The Memo: Biden faces risks as COVID optimism stops

The wave of optimism that followed the approval of the first COVID-19 vaccines is receding – and that could create problems for President Biden.

U.S. deaths from the virus reached 80,000 in January, making it the nation’s deadliest month. And new strains are worrying scientists, including a mutation from the UK that is more contagious, and potentially deadlier, than those seen previously.

On Wednesday, the new head of the Centers for Disease Control and Prevention, Rochelle WalenskyRochelle WalenskyOvernight Health Care: Biden adviser makes more pessimistic predictions on vaccine rollout | CDC says coronavirus could kill up to 514K by February 20 | Vaccine research funds have been misused for decades, watchdog says U.S. CDC projects could see up to 514K coronavirus deaths by February 20 Problems interrupt first briefing COVID-19 Zoom under Biden PLUS, said the total U.S. death toll from the virus would reach around 500,000 on February 20 based on the current trajectory. More than 425,000 people have died to date.

There have also been issues with the rollout of vaccinations, with state level officials complaining about not knowing how many vaccines will be available at any given time.

While the new administration has been in power for only a week and cannot reasonably be blamed for many of the current problems, the problems spill over into the economy – posing considerable political risk for Biden.

The Dow Jones Industrial Average and the broader-based S&P 500 each fell more than 2% on Wednesday, the latter having its worst day since October, as the Federal Reserve left interest rates close to zero.

Retail sales have been below expectations for the past two months. The latest monthly jobs report showed the country suffered a net loss of jobs for the first time in eight months in December.

Any further deterioration could undermine Biden’s political capital at an abrupt speed.

Rightly or not, he will be held responsible for prolonged economic malaise, just as President Obama’s polls declined early in his first term as a financial crisis that began under the previous administration blew jobs.

“I think its approval rating and popularity will depend critically and foremost on the deployment of the vaccine. If that doesn’t go well, he will be blamed whether it’s his fault or not, ”said Mark Zandi, chief economist at Moody’s Analytics.

“If the pandemic gets out of hand, so does the economy, and he will be blamed for that too,” Zandi added.

At the moment, there is a growing consensus that a rapid economic recovery seems less and less unlikely.

“The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most affected by the pandemic,” the Open Market Committee said on Wednesday. the Federal Reserve in a statement.

Biden is making a big push to mitigate the economic effects of COVID-19 with his proposed $ 1.9 trillion bailout. The proposal, which calls for direct payments of up to $ 1,400 for millions of Americans and the minimum wage of $ 15 an hour, faces an uncertain outlook in Congress.

Biden also claimed the situation with the pandemic is even worse than he feared, preparing the country for many more months of a grueling battle.

Speaking at the White House on Tuesday, the president equated the fight against COVID-19 as “a war effort” and noted that it was “no secret that we recently discovered … vaccination is in worse shape than we expected or expected. “

Biden has appointed a coronavirus response coordinator and has resumed regular White House briefings of medical experts, including Anthony FauciAnthony FauciOvernight Health Care: Biden adviser makes more pessimistic predictions on vaccine rollout | CDC says coronavirus could kill up to 514K by February 20 | Vaccine research funds have been misused for decades, watchdog Fauci, confident vaccine companies ready for ‘mutant’ coronavirus strains Fauci defends Birx: ‘She had to live in the White House ” MORE, the director of the National Institute of Allergies and Infectious Diseases. The president promised on Tuesday that states will have “a reliable three-week forecast of the supply they will receive” in terms of vaccinations.

There have been small missteps.

White House press secretary Jen psakiJen PsakiOvernight Health Care: Biden adviser makes more pessimistic predictions on vaccine rollout | CDC says coronavirus could kill up to 514K by February 20 | Vaccine research funds have been misused for decades, watchdog says McCaul urges senators to block vote on Commerce secretary over Huawei concerns White House goes full blast to COVID-19 PLUS relief talks Biden told reporters on Tuesday that Biden did not set a concrete goal when he suggested that 1.5 million people a day – instead of the previously reported figure of 1 million – could soon be vaccinated.

“The president didn’t really say, ‘The new goal is …’ The president said, ‘I hope we can do even more than that,'” Psaki said.

Biden says 300 million Americans could be vaccinated by early fall. In a way, it’s a note of optimism. But it also underscores how much time is left before anything that comes close to normal life – or normal economic activity – resumes.

Earlier this week, the Governor of California. Gavin NewsomGavin NewsomFBI Says California Extremist May Have Targeted Newsom The Hill’s Morning Report – Biden Advocates For Legislative Patience And Urgent Action Amid Crisis Portland Mayor Blasts Man After Restaurant Showdown MORE (D) surprised many observers by announcing an easing of restrictions, despite the fact that coronavirus cases in his state were only at increased levels recently.

“The biggest threat is that Californians are taking this as a signal to let their guard down, even as the virus continues to rage,” a Los Angeles Times editorial warned. “The state cannot afford to continue the cycle of one step forward and two steps back that has held us firmly in the grip of the pandemic.”

Public health experts like Kavita Patel, a doctor and non-resident fellow at the Brookings Institution, fear real dangers.

“I know the restrictions are tough. People are tired, ”she said. “But the new strains, coupled with a tired population, are of great concern – a recipe for disaster.

Public mood over the virus remains gloomy, despite the existence of vaccines.

In an Economist-YouGov poll released Wednesday, only 17% of Americans believe “the worst part of the pandemic is behind us”. Almost twice as many, 31 percent, thought “the pandemic will get worse”. Thirty-two percent said we were “currently in the worst part” of the battle against the virus.

It is always possible that the worst case scenarios, in terms of public health and economic impact, will be avoided.

The vaccination process could improve, new viral mutations could have minimal effects, and economically pent-up demand could lead to further growth as the health threat subsides.

At present, however, all of this seems far from certain.

“The economy is struggling and the path of the pandemic has become more uncertain,” Zandi said.

The Memo is a column published by Niall Stanage.