vox--2020-03-13--Odd Job: Professional athletes have super-complicated tax returns. This guy can help.

Doing your taxes is frustrating , but doing your taxes when you ’ re accumulating paystubs in a variety of states , precincts , and countries can make an annoying process downright draconian .
Uncle Sam might not ask for anything more than a W-2 from Americans who only work for one company , but pro athletes rarely have that luxury .
John Karaffa saw this firsthand when he played professional basketball overseas for 12 seasons .
Between federal demands , regional idiosyncrasies , and international inconsistencies , sometimes an athlete ’ s tax return can be hundreds of pages @ @ @ @ @ @ @ return can be hundreds of pages deep So , in 2009 , Karaffa started ProSport CPA , an accounting firm that offers tax services and financial planning to athletes all over the world .
Today , he says the company works with almost 1,000 clients , including pros in every major sports league in America and the rest of the world .
Karaffa explains that ProSport understands the tax situations athletes might come across in the murky waters of contracts , royalties , and endorsement income .
But more than that , he @ @ @ @ @ @ @ an industry that eats its young .
( For example , Karaffa advises against opening a restaurant while you ’ re on your first contract . )
A major part of Karaffa ’ s business is the so-called “ jock tax.
” During the 1991 NBA Finals , California instituted a tax on the money that Chicago Bulls players earned while they were in the state to play the Los Angeles Lakers .
This created a snowball effect , and today nearly every state — except for Florida , Washington , Texas , @ @ @ @ @ @ @ tax on visiting players .
Over the course of an NBA season , a player might visit 20 different states , which means that they ’ ll need to file returns in each of them .
That is a difficult thing to accomplish without the help of a company like ProSport , which has a deep understanding of every state ’ s tax code .
We talked about that , as well as how ProSport recruits new clients , and the rude awakening young players often have when the taxman comes knocking in @ @ @ @ @ @ @ career before you got into the tax business .
What was that like ?
I had played basketball and majored in accounting at Butler University , who had a well-known and fantastic program .
I had job offers in Indianapolis during my senior year to start with any of several accounting firms but chose instead to play basketball professionally overseas .
I started in Germany , ended up playing there for 11 seasons , and one season in New Zealand .
I never thought I ’ d stay in one place that long @ @ @ @ @ @ @ to bounce around a few places .
Once I got to Germany , I was getting bored during the day , since our practices were evenings and games were primarily on weekends , so after a month or so , I decided to research the accounting firms in Frankfurt , Germany , near where I lived .
I felt compelled to put my degree to use and start getting experience so I could sit for the Certified Public Accountant ( CPA ) exam .
I was also taking college courses through correspondence school @ @ @ @ @ @ @ education opportunities back then .
I think my primary motivation was to keep advancing in my professional career because I didn ’ t want to get back to the US after my playing career and have to start over .
Having dual careers suited me well , I was not one to sit around and not do anything .
What I ended up doing is I decided to stay [ overseas ] year-round and worked with one of the big four accounting firms .
I started with PricewaterhouseCoopers .
I kind of had @ @ @ @ @ @ @ knew that basketball was No .
1 .
They were really flexible with me .
I was able to do both .
I did that pretty much the whole time I was over there .
So I imagine during that time you got a pretty intimate perspective on how complicated taxes can be for pro athletes .
What about that experience made you want to explore that niche as an accountant ?
I definitely saw how complicated it was , especially the year I played in [ both ] Germany and New Zealand @ @ @ @ @ @ @ returns that I had to deal with !
The complexity of that , it was very clear to me that you had to be a specialist .
That is a very difficult niche in its own right : expatriate taxation and international taxation .
Let alone all the idiosyncrasies with sports entertainment .
I transferred back to the US at the end of my stint in Germany .
At that point I ’ d been in the tax industry for 20 years .
[ Athletes ] felt they were underserved from the tax @ @ @ @ @ @ @ those [ accountants ] are starstruck or just not really able to relate to athletes .
Putting it all together , it just felt natural for me .
Obviously I have a lot of experience .
I ’ ve seen pretty much everything in the tax world .
