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On The Money: Governors rethink opening bars, restaurants amid spike in COVID-19 cases | Spiking cases threaten fragile economic recovery | Supreme Court rules consumer bureau director can be fired at will

On The Money: Governors rethink opening bars, restaurants amid spike in COVID-19 cases | Spiking cases threaten fragile economic recovery | Supreme Court rules consumer bureau director can be fired at will
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THE BIG DEAL—Governors rethink opening bars, restaurants amid spike in COVID-19 cases: State and local officials are facing pressure to keep bars and indoor dining closed as the U.S. reckons with another upswing in COVID-19 infections weeks after lockdown measures were lifted. 

  • Indoor venues where people eat, drink and socialize have become sources of COVID-19 spread in several states where cases are rising, forcing leaders to reevaluate their decisions to allow bars and indoor restaurants to reopen during a pandemic. 
  • Meanwhile, governors who have not yet allowed those facilities to reopen said they will reconsider their plans to do so. 

“I think across all these states, we just can’t have bars — I’m not sure that we can even run restaurants where people are sitting indoors, nightclubs. Anything that gathers people indoors I think at this moment is way too risky and has to be dialed back,” said Ashish Jha, professor of global health at the Harvard T.H. Chan School of Public Health, on NBC’s “Today” on Monday.

The Hill’s Jessie Hellmann explains here.

The resurgence : 

  • Indoor areas where people congregate, such as nursing homes and prisons, have been hot spots for infection since the early days of the pandemic. 
  • Now that states are reopening and people are leaving their homes, other indoor establishments, including bars, restaurants and nightclubs, are becoming sources of infection, especially if people don’t wear masks or follow social distancing measures.
  • While many states require that bars and other indoor establishments follow social distancing rules to prevent crowding, they are not always followed by patrons, and COVID-19 cases have been tied to establishments in several states.  

The economic fallout: The surging coronavirus is threatening to derail a budding recovery from the pandemic-driven recession.

With the hardest-hit states now taking lockdown steps reminiscent of March and April, economists warn the road to recovery may get a lot more painful, with some regions weighing down the rest of the country’s economic prospects. That scenario would also deal a significant blow to President TrumpDonald John TrumpHillary Clinton responds to Chrissy Teigen tweet: 'I love you back' Police called after Florida moms refuse to wear face masks at school board meeting about mask policy Supreme Court rejects Trump effort to shorten North Carolina mail-ballot deadline MORE, whose reelection campaign focuses heavily on the economy.

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“Renewed restrictions in some cities, counties, and states already are underway, and more will follow,” wrote Ian Shepherdson, founder and chief economist of research consultancy Pantheon Macroeconomics, in a Friday research note.

“With fear of the disease keeping people home, the recovery [in] the South — which is already faltering — could easily go into reverse,” he added.

I have more here.

  • A resurgence in cases could be ruinous for businesses and employees who barely survived the first lockdown orders. 
  • Roughly 15 million laid-off workers told the Labor Department in May that they expected to return to their pre-pandemic jobs, but another round of lockdowns may prevent that from happening.
  • Economists have also warned that fear of the virus itself will prevent the U.S from a full recovery even if state and local governments lift all restrictions.

“Consumer spending sprung back to life in May and registered a record 8.1% advance as the nation reopened. But, don’t be fooled, the rebound was only partial and largely supported by April’s massive fiscal stimulus injection,” wrote Lydia Boussour, senior U.S. economist at research firm Oxford Economics, in a Friday analysis.

“A failure to provide additional fiscal stimulus would further threaten the nascent recovery,” she added.

 

Read more: The two top congressional Democrats are urging Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell: Battle for Senate 'a 50-50 proposition' 'Packing' federal courts is already a serious problem What a Biden administration should look like MORE (R-Ky.) to start negotiations on the next coronavirus relief package, as the country sees an uptick in cases. 

 

On tap tomorrow

LEADING THE DAY

Supreme Court rules consumer bureau director can be fired at will: The Supreme Court on Monday ruled that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional, striking down the protections that prevented the agency's director from being fired at will.

