorization.
I want to pick up on this. You said the-- the supply of one and a half million doses of remdesivir has been donated to the government. That's enough for what, a hundred and fifty thousand patients or so?
DANIEL O'DAY: Right, Margaret. Just to be clear, what we've done is we've donated the entirety of our supply, which is around 1.5 million vials, and that turns into around a hundred thousand to two hundred thousand treatment courses depending on whether it's a five-day or a ten-day. And this donation will be made available to patients here in America and the United States and across the world as other regulatory decisions are taken for those countries.
MARGARET BRENNAN: This drug is clearly going to be in demand since it's the-- the first sort of promising development we've had. You were at the White House, has the Trump administration talked to you at all about using the Defense Production Act to somehow mandate that you prioritize the U.S. market over foreign markets?
DANIEL O'DAY: Yeah, let me say something on the supply and the demand, because, you know, I am so proud to work with the scientists at Gilead that, you know, that quickly moved and mobilized themselves in January, long before we knew whether the medicine would be available, to increase the supply. This is a long supply process. It used to take around twelve months, and now it takes around six months. And because of the steps we took in January, we'll have significantly more supply in the second half of this year to serve the suffering and the human needs out there. We've been working very closely with the U.S. government, with other governments around the world. In terms of the allocation question, I think we're aligned with the U.S. government to both serve the patients here in the United States and then to be able to also make sure, as a global company based here in the United States, that we can serve other countries around the world as well. We've had very good dialogues with the government--
MARGARET BRENNAN: Mm-Hm.
DANIEL O'DAY: --and that's going well.
MARGARET BRENNAN: So they haven't talked to you about mandating the U.S. market be prioritized or taking it for the stockpile, for example. You can still export it?
DANIEL O'DAY: That's correct. We have been exporting for clinical trials and for compassionate use, thousands of treatment courses. And-- and our collaboration with the government has been such that we've been very transparent with them here in the United States. And we have a good relationship on-- on future allocation.
MARGARET BRENNAN: This drug you have to get through an I.V. right now, so it works for hospitalized patients. Will you develop other mechanisms? Does this ever become a pill someone can take at home?
DANIEL O'DAY: Yes. It's important to note that this medicine is really right now for the most severe patients in the hospital, and it's given by I.V. either through a five-day treatment course or a ten-day treatment course, depending on the stage and nature of the patient. But our scientists have been working since earlier this year to say, are there other ways that we could deliver this medicine, potentially, as Doctor Gottlieb mentioned, to earlier patients.
MARGARET BRENNAN: Mm-Hm.
DANIEL O'DAY: And in order to do that, we're looking at formulations such as subcutaneous formulations that may be given outside the hospital setting and possibly an inhaled version. This medicine is not suitable for oral administration because of the way it's metabolized. But there are ways we can look at formulations potentially that would get us to earlier patients and patients outside the hospital setting. That research is still ongoing, yet, hasn't yet read out. And we'll certainly keep you up to speed on that.
MARGARET BRENNAN: All right. We will be watching. Thank you very much, Mister O'Day.
DANIEL O'DAY: Thank you.
MARGARET BRENNAN: Well, the Trump administration predicts a significant comeback for the economy by the end of the year. But last week, Federal Reserve Chairman Jay Powell was blunt.
JEROME POWELL: Both the depth and the duration of the economic downturn are extraordinarily uncertain. I think everyone is suffering here, but I think those who are least able to-- to bear it are the ones who-- who are, you know, losing their jobs.
MARGARET BRENNAN: Chairman Powell also urged the Trump administration and Congress to take more emergency action. And he announced a loan program for medium-sized companies to help keep them running.
We turn now to the head of one of the twelve banks that make up the Federal Reserve System, Raphael Bostic. He is in Atlanta this morning. Good morning to you.
RAPHAEL BOSTIC (President and CEO, Federal Reserve Bank of Atlanta/@RaphaelBostic): Good morning, Margaret.
MARGARET BRENNAN: We just heard that very bleak assessment, in some ways, from the Federal Reserve chair. In the past six weeks alone, thirty million Americans have filed for unemployment claims. Are we headed for a depression?