Today ProSport CPA is serving almost 1,000 clients .
We understand athlete ’ s taxes .
It ’ s more complicated than 99 percent of the people in the US .
You have to find all these different jurisdictions .
It can be mind-boggling .
@ @ @ @ @ @ @ pretty quickly when I explain the situation and handle it for them .
I ’ ve got a team of 20 people here and this is all we do .
Let ’ s talk about some of the unique circumstances that athletes find during tax season .
The big one obviously , is the “ jock tax , ” which requires athletes to file returns in every state they play in over the course of a season .
What ’ s that like ?
First off , the federal return is hard enough @ @ @ @ @ @ @ sections of the code and different types of ways that athletes earn money .
You ’ ve got wage income , but then you also have endorsement income , you can have royalty income , different kinds of investments .
There ’ s legal structures around that .
That all has to be navigated on the federal side .
From the state side , everybody ’ s situation is different .
It depends on what somebody ’ s home state is , where they ’ re going to reside , and what team @ @ @ @ @ @ @ Those could all be different places .
With the way that the season works , you ’ re employed by a team in a particular jurisdiction .
They ’ re going to be withholding , say , taxes from that jurisdiction , if there is a state tax .
Then based on the activity that the individual has — the games in the season , but also the pre-season training camp , because NFL teams often have pre-season training camps outside of their state — depending on where they ’ re performing their @ @ @ @ @ @ @ allocated to various different jurisdictions .
Most of the states , and even some of the cities , have income tax .
I think last year , the most we had to file for somebody was 26 different jurisdictions in one year .
That ’ s 26 different tax returns .
We ’ re talking 200 pages .
It ’ s a ream of paper .
California started [ the jock tax ] because they were looking for extra revenue sources .
They figured athletes are easy pickings because they can look up @ @ @ @ @ @ @ at the schedule , and then they can make a calculation .
“ I reviewed this guy and he had to earn a million here , so let ’ s tax him on the million.
” It ’ s a money grab .
You ’ ve said in the past that taxes are a pro athlete ’ s biggest expense .
Is that ever a rude awakening for a rookie ?
“ For most of us , as our careers progress we earn more and more .
It ’ s flipped on athletes.
@ @ @ @ @ @ @ the first paycheck .
Let ’ s say they ’ re getting a million dollar signing bonus .
The financial adviser , the agent , explains , “ You ’ re not gon na get a million in the check.
” The number might even start with a four .
That ’ s really where athletes realize that taxes are so high .
When they see the paychecks , they see the withholding that ’ s happening with all these different jurisdictions , they start looking us up .
For most of us @ @ @ @ @ @ @ more and more .
But at the beginning of our professional lives it ’ s not a big sum , so the mistakes that we make aren ’ t as tragic .
It ’ s flipped on athletes .
At the beginning of their careers , when they ’ ve done the least , they ’ re just really thrown in the fire .
There ’ s a ton of stuff going .
There ’ s a ton of life events that are also happening simultaneously : picking up and moving , their @ @ @ @ @ @ @ a city which you have no control over , especially with the draft .
Taxes rank up there with those changes , because it ’ s the biggest expense .
What other unique tax situations can an athlete find ?
Are they able to write off their training or fitness regimens ?
Well , the tax laws have changed in that regard .
Most of that would be able to be written off up until the end of 2017 .
The tax laws changed at the beginning of 2018 , where the employee @ @ @ @ @ @ @ the code .
In theory , many of those expenses are no longer deductible .
It ’ s actually a paradox ; some states don ’ t agree with all of the federal law changes .
Some of the states still allow those deductions but the federal doesn ’ t .
So , if an NFL kicker goes to a specialized kicker camp , that was absolutely to improve his chance to make a team .
Hiring a trainer , working on the body helps to get ready for the job , in @ @ @ @ @ @ @ go get continuing education .
The Trump tax bill took away a lot of those deductions , but it also lowered the top tax rate by almost 3 percent .
What are some of the other unique circumstances that you typically find when you ’ re doing a pro athlete ’ s taxes ?
It ’ s a lot of moving parts .
