Memo from the S.J. Quinney College of Law Career Development Office, 2022-04-05: Covid Deaths, Omicron, Vaccinations, the Economy, and Law News

Memo produced by James Holbrook from the S.J. Quinney College of Law Career Development Office "for the Dean of the College of Law about Covid disease, coronavirus vaccines, the economy and employment."

Covid Deaths, Omicron, Vaccinations, the Economy, and Law News To: Dean Elizabeth Kronk Warner Date: April 5, 2022 From: S.J. Quinney College of Law Career Development Office Covid Cases and Deaths, Omicron, and Vaccinations More than six million known Covid deaths worldwide have been reported since the start of the pandemic, although experts say no one will ever know the true Covid death count. As of April 4th, the U.S. had 80.2 million reported Covid cases resulting in more than 981,000 reported Covid deaths since February 29, 2020. As of April 4th, the U.S. was averaging 30,000 new Covid cases a day and 655 new Covid deaths per day – at this rate the U.S. will exceed 1 million Covid deaths before the end of May. The Omicron BA.2 subvariant is causing nearly a quarter of all new Covid cases in the U.S. This Omicron subvariant is more transmissible than Omicron but does not cause more serious Covid disease. The Pfizer and Moderna mRNA vaccines are effective against the BA.2 subvariant. Covid hospitalizations are at their lowest levels since the U.S. began keeping records at the start of the pandemic. Average Covid hospitalizations fell to 16,760, lower than the previous low of 16,808 set before the Delta wave in June 2021. In just the past two weeks, Covid hospitalizations have fallen by 32% in the U.S. However, U.S. rates of new coronavirus vaccinations also are at their lowest level since the vaccines were rolled out in December 2020. Only 65% of Americans are vaccinated with two shots and only 45% of those have gotten a booster. A surge in Covid infections in Western Europe and China has U.S. health experts predicting another wave of the pandemic in the U.S., even as most of the country has done away with coronavirus restrictions after a sharp decline in cases. China has ordered a lockdown of the 26 million residents of Shanghai to try to prevent the spread of the coronavirus beyond the city. A review of 14 million patient records showed that pregnancy puts women at a greater risk of breakthrough infection than any other medical circumstance. The findings underscore how important it is for pregnant women to get fully vaccinated, boosted, and continue masking and social distancing to protect themselves from infection. The pandemic was a significant factor in the dramatic slowing of U.S. population growth last year: nearly 75% of U.S. counties reported more deaths than births in 2021, creating the smallest population increase in a century. The pandemic also was a significant factor for teens struggling with mental health issues. Survey data from the first six months of 2021 just published by the CDC showed that 4 in 10 adolescents said they felt “persistently sad or hopeless” and 2 in 10 said they had contemplated suicide. At-home rapid Covid tests, once hard to come by, are now piling up on pharmacy shelves across the U.S. as Covid cases dip and demand wanes. On March 23rd, Moderna announced its two-dose pediatric coronavirus vaccine is safe in young children, toddlers, and infants, but the effectiveness against Omicron in children 6 months to 5 years old was less robust than its two-dose regimen for young adults, particularly in preventing infections. The vaccine did protect against severe Covid disease in very young children and to a reasonable extent against mild and moderate disease. Children younger than 5 remain the last group in the U.S. not yet eligible for a vaccine. There are 19 million children in this age group. Moderna said it will submit its data to the FDA in the coming weeks to request emergency use authorization of its vaccine for very young children. Moderna’s clinical trial involved 7,000 young children who received two shots of a 25-microgram dose, a quarter of the adult dose. The trial was not large enough to determine how well the vaccine protects against hospitalization and death. The number of children who die of Covid is greater than from every other infectious disease. Whether parents of young children will get their young children vaccinated remains a question: for their older children, about a third of parents want their children vaccinated, about a third said they would wait and see, and about a third are hesitant or resistant to vaccination. On March 23rd, the federal program created to provide free Covid testing and treatment stopped accepting reimbursement claims from