RAPHAEL BOSTIC: Well, when I-- when I think about this question, I think the first thing to be mindful of is that the Federal Reserve is acting boldly and decisively to try to provide support for markets all across this country. Look, we knew that coming out of this public health crisis our-- that the response was going to do damage to the economy. And that was required if we were going to get to the other side. What we've tried to do is really provide support to give people a bridge from that pre-virus situation to the post-virus situation. And let me just say, in terms of the numbers, I think we knew that the jobless numbers were going to be bad for March. They're going to be tough again this Friday. But I think the real question, the thing I'm focusing on, is how many of these-- these jobs are going to-- job losses are going to be permanent as opposed to those that are going to be temporary losses. And a lot of the--
MARGARET BRENNAN: And what is the answer to that question?
RAPHAEL BOSTIC: Well, we're going to-- we're-- we are-- a lot of the-- the responses that we've been doing have been aimed to try to provide support and relief. And what I would tell you is right now it's too soon to tell.
MARGARET BRENNAN: Mm-Hm.
RAPHAEL BOSTIC: The-- the Pay-- Paycheck Protection Program, that money is just getting into the system. The economic impact payments, those are just going into the hands of families and households. And what we're going to do over the next week and several weeks is continue our outreach. Call businesses, talk to people and really try to find out whether the relief that's been offered has-- is sufficient--
MARGARET BRENNAN: Mm-Hm.
RAPHAEL BOSTIC: --or whether they need more. And also whether there are pockets that are missing. And if there are, we will talk to policymakers and make sure they're aware of it, to see if there are other things that might be done.
MARGARET BRENNAN: The-- the actions the Fed have taken are pretty unprecedented. In terms of things that you are forecasting and warning about, I know you personally, last month, said that the month of May could be make it or break it for many businesses. It's not just about cash anymore. It's about staying solvent. Does that mean you're predicting a large number of bankruptcies in the weeks to come?
RAPHAEL BOSTIC: No, it doesn't mean that at all. And let me just provide some context. We know that for many businesses and for many families, they don't have six or seven or eight months of savings. Instead, they may only have one or two months of savings, which means we're getting about to the time when those savings are going to be depleted. This is why so many of the actions that have been taken have been so important, getting relief into families. And so what we're trying to do right now is understand to what extent is that relief providing its service and keeping people away from those bankruptcies because it is not in our interests for those bankruptcies to happen. That will mean that much more of this is permanent than temporary. And we're going to do all we can to make sure that doesn't happen.
MARGARET BRENNAN: So you're president of the Atlanta Fed. That means you monitor closely what's happening in the American South. States like Florida and Georgia are reopening. What do-- what do these initial days and weeks indicate to you? I mean, just because consumers can go out, does that mean they're actually going out and spending?
RAPHAEL BOSTIC: Well, we've talked-- we've talked to a lot of folks, a lot of consumers, and a lot of businesses, and what we're hearing is that many are actually being quite thoughtful in terms of how they're approaching this. You know, one of the things that is very important as you look through the South is that the virus is presenting itself differently in different populations. We know that African Americans are being hit much harder by this. And so the response of how we reopen the economy has got to be thoughtful. What I've been encouraged by is that many businesses that have the option are choosing not to do that where I've talked to a number of leaders of-- of important and small businesses that say we're going to keep doing our restaurant, our curbside delivery. We're going to keep doing our social distancing to try to make sure that as we open up we don't do it in a way that adversely impacts the population and leads to another spike in terms of infections.
MARGARET BRENNAN: The Fed chair was clear that he is watching closely what's happening in the mortgage market. So many Americans have had to put off their monthly payments. What level of risk is there? You know the housing market. What level of risk is there that we are facing a banking or a financial crisis in the months ahead?
RAPHAEL BOSTIC: Well, I-- I was in-- in the government through the last crisis when it was a housing crisis. And, fortunately, this is not that right now. What I would say is this is that there have been some policies put in place.
MARGARET BRENNAN: But could it be in the months ahead? Is that what this warning-- that you're watching closely, the mortgage servicers? Is that what you're saying?
RAPHAEL BOSTIC: Well, what I'm saying is that we're going to do what it takes to make sure that doesn't happen, that we-- we know where there are stress points. We know where there are tensions. And if we see those tensions start to get to a higher level, we're going to-- we're going to encourage policymakers across the spectrum to do that. One other thing I would say is that the banking sec-- sector coming into this crisis is much stronger than it was in 2007 and 2008. There's much more capital.
