We thank Rob Smith for giving us permission to offer readers his recent commentary about the federal budget logjam and how it was impacted by Covid research funding. Rob, who serves as managing director at Capital Alpha Partners (https://capalphadc.com), covers all dimensions of health care in his analyses. We wish the reality were otherwise, but we unfortunately must agree with Rob’s assessment.
The nation is tired of Covid and wants to move beyond it. The virus, on the other hand, doesn’t care what the citizens think and will evolve in its own course: notice the BA2 variant expansion throughout the country. Remember, the natural propensity for Covid is to mutate into new forms so it can infect and reinfect. There are now cases of people who have had Covid three times from three different variants.
So what will break the logjam of funding for continuing the fight of the US government and the 50 states against Covid? Rob suggests it will take another surge. Here’s his commentary.
Only Covid Can Break the Covid Funding Logjam
By Rob Smith
March 17, 2022
We do not believe that the WH's pleas for more Covid funding and the imminent expiration of key pandemic program dollars will produce a breakthrough on the stalled $15.6b emergency supplemental package.
Republicans are almost unanimously against allocating additional unoffset funds. Democrats clearly take issue with the previous plan to recoup unspent state and local Covid appropriations. A revised Covid package partially offset with expired or returned funds hasn't gotten off the ground in the House and faces a bleak Senate outlook.
We don't see either side moving forward until they have to. In our view, a concerning new variant will need to spread in the US to the point where unfunded response programs become politically unpalatable for Congress to approve additional Covid dollars.
Here, we’re watching the recent surge in EU Covid cases under the BA.2 Omicron sub-variant. Even with initial signs that a corresponding wave may develop in the US, we believe that any resulting emergency package will be underwhelming and short-term.
We reiterate that securing and maintaining the long-term level of pandemic preparedness capabilities that the WH and many in Congress aspire to will be extremely difficult to achieve without some novel funding approach. In the meantime, look for the administration to continue to prepare for shifting some of Covid vaccine and treatment expenditures to plans and public insurance programs.
Many thanks again to Rob Smith for giving us permission to share his comments with our readers.
Around the country commentators are questioning this political budget impasse and the judgment of our politicians. Here’s a sample from the Philadelphia Inquirer, from an Inquirer Alert emailed to subscribers on Friday, March 18, 2022.
“Millions still haven’t gotten COVID shots. What does that mean for the future of the vaccination effort? The slowdown raises questions about where the vaccine effort goes from here, how long resources should be spent on outreach, and whether the strategies of the last year are still effective in persuading the unvaccinated, who are at higher risk of severe illness, hospitalization, or death from COVID. It comes as experts urge preparedness for the next surge and, after funding plans last week collapsed in Congress, the future of the national coronavirus response is uncertain.”
(Linked article can be read by subscribers only: “Millions still haven’t gotten COVID shots. What does that mean for the future of the vaccination effort?” https://www.inquirer.com/health/coronavirus/covid-vaccination-rate-pa-nj-endemic-demand-20220318.html.)
David R. Kotok
Chairman & Chief Investment Officer
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