providers. Claims for reimbursement of free coronavirus vaccinations will not be accepted after today. The federal government was forced to shut down the program for lack of funding. Health centers which wish to continue to provide these serves to the uninsured will be forced to use other funds, e.g., by cutting back on programs for vision or dental services to the uninsured. The end of the federal uninsured program also puts at risk the Biden administration’s “test-to-treat” initiative, which would have provided free antiviral drugs to uninsured persons who test positive for Covid. On March 29th, the FDA approved second booster doses of the Pfizer and Moderna mRNA coronavirus vaccines for adults 50 years and older. Those who received these vaccines’ first booster dose at least four months ago can now get a fourth dose. The FDA also approved a second booster dose of the Pfizer vaccine for immunocompromised people 12 years and older, and a second booster dose of the Moderna vaccine for immunocompromised people 18 years and older. The CDC gave its recommendation of the second booster dose shortly after the FDA made its announcement. The $1.9 trillion pandemic stimulus package enacted in March 2021provided subsidies to help with out-of-pocket costs for Affordable Care Act coverage for low-income people. Without Congressional action to extend these subsidies, the subsidies could be lost in 2023, and 3.4 million Americans would lose marketplace ACA coverage and become uninsured, impairing their treatment for Covid disease and its complications. The international program called “Covax” was intended to ensure global vaccine equity. The program was meant to convince wealthy and poor countries to pool their money to order vaccines in advance and then share the vaccines in a way that would protect the world’s most vulnerable people first. However, wealthy countries bought vaccines for their own residents, a result that was not only inequitable, but has allowed new coronavirus variants to mutate. On April 4th, Congressional negotiators agreed to a deal for $10 billion in additional funding for the U.S. Covid response but they were unable to agree on $5 billion more for global coronavirus aid and therefore they dropped it from the agreement. This may permit the Covid pandemic to 2 continue largely unchecked throughout the developing world, enabling the coronavirus to mutate into new variants which may later endanger the U.S. According to a study of 181,000 Veterans Affairs patients, people who had Covid had a 46% higher risk of developing Type 2 diabetes than those who had not had Covid. Greater severity of Covid symptoms was associated with a higher chance of developing diabetes, but even people with less severe or even asymptomatic infection had an increased risk. A Cleveland Clinic study of 5,400 patients showed that persons with sleep apnea or other types of abnormal breathing while sleeping had a 31% higher rate of hospitalization or death from Covid. This risk is reduced by sleep apnea treatments such as having supplemental oxygen or continuous positive airway pressure while sleeping. The recently enacted omnibus spending package extended telehealth reimbursement by the Centers for Medicare and Medicaid Services until five months after the Covid public health emergency is declared over, delaying the cutoff of coverage of most virtual care by CMS. Medicare beneficiaries used telehealth 88 times more in 2020 – the first year of the pandemic – than in pre-pandemic 2019. On April 4th, the Biden administration terminated Title 42, effective May 23rd. Title 42 is a Trump-era CDC immigration policy that made it harder for migrants to seek asylum in the U.S. amid the ongoing Covid pandemic. The policy enabled U.S. border agents to expel asylumseekers to Mexico to prevent the spread of the coronavirus in the U.S. On April 4th, the CDC announced it was hiring a senior federal health official outside the agency to conduct a one-month review of the CDC’s structure, systems, and processes. The CDC has come under criticism for its performance leading the U.S. response to the Covid pandemic. CDC Director Rochelle Walensky said, “it is time to step back and strategically position CDC to support the future of public health” in the U.S. The CDC was slow to develop an effective Covid test; the Trump administration meddled in CDC’s directives; and under President Biden, the CDC’s guidance on masking, quarantine, and booster doses has been confusing. The Economy The U.S. economy created 431,000 jobs in March, reducing the unemployment rate to 3.6%, nearly where the country was before the pandemic started. However, inflation is at a 40-year high, jumping 6.4% in February 