MARGARET BRENNAN: Yeah.
RAPHAEL BOSTIC: We've taken a lot of steps to make sure that-- that banks do have resources available so that they are not in that insolvency space. And I'm hopeful that they're going to be able to be part of the solution in terms of extending capital, mod-- modifying the mortgages--
MARGARET BRENNAN: Mm-Hm.
RAPHAEL BOSTIC: --and loans and financial relationships they have with businesses and households in ways that reduces the tension and allows families to be able to forbear for even longer than they can right now.
MARGARET BRENNAN: So one of the things that the Fed did this week was say that it'll, essentially, buy more debt of-- of local governments to help them out. As we've been hearing from governors and local leaders, they are under a lot of financial stress right now. But the Fed chair also said that's basically not-- the Fed's job is to lend money, not to spend money. He-- he pointed right at Congress and said it's up to you to do something at this point. What is it that the states need in terms of relief, from your point of view, from what you are seeing?
RAPHAEL BOSTIC: Well, first, I would just say that as the Federal Reserve, we stand ready to act as much as we can within the limits of the law. And the chair was exactly right. We are-- we have limits as to what we can do and how much support we can offer. I think it's an open question as to how much more is going to be needed. And we're going to continue, as we engage with governments and helping them with their financing, to understand the depth of that need--
MARGARET BRENNAN: Yeah.
RAPHAEL BOSTIC: --and then communicate that to policymakers so they can decide how much extra support might be necessary. But, you know, for us, we are very much in a situation--
MARGARET BRENNAN: Mm-Hm.
RAPHAEL BOSTIC: --where we're going to do what we can, what we're legally allowed to do as much as we can.
MARGARET BRENNAN: Right.
RAPHAEL BOSTIC: And then take information and get that to policymakers--
MARGARET BRENNAN: Okay.
RAPHAEL BOSTIC: --so they can decide the next step.
MARGARET BRENNAN: All right. Thank you very much.
We'll be right back with Gary Kelly, the head of Southwest Airlines.
(ANNOUNCEMENTS)
MARGARET BRENNAN: The airlines are just one of the many industries hit hard by the coronavirus pandemic. With the number of air travelers plummeting ninety-six percent, half the U.S. fleet of planes is grounded, and the planes that are taking off are nearly empty, averaging just seventeen passengers per domestic flight. Congress has given the industry fifty billion dollars in financing, either as loans or grants. Despite that assistance, the four biggest carriers reported massive first-quarter losses last week.
One of those airlines is Southwest Air. Gary Kelly is the company's chairman and CEO, and he joins us from Dallas this morning. Good morning to you.
GARY KELLY (Chairman and CEO, Southwest Airlines/@gary_kelly): Hi, Margaret.
MARGARET BRENNAN: Is it safe to fly again?
GARY KELLY: It is. You know, we're-- we're-- we're doing everything possible to encourage people to come back and fly. We're cleaning airplanes. We're requiring masks of our employees and our customers. We're using very deep cleanings every night. We're using electrostatic misters, which will kill the virus on surfaces for up to thirty days. We're exercising social distancing. And on board the aircraft, we-- we won't be booking airplanes full so that people can spread out. So, absolutely, we're doing everything we can to make it as safe as humanly possible.
MARGARET BRENNAN: And you stopped things like food service and the like. I mean, those sound like good measures. But, you know, we had a guest on our program last week, Barry Diller, who is-- is a big investor. And he said it's just absurd if you do things like remove the middle seat to have some spacing. I mean, to his point, you still have a confined space. You still have a shared bathroom. You still have people who are walking down the aisle, going to their seat, walking past you. How-- I mean how much risk is there? What do you think the measures you're taking do to offset everything else?
GARY KELLY: I don't think the risk on-- on an airplane is any greater risk than anywhere else, and, in fact, you just look at the layered approach that we use. It's-- it's as safe as an environment as you're going to find. We're using hospital quality disinfectants, HEPA air filters to make sure that the air is-- is properly filtered and clean. We're not going-- going to remove middle seats or prohibit people from sitting in middle seats. But, at the same time, we won't book the airplanes full. So, you know, if you choose, all the middle seats can be open.