We have dealings directly with the professional athletes that we ’ re serving , but in a lot of cases , sometimes we ’ re getting all the information from @ @ @ @ @ @ @ financial adviser , a business manager , personal assistant , a team .
There ’ s a lot of people that we have to go to because pro athletes have crazy travel schedules .
You look at an NBA schedule , in one particular week they could be on six flights .
They ’ re always on the road .
It ’ s really hard to get things done for them during the season , so they have to rely on other people to help them .
You told me you ’ ve @ @ @ @ @ @ @ disaster .
What kinds of disasters were you able to recognize before they hit ?
“ You look at an NBA schedule , in one particular week they could be on six flights ” Usually the things that we ’ re correcting are when someone has already passed through the books : a nonprofessional , or somebody who maybe could be a great CPA but has no idea how to handle other state tax returns outside their own state , or [ someone ] who doesn ’ t know how to handle the @ @ @ @ @ @ @ of sports entertainment .
We can very quickly identify if somebody was being served by an accountant that really had no business working with them .
We do a lot of amendment tax returns , usually getting people money back because they missed opportunities .
That ’ s probably the most common thing that we ’ re catching .
Do you actively recruit athletes ?
How do you find new clients ?
Our biggest advocates are the athletes we serve .
A lot of the veteran players , the team captains , they @ @ @ @ @ @ @ .
These guys have been around the block .
They know what they ’ re doing .
They ’ re legit.
” Then when those people start comparing notes and talking with other teammates , and hopefully get referrals from multiple different angles , then they ’ re like , “ Yeah , these guys must be legit if my agent is saying they ’ re good , and my financial adviser is saying they ’ re good .
They ’ ve got a whole bunch of guys in the locker room .
@ @ @ @ @ @ @ are if they weren ’ t doing a good job.
” We ’ re very , very blessed to have a lot of good people that we ’ ve worked with that also spread the news , because these guys don ’ t want their rookies getting preyed on .
It ’ s funny to think that even in a business as glamorous as pro sports , that core office dynamic of recommending an accountant to a coworker still exists .
You hit the nail on the head .
Athletes have so many @ @ @ @ @ @ @ people around them are just trying to get something from them .
They have to be leery .
It does come down to the locker room , or on the field , or having dinner at the Chipotle after practice , the guys compare notes .
That absolutely happens quite a bit .
Sign up for The Goods ’ newsletter .
Twice a week , we ’ ll send you the best Goods stories exploring what we buy , why we buy it , and why it matters .

Doing your taxes is frustrating, but doing your taxes when you’re accumulating paystubs in a variety of states, precincts, and countries can make an annoying process downright draconian. Uncle Sam might not ask for anything more than a W-2 from Americans who only work for one company, but pro athletes rarely have that luxury. John Karaffa saw this firsthand when he played professional basketball overseas for 12 seasons. Between federal demands, regional idiosyncrasies, and international inconsistencies, sometimes an athlete’s tax return can be hundreds of pages deep.
An athlete’s tax return can be hundreds of pages deep
So, in 2009, Karaffa started ProSport CPA, an accounting firm that offers tax services and financial planning to athletes all over the world. Today, he says the company works with almost 1,000 clients, including pros in every major sports league in America and the rest of the world. Karaffa explains that ProSport understands the tax situations athletes might come across in the murky waters of contracts, royalties, and endorsement income. But more than that, he hopes to be a steadying presence in an industry that eats its young. (For example, Karaffa advises against opening a restaurant while you’re on your first contract.)
A major part of Karaffa’s business is the so-called “jock tax.” During the 1991 NBA Finals, California instituted a tax on the money that Chicago Bulls players earned while they were in the state to play the Los Angeles Lakers. This created a snowball effect, and today nearly every state — except for Florida, Washington, Texas, and Washington, DC — enforces a tax on visiting players. Over the course of an NBA season, a player might visit 20 different states, which means that they’ll need to file returns in each of them. That is a difficult thing to accomplish without the help of a company like ProSport, which has a deep understanding of every state’s tax code. We talked about that, as well as how ProSport recruits new clients, and the rude awakening young players often have when the taxman comes knocking in April.