2022 compared to a year ago, with sharply higher prices for food, gasoline, and housing. Economist Paul Krugman recently reexamined the “Great Resignation” theory that says the U.S. workforce is 1.5 million workers below pre-pandemic levels because younger people don’t want to go back to work at jobs they don’t like, and many older people have taken early retirement rather than going back to work. Krugman says neither hypothesis is supported by data. In fact, younger workers are employed at near pre-pandemic rates, and most older people are still working. What has happened is that 600,000 more Americans are now self-employed since the pandemic began; they are not counted in employment statistics. And immigration fell sharply during the Trump years: many immigrants are working age and are highly motivated economically; their numbers are no longer in the workforce at pre-pandemic levels. 3 Krugman also believes inflation will get worse before it gets better. Russia’s invasion of Ukraine has increased the price of oil, gasoline, wheat, and other commodities. This inflation will reduce consumer spending on other things. The 0.25% interest rate increase announced by the Federal Reserve already has increased long-term mortgage rates significantly, which will slow down home buying and new home construction. The American Rescue Plan provided families with a one-time stimulus payment, enhanced unemployment benefits, and the child tax credit. This huge federal pandemic-relief spending has ended, not to be replaced. These factors together will slow the economy, increase unemployment, and reduce inflation. Despite U.S. sanctions, Russia has been able to defend the ruble, recovering almost all its losses that occurred since the invasion of Ukraine began nearly six weeks ago. Russia’s central bank raised the interest rate from 9.5% to 20% to induce people to keep their funds in Russia, and the country has imposed extensive controls to prevent capital flight out of Russia. However, according to Krugman, the measures taken to stabilize the ruble will deepen what is already looking like a depression-level slump in Russia’s real economy. However, for Russian President Putin, stabilizing the value of the ruble is a critically important political objective. Jeffrey Sonnenfeld of the Yale School of Management has been keeping track of the so-far nearly 500 companies that have pulled out of Russia or suspended operations there after Russia invaded Ukraine. First were the major oil companies British Petroleum, Shell, and Exxon. Then major consulting companies such as Bain & Company, B.C.G, and McKinsey & Company pulled out. Then major accounting firms and global law firms pulled out. Then big tech companies such as Dell, IBM, Apple, HP, Google, Meta, and Twitter suspended their operations there. Then major consumer brands like McDonald’s, Coca-Cola, and Starbucks announced their departures. However, a few U.S. companies, like Koch Industries, continue to do business in Russia. The economic sanctions imposed by the West in response to the military invasion of Ukraine will gradually and eventually devastate the Russian economy and have severe economic consequences for the Russian people. It also will cause countries around the world to rethink the geopolitical risks of globalization such as: offshoring their manufacturing jobs that must then rely on foreign supply chains; European dependence on Russian gas and oil; and the growing dependence of the U.S. economy on China. On March 31st, the Biden administration announced it was going to release one million barrels of oil per day from the nation’s strategic petroleum reserve for six months to reduce energy prices which have spiked since the Russian invasion of Ukraine. Oil prices fell modestly because this amount represents only 5% of American demand at a time when Russian oil exports are down about three million barrels a day. The U.S. strategic reserve holds about 600 million barrels, approximately a month of total American consumption. On April 5th, the Biden administration decided that millions of federal student loan borrowers will be allowed to freeze their payments until August 31st, the sixth such extension of a pandemic relief measure than began more than two years ago. Americans now owe $1.6 trillion on federal student loans – more than on car loans, credit cards, or any other consumer debt except home mortgages. 