The court said in a 5-4 decision, which hands a victory to Republicans, that the firing protections are an unconstitutional restraint on the president's ability to oversee executive branch agencies.

"Such an agency lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from Presidential control," Chief Justice John Roberts wrote in the majority decision, joined by his conservative colleagues.

"The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will," Roberts added.

The Hill’s Harper Neidig breaks it down here.

The background: The CFPB was established as part of the 2010 Dodd-Frank Act with a single director to be nominated by the president and confirmed by the Senate to a five-year term. Under the act, the director could only be removed by the president for “inefficiency, neglect of duty or malfeasance."

The decision: The court ruled on Monday, however, that the arrangement undermines the administration's ability to pick executive branch officers. Roberts wrote that those for-cause protections are unlawful when applied to an agency led by a single director but are acceptable for regulators led by multiple commissioners, like the Securities and Exchange Commission and the Federal Trade Commission.

The four liberal justices — Stephen BreyerStephen BreyerBarrett to use Supreme Court chambers previously used by Ruth Bader Ginsburg Justice Barrett's baptism by fire: Protecting the integrity of elections Supreme Court reinstates ban on curbside voting in Alabama MORE, Ruth Bader GinsburgRuth Bader GinsburgPence seeks to lift GOP in battle for Senate 'Packing' federal courts is already a serious problem McConnell and Schumer's relationship shredded after court brawl MORE, Elena KaganElena KaganBarrett to use Supreme Court chambers previously used by Ruth Bader Ginsburg Justice Barrett's baptism by fire: Protecting the integrity of elections Supreme Court rejects Democrats' bid to reinstate mail-in ballot extension in Wisconsin MORE and Sonia SotomayorSonia SotomayorLawsuit claims census supervisors pressured workers to falsify data Barrett to use Supreme Court chambers previously used by Ruth Bader Ginsburg Justice Barrett's baptism by fire: Protecting the integrity of elections MORE — dissented, accusing the majority of inventing an arbitrary distinction between the CFPB and other agencies.

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The fallout: The ruling does not dismantle the controversial financial regulator but it does settle some questions that had long cast a shadow over the Obama-era bureau. Progressives who opposed the legal challenge and conservatives who supported it largely agreed that the decision would do little to curb the CFPB’s immense power.

Even so, attorneys who represent financial firms facing probes by the consumer agency say Monday's ruling in Seila Law vs. CFPB may have opened a pathway to challenging nearly a decade's worth of sweeping rules and steep penalties.

“It certainly puts a lot of it into suspect and scrutiny,” said Joann Needleman, an attorney at law firm Clark Hill who represents clients under investigation by the CFPB. “Anybody who's got an enforcement action now is going to consider what challenges that they will bring to the court."

I explain why here.

 

IRS watchdog details coronavirus-related challenges for taxpayers: The IRS's in-house watchdog on Monday released a report describing challenges facing taxpayers in light of the coronavirus's effects on IRS operations.

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"The spread of COVID-19 brought much of the country to a grinding halt, and that was largely true of the IRS’s operations — and right in the middle of the filing season no less," National Taxpayer Advocate Erin Collins wrote. "Despite the IRS’s best efforts, there have been notable adverse taxpayer impacts."

  • Collins said that taxpayers who filed paper tax returns may have to wait a considerable amount of time to get their refunds. The agency estimated that as of May 16, it had a backlog of 4.7 million paper filings, according to the report.
  • Collins noted that the IRS coronavirus-related closures made it harder for taxpayers to get assistance both in person and over the phone. While the agency has started to reopen, it will take a while for its customer service operations to return to full capacity, the report said.

The Hill’s Naomi Jagoda tells us more about the challenges facing the IRS here.

GOOD TO KNOW

ODDS AND ENDS

  • President Trump threatened to veto House Democrats' $1.5 trillion green infrastructure plan on Monday, arguing it should eliminate or reduce environmental reviews and doesn’t route enough money to rural America.
  • Op-Ed: Marc L. Busch, a nonresident Senior Fellow at the Atlantic Council, argues why “Withdrawing from the WTO would punish the US, not China”