So you had an athletic career before you got into the tax business. What was that like?
I had played basketball and majored in accounting at Butler University, who had a well-known and fantastic program. I had job offers in Indianapolis during my senior year to start with any of several accounting firms but chose instead to play basketball professionally overseas. I started in Germany, ended up playing there for 11 seasons, and one season in New Zealand. I never thought I’d stay in one place that long. I figured I was just going to bounce around a few places.
Once I got to Germany, I was getting bored during the day, since our practices were evenings and games were primarily on weekends, so after a month or so, I decided to research the accounting firms in Frankfurt, Germany, near where I lived. I felt compelled to put my degree to use and start getting experience so I could sit for the Certified Public Accountant (CPA) exam. I was also taking college courses through correspondence school — there weren’t any online education opportunities back then. I think my primary motivation was to keep advancing in my professional career because I didn’t want to get back to the US after my playing career and have to start over. Having dual careers suited me well, I was not one to sit around and not do anything.
What I ended up doing is I decided to stay [overseas] year-round and worked with one of the big four accounting firms. I started with PricewaterhouseCoopers. I kind of had both careers going, and the firms knew that basketball was No. 1. They were really flexible with me. I was able to do both. I did that pretty much the whole time I was over there.
So I imagine during that time you got a pretty intimate perspective on how complicated taxes can be for pro athletes. What about that experience made you want to explore that niche as an accountant?
I definitely saw how complicated it was, especially the year I played in [both] Germany and New Zealand. I had three countries’ tax returns that I had to deal with! The complexity of that, it was very clear to me that you had to be a specialist. That is a very difficult niche in its own right: expatriate taxation and international taxation. Let alone all the idiosyncrasies with sports entertainment.
I transferred back to the US at the end of my stint in Germany. At that point I’d been in the tax industry for 20 years. [Athletes] felt they were underserved from the tax side of things. A lot of those [accountants] are starstruck or just not really able to relate to athletes. Putting it all together, it just felt natural for me. Obviously I have a lot of experience. I’ve seen pretty much everything in the tax world.
Today ProSport CPA is serving almost 1,000 clients. We understand athlete’s taxes. It’s more complicated than 99 percent of the people in the US. You have to find all these different jurisdictions. It can be mind-boggling. I can put a guy at ease pretty quickly when I explain the situation and handle it for them. I’ve got a team of 20 people here and this is all we do.
Let’s talk about some of the unique circumstances that athletes find during tax season. The big one obviously, is the “jock tax,” which requires athletes to file returns in every state they play in over the course of a season. What’s that like?
First off, the federal return is hard enough because there are a lot of different sections of the code and different types of ways that athletes earn money. You’ve got wage income, but then you also have endorsement income, you can have royalty income, different kinds of investments. There’s legal structures around that. That all has to be navigated on the federal side.
From the state side, everybody’s situation is different. It depends on what somebody’s home state is, where they’re going to reside, and what team is going to be employing them. Those could all be different places. With the way that the season works, you’re employed by a team in a particular jurisdiction. They’re going to be withholding, say, taxes from that jurisdiction, if there is a state tax.
Then based on the activity that the individual has — the games in the season, but also the pre-season training camp, because NFL teams often have pre-season training camps outside of their state — depending on where they’re performing their duties, income is going to be allocated to various different jurisdictions. Most of the states, and even some of the cities, have income tax. I think last year, the most we had to file for somebody was 26 different jurisdictions in one year. That’s 26 different tax returns. We’re talking 200 pages. It’s a ream of paper.
California started [the jock tax] because they were looking for extra revenue sources. They figured athletes are easy pickings because they can look up their salary online, they can look at the schedule, and then they can make a calculation. “I reviewed this guy and he had to earn a million here, so let’s tax him on the million.” It’s a money grab.
You’ve said in the past that taxes are a pro athlete’s biggest expense. Is that ever a rude awakening for a rookie?
“For most of us, as our careers progress we earn more and more. It’s flipped on athletes.”