4 Law News Russia’s invasion of Ukraine – and NATO’s response – have dramatically increased the threat of Russian state-sponsored cybersecurity incidents, hacking, and information theft. This in turn has increased the probability of cybersecurity insurance coverage disputes. Insurers will seek to deny coverage for cyberattacks from Russia or Russian state-sponsored actors, citing force majeure, war, or other coverage exceptions. Businesses which think they have cybersecurity insurance coverage from these “political” risks, but don’t, can face huge financial exposure and will be greatly incentivized to litigate coverage disputes. On the other hand, M&A deal volume has diminished after a record year in 2021. Inflation, rising interest rates, stock market volatility, geopolitical turmoil with its new risks in crossborder transactions in Russia and China, and growing antitrust enforcement – all contribute to an atmosphere of uncertainty for law firms in the M&A market segment. Last year, there was a confluence of factors promoting M&A activity: a recovering global economy, broad availability of and access to capital, access to low-cost debt financing, and favorable government policies including government investments in hard infrastructure. Last year, the Federal Reserve also kept interest rates low, and the Fed and Congress pumped lots of money into the U.S. economy. This year, that tide is running out: M&A partners in law firms may see smaller draws than in 2021, and M&A associates may find themselves redundant. Litigation funding companies in the U.S. committed $2.8 billion toward new deals in 2021, an 11% increase from the prior year, due to increased interest from Big Law 200 firms which are now more comfortable dealing with third-party litigation financiers who earn a percentage of settlements or court awards in major civil litigation. The increased funding to Big Law 200 firms included “portfolio” deals which give law firms access to pools of money to back multiple lawsuits simultaneously. UAE and Saudi Arabia are attractive destinations for international law firms seeking to keep their Russian lawyers and staff employed and to refocus their business plans beyong Russia following their exit from that now-pariah country. Both UAE and Saudi Arabia are looking for Western-trained lawyers who can negotiate and navigate in international commerce. Saudi Arabia is letting in more Western-headquartered businesses and diversifying its economy. If international law firms do not move quickly especially into Dubai and Abu Dhabi, they may lose the talented Russian lawyers they trained and developed in their Russian operations. Coca-Cola proposed a diversity policy for outside law firms staffing legal work for the company. It was forced to pull back the requirement because it imposed an explicit race-based quota that may be unconstitutional among the majority on the current U.S. Supreme Court. This quandary highlights the issue of where to draw the line between permissible diversity initiatives and unlawful mandates in a legal profession that remains overwhelmingly White. • The policy was never implemented by Coca-Cola, but it had offered an example of a tangible corporate commitment to diversity because of the metrics it would have applied. Under the proposed policy, Black lawyers would have handled at least half of the billable time on 30% of new matters that the company’s outside counsel would have been forced to earmark for diverse attorneys. 5 • Coca-Cola had faced questions about the legality of earmarking billable time for Black lawyers while imposing financial penalties on law firms that didn’t comply. A case now before the Supreme Court over race-based admissions policies at Harvard College has given some companies pause before considering similar initiatives. There will be more legal work helping clients comply with Russian sanctions and defending those who don’t, because the U.S. Justice and Treasury Departments among other regulators are committed to finding and stopping companies and individuals from evading sanctions imposed against Russia dealings. On April 4th, the U.S. Supreme Court denied three petitions from Michigan, Oklahoma, and Texas challenging mandatory state bar association memberships (like the Utah State Bar), thereby preserving their existence in 31 states and D.C. On April 4th, the Senate Judiciary Committee deadlocked 11-to-11 along party lines on moving President Biden’s nomination of Ketanji Brown Jackson to the Senate floor for a final confirmation vote. Senate Democratic leader Charles Schumer is likely to seek passage of a procedural discharge resolution to get her nomination to the floor for a vote of the full Senate. The last time the Judiciary Committee deadlocked on a Supreme Court nomination was in 1991 when members voted 7-to-7 on nominee Clarence Thomas. Three Republican Senators – Susan Collins of Maine, Lisa Murkowski of Alaska, and Mitt Romney of Utah – have announced they will vote for Jackson’s confirmation. 6