MARGARET BRENNAN: So I know you said at one point that-- that what you're going through now was worse than after 9/11, which is extraordinary. But I mean is the bottom line here that cheap travel is over for Americans for the future, that the business is just completely changing and that the future is uncertain?
GARY KELLY: Well, sure, the future is uncertain. But, you know, right now we're-- we're at a low point. And so I just don't think it's right to extrapolate today in-- into perpetuity.
MARGARET BRENNAN: Mm-Hm.
GARY KELLY: So we'll get through this. But, in the meantime, I think it's actually the-- the opposite. After 9/11, Herb Kelleher was famous for saying that we're all low-fare carriers now because that's what it's going to take to get people flying. And that is certainly the case today. And I think we're very well prepared for that. We've got a strong balance sheet. We've got a lot of cash. We've got a great business model and a low-cost structure. But we're going to have to fight our way through this. And, obviously, I'm anxious to see how the travel demand develops here in the summer.
MARGARET BRENNAN: It's picking up?
GARY KELLY: Well, I-- yeah. I think we've seen the bottom here in-- in April. Each week after the first week of April has gotten successively better. I think May will be better than April was, and I-- I don't think June will be a good month, but, hopefully, it will be a bit better than May. And then we're looking forward to July and August, and we'll just have to see. There are bookings in place. But those could easily be canceled. So it's-- it's really one day at a time.
MARGARET BRENNAN: Southwest has taken about 3.2 billion in federal aid. Do you expect to take more?
GARY KELLY: You know I mean the first thing is to re-- really thank the Congress, the administration, Secretary Mnuchin, Secretary Chao, because what was needed for our country was a lot of liquidity. And the CARES Act was exactly what we needed to avoid a-- a really serious depression. We've applied for another government loan. I don't know that we'll take it. I think what the government has done for us with this CARES Act is it really has opened up the capital markets.
MARGARET BRENNAN: Mm-Hm.
GARY KELLY: A month ago we couldn't have borrowed money, we couldn't have raised equity. And we were able to raise six billion dollars last week. So I think that we've got what we need to see our way through. But if we have to seek another government loan, we will do that. We have until September to make that decision.
MARGARET BRENNAN: And we know because of the first round you took that you can't lay off anyone until after September 30. That was part of the-- the CARES Act provision. I know, though, you recently told employees that if business doesn't pick up by July, that you'll become a dramatically smaller airline. What does that mean? Are you laying the groundwork for job cuts?
GARY KELLY: Well, you know, I think you summarized it well with your-- with your comments. The-- the planes are virtually empty, and we've got-- at Southwest alone we've got close to four hundred airplanes that are parked. The-- the-- the demand is just not there. So, obviously, if things don't improve, we have to downsize. We've never had a furlough in our history. We've never had a pay cut in our history. And I'm extraordinarily proud of that. And we certainly don't want to break that record. What I promised our people is I don't know what the future holds, but I do know that we're very well prepared--
MARGARET BRENNAN: Mm-Hm.
GARY KELLY: --and the very last thing that we'll do--
MARGARET BRENNAN: Yeah.
GARY KELLY: --is have an involuntary furlough.
MARGARET BRENNAN: Okay.
GARY KELLY: So we'll just have to see how things play out and do our best to avoid those-- those-- those kinds of results.
MARGARET BRENNAN: Thank you very much for your time. We'll be back in a moment.
(ANNOUNCEMENTS)
MARGARET BRENNAN: It's six months until Election Day and there is news from the campaign trail. Presumptive Democratic presidential nominee Joe Biden publicly denied a former aide's accusation that he sexually assaulted her in 1993. Our CBS News political correspondent Ed O'Keefe reports.
(Begin VT)
JOE BIDEN: In every case, the truth is what matters. And, in this case, the truth is these claims are false.
ED O'KEEFE (CBS News Political Correspondent/@edokeefe): Joe Biden on Saturday once again denied accusations of sexual assault. His accuser, Tara Reade, worked for him for nine months ending in 1993. Last year she was among several women who recounted what they called inappropriate touching by Biden. She began detailing more serious allegations for the first time in March.