I think the rude awakening is the first paycheck. Let’s say they’re getting a million dollar signing bonus. The financial adviser, the agent, explains, “You’re not gonna get a million in the check.” The number might even start with a four. That’s really where athletes realize that taxes are so high. When they see the paychecks, they see the withholding that’s happening with all these different jurisdictions, they start looking us up.
For most of us, as our careers progress we earn more and more. But at the beginning of our professional lives it’s not a big sum, so the mistakes that we make aren’t as tragic. It’s flipped on athletes. At the beginning of their careers, when they’ve done the least, they’re just really thrown in the fire. There’s a ton of stuff going. There’s a ton of life events that are also happening simultaneously: picking up and moving, their first job, and getting acclimated to a city which you have no control over, especially with the draft. Taxes rank up there with those changes, because it’s the biggest expense.
What other unique tax situations can an athlete find? Are they able to write off their training or fitness regimens?
Well, the tax laws have changed in that regard. Most of that would be able to be written off up until the end of 2017. The tax laws changed at the beginning of 2018, where the employee business expenses actually just got removed from the code. In theory, many of those expenses are no longer deductible.
It’s actually a paradox; some states don’t agree with all of the federal law changes. Some of the states still allow those deductions but the federal doesn’t. So, if an NFL kicker goes to a specialized kicker camp, that was absolutely to improve his chance to make a team. Hiring a trainer, working on the body helps to get ready for the job, in the same way that an accountant would go get continuing education. The Trump tax bill took away a lot of those deductions, but it also lowered the top tax rate by almost 3 percent.
What are some of the other unique circumstances that you typically find when you’re doing a pro athlete’s taxes?
It’s a lot of moving parts. We have dealings directly with the professional athletes that we’re serving, but in a lot of cases, sometimes we’re getting all the information from everywhere else. The agent, the financial adviser, a business manager, personal assistant, a team. There’s a lot of people that we have to go to because pro athletes have crazy travel schedules. You look at an NBA schedule, in one particular week they could be on six flights. They’re always on the road. It’s really hard to get things done for them during the season, so they have to rely on other people to help them.
You told me you’ve occasionally helped some athletes avoid a tax disaster. What kinds of disasters were you able to recognize before they hit?
“You look at an NBA schedule, in one particular week they could be on six flights”
Usually the things that we’re correcting are when someone has already passed through the books: a nonprofessional, or somebody who maybe could be a great CPA but has no idea how to handle other state tax returns outside their own state, or [someone] who doesn’t know how to handle the niche of international taxation or the niche of sports entertainment. We can very quickly identify if somebody was being served by an accountant that really had no business working with them. We do a lot of amendment tax returns, usually getting people money back because they missed opportunities. That’s probably the most common thing that we’re catching.
Do you actively recruit athletes? How do you find new clients?
Our biggest advocates are the athletes we serve. A lot of the veteran players, the team captains, they’re saying, “Oh yeah. These guys have been around the block. They know what they’re doing. They’re legit.”
Then when those people start comparing notes and talking with other teammates, and hopefully get referrals from multiple different angles, then they’re like, “Yeah, these guys must be legit if my agent is saying they’re good, and my financial adviser is saying they’re good. They’ve got a whole bunch of guys in the locker room. They wouldn’t be where they are if they weren’t doing a good job.” We’re very, very blessed to have a lot of good people that we’ve worked with that also spread the news, because these guys don’t want their rookies getting preyed on.
It’s funny to think that even in a business as glamorous as pro sports, that core office dynamic of recommending an accountant to a coworker still exists.
You hit the nail on the head. Athletes have so many people around them. A lot of people around them are just trying to get something from them. They have to be leery. It does come down to the locker room, or on the field, or having dinner at the Chipotle after practice, the guys compare notes. That absolutely happens quite a bit.
Sign up for The Goods’ newsletter. Twice a week, we’ll send you the best Goods stories exploring what we buy, why we buy it, and why it matters.


vox--2020-03-12--Disney World and Disneyland are closing amid Covid-19 fears

When a pandemic sweeps the globe , making large gatherings of people incredibly dangerous , how does the Walt Disney Company respond ?
At first , with copious amounts of Purell , but as of March 12 , the operators of the world ’ s largest theme parks announced that California ’ s Disneyland would close for only the fourth time since it opened in 1955 ; the park will be shuttered March 14 through the end of the month .
A few hours later , The Walt Disney Company confirmed it would be also closing Walt Disney World Resort @ @ @ @ @ @ @ rest of the month starting Monday , March 16th , marking the first time in history all six Disney theme park resorts would be closed simultaneously .
Earlier in the day , California Gov .
Gavin Newsom announced that Disneyland was exempt from a general order limiting groups of 250 or more people , citing the situation as “ complex ” and “ unique.
” However , by early afternoon , the company issued a statement saying : “ We are proceeding with the closure of Disneyland Park ... beginning the morning of @ @ @ @ @ @ @ month ” The company closed Shanghai Disneyland and Hong Kong Disneyland in succession on January 25 and 26 to contain the spread of Covid-19 , as the danger of the virus and the disease it causes quickly became clear , and both have remained closed since .
However , Shanghai ’ s Disneytown , the outdoor mall attached to the park , began welcoming guests this week — 45 days into the closures — in what could be an optimistic sign .
As “ the first step of a phased reopening , ” @ @ @ @ @ @ @ is allowing guests to visit specific locations after undergoing temperature screenings , requiring them to wear masks throughout and present health records when entering a dining area .
But , even as promotional videos of furry characters play on social media , the rides stand still .
When Japanese Prime Minister Abe Shinzo requested to postpone large gatherings for two weeks last month , Tokyo Disney Resort announced it would close temporarily starting February 29 .
This past Monday , March 9 , the park extended that closure through early April — pushing @ @ @ @ @ @ @ the Beast ride and Fantasyland expansion at least one month later than intended .
Its hotels remain open but with limited services , as character dining with Mickey Mouse and gift shops remain closed and buffets have been amended to table-service dining .
Tokyo Disneyland and Tokyo DisneySea — a locale that many theme park aficionados consider the holy grail — closed for 34 and 47 days , respectively , following the 2011 Tōhoku tsunami and earthquake , a threshold that could be exceeded if the closure lasts past April 15 .
A @ @ @ @ @ @ @ announced , but Universal Studios Japan , located a few hours away in Osaka , has extended through March 22 with the possibility of being pushed further , a far shorter window than Disney ’ s park .
Disneyland Paris , the most-visited location in France , remained open for days after three employees tested positive for coronavirus .
The staff worked “ backstage , ” the company term for not guest-facing , and were not confirmed not to have had contact with guests , according to the Financial Times .
The Paris @ @ @ @ @ @ @ on Thursday , temporarily suspending parades and a large portion of its in-park entertainment through mid-April , and limiting capacity within lines , theaters , and larger indoor restaurants .
Disneyland Paris also restricted face-to-face contact with Disney princesses , shuttering their meet-and-greet location in favor of a parade-style cavalcade hours before announcing the park would be closed for the rest of March .
With the entirety of The Walt Disney Company ’ s theme park portfolio experiencing closures — parks in the US and France through the end of March ; in @ @ @ @ @ @ @ indefinitely — it ’ s worth noting that the domestic resorts are closer to home in ways less obvious , too .
Hong Kong Disneyland Resort and Shanghai Disney Resort both serve as a joint venture between the Walt Disney Company and local government — which owns the majority share — while Tokyo Disney Resort is overseen by the Oriental Land Company , a Japanese business that owns and operates the resort .
Disneyland and Walt Disney World , however , are singularly owned .
( The Walt Disney Company also regained ownership @ @ @ @ @ @ @ ) For a fantasy-filled destination whose brand is “ the happiest place on earth ” — open 365 days a year , come Floridian rain or humid shine , on all major holidays — it ’ s an unprecedented occurrence .
Historically , Disney World and Disneyland have only closed for impending natural disasters or in the wake of a national tragedy ( like 9/11 or JFK ’ s death ) ; while other businesses may close up shop for Christmas and New Year ’ s Eve , here , it ’ s @ @ @ @ @ @ @ ( It ’ s worth noting that both of Disney ’ s Chinese theme parks closed days before Lunar New Year — which typically sees a boom in park attendance . )
As of March 12 , the Florida theme park resort was still functioning normally , with lengthy lines for roller coasters , increased cleaning of high-touch surfaces , and recommended hand-washing procedures amid the pandemic .