TARA READE (Northern California): I remember his hands underneath my bust, underneath my skirt. And his fingers penetrating me as he was kiss-- trying to kiss me, and I was pulling away.
WOMAN: (INDISTINCT)) going to win today?
ED O'KEEFE: Reade supported Bernie Sanders during the Democratic primary and began speaking out again as Biden was on the verge of securing the nomination. CBS News has spoken multiple times with Reade and we have requested an on-camera interview. She is the only individual who has accused Biden of sexual assault. Some of her acquaintances, former colleagues, and her brother tell CBS News they recall her mentioning the alleged Biden episode in the 1990s, but details of her brother's account have differed in interviews with other news outlets. Several former Biden Senate aides have said that they never heard about Reade's allegations while working for him. And Attorney Bill Jeffress, who led the vetting of Biden for Barack Obama's 2008 presidential campaign, tells CBS News that his investigation never turned up allegations of sexual misconduct.
(End VT)
MARGARET BRENNAN: And Ed O'Keefe joins us. Ed, it's good to see you and to talk about politics again. This story, I mean, it-- it opens up a lot of questions, but-- and-- and it's important to investigate these kind of allegations. Politically, if President Trump faces accusations from more than twenty individuals about sexual harassment and abuse, does it hurt Biden if it didn't hurt Trump? I mean is there a political cost?
ED O'KEEFE: We'll see. A lot of this is going to boil down to whether or not there are any records of a complaint that Reade says she made to a Senate personnel office back in the 1990s about general harassment concerns with Biden. He's called for their release. But Republicans especially this morning are making a hypocrisy argument that if it was a big deal for Donald Trump, it was-- if it was a big deal for Brett Kavanaugh's Supreme Court confirmation, shouldn't it also be a big deal for Joe Biden's presidential prospects. You're right. Trump won the White House, Kavanaugh got confirmed. We'll see, ultimately, whether or not it matters for Biden and his fortunes.
MARGARET BRENNAN: All right. Well, I want to ask you about some of our CBS News polling, because we have new data out today and this new national poll shows that in the head-to-head matchup, Biden is ahead of President Trump by six points, forty-nine percent versus forty-three percent. And since the Biden campaign started officially vetting vice-presidential possibilities last week, he's pledged to name a female running mate. So we then asked who Democratic voters would like to see on the ticket alongside him. Massachusetts Senator Elizabeth Warren is the top choice among Democrats polled at thirty-six percent, followed by California's Senator Kamala Harris at nineteen percent, former Georgia gubernatorial candidate Stacey Abrams at fourteen percent, Senator Amy Klobuchar comes in at thirteen percent. So it's interesting, but when it comes to the guy at the top of the ticket, Biden himself, what does this indicate? Why is Trump behind him?
ED O'KEEFE: Well, he's always been either pretty much tied or very close with Biden in head-to-head-- head-to-head matchups. And he is known nationally, as well as in a lot of these battleground states. Part of the issue here is the economy. He wanted to run on a strong economy. He can't do that anymore. And if the economy continues to crater, it's going to be really difficult for him to continue making that argument.
MARGARET BRENNAN: Well, it's difficult to campaign, period, these days. President Trump tweeted this morning: "Hopefully, our country will soon mend. We're all missing our wonderful rallies." Is the country missing political rallies, Ed?
ED O'KEEFE: Well, look, the President may be itching to get back out there, but a new poll out this morning, our new poll, finds that voters say they're seeing the President too much. Just eleven percent saying they're seeing the President enough. And while Biden has been holed up in his Delaware basement doing TV interviews and holding virtual rallies, voters say they'd actually like to see more of him. Forty-seven percent say they'd like to see him more often. Perhaps the good news for both of these men, they like to campaign, they're strong retail politicians. And, overwhelming, eighty-four percent of voters in our polls say that just because they're out there-- they're not out there doing rallies, won't affect their final decision. In other words, voters telling the candidates it's okay, stay home.
MARGARET BRENNAN: And there is nothing typical about this race, this year, this moment.
ED O'KEEFE: Not at all.
MARGARET BRENNAN: And Ed, I know-- Ed, you'll be watching it closely for us. Thank you.
We'll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: That's it for us today. Thank you all for watching. Until next week, for FACE THE NATION, I'm Margaret Brennan.