These precautions will remain in place until the March 16 closure ; the California park will also use these same precautions until it closes on @ @ @ @ @ @ @ were placed in key locations throughout Disney World , and earlier this week , the park added mobile hand-washing stations .
( A thing to remember : The viral video of that kid licking a pole ?
It was taken inside Magic Kingdom ’ s Tomorrowland . )
Antibacterial hand gel dispensers had been placed in key locations throughout Walt Disney World Disney Cruise Line — yes , the mouse has his own fleet — will suspend departures starting this March 14 through the end of the month .
As of March 12 @ @ @ @ @ @ @ with enhanced measures despite warnings from the Centers for Disease Control and Prevention .
No guest or crew member who has traveled from , to , or through China , South Korea , Iran , Italy , or Japan or has had contact with anyone from those regions , including connecting flights , was previously allowed to board .
Up until the closures , crowds didn ’ t seem to have taken too much of a downturn .
According to guests of the Florida resort , and per attraction wait times , there @ @ @ @ @ @ @ parks — likely a result of Disney ’ s new Star Wars attraction that requires a first-come , first-served “ boarding pass ” to ride , and its first Mickey Mouse ride , which opened just last week .
The New York Times reported that Disney-affiliated companies had seen “ business as usual , ” with one park-goer saying , “ If I ’ m going to get sick and die , I might as well do it at Disney World.
” While parks in the U.S. and France are closed later this @ @ @ @ @ @ @ shopping , and entertainment districts — Downtown Disney at Disneyland Resort , Disney Springs at Walt Disney World , and Disney Village at Disneyland Paris — will remain open .
Hotels at Walt Disney World and Disneyland Paris will also remain open .
Disneyland Resort will temporarily shutter its three on-site hotels through March .
Hours before the announced closures , Walt Disney World Resort began offering temporary adjustments to package deals , waiving the $ 50 change fee for guests who have purchased theme park admission and a hotel room as a @ @ @ @ @ @ @ Disneyland guests , the company pledged in its statement to work with guests “ who wish to change or cancel their visits , and will provide refunds to those who have hotel bookings during this closure period.
” With travel increasingly discouraged , and more and more reactions and shutdowns from the entertainment industry , Walt Disney World and Disneyland Paris are expected to make similar accommodations soon .
Disney Parks are , after all , an escape , but the severity of the pandemic continues to grow .
Updated with a statement @ @ @ @ @ @ @ and news of additional Disney park closures .
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When a pandemic sweeps the globe, making large gatherings of people incredibly dangerous, how does the Walt Disney Company respond? At first, with copious amounts of Purell, but the operators of the world’s largest theme parks announced on March 12 that California’s Disneyland would close for only the fourth time since it opened in 1955. The Walt Disney Company soon confirmed it would be also closing Walt Disney World Resort in Florida and Disneyland Paris on March 16, marking the first time in history all six Disney theme park resorts would be closed simultaneously.
On March 27, the Walt Disney Company announced that US parks would remain closed indefinitely, and that park employees — known as cast members — would be paid through April 18, saying in a statement:
While there is still much uncertainty with respect to the impacts of COVID-19, the safety and well-being of our guests and employees remains The Walt Disney Company’s top priority. As a result of this unprecedented pandemic and in line with direction provided by health experts and government officials, Disneyland Resort and Walt Disney World Resort will remain closed until further notice. The Walt Disney Company has been paying its cast members since the closure of the parks, and in light of this ongoing and increasingly complex crisis, we have made the decision to extend paying hourly parks and resorts cast members through April 18.
The earliest available reservation at Walt Disney World or Disneyland Resort is June 1. When the pandemic was declared, just the parks were intended to close. But the Walt Disney Company soon announced it would temporarily shutter all of its Walt Disney World hotels on March 20. (Disney’s Vero Beach Resort and Disney’s Hilton Head Island Resort closed on March 20 and Aulani, a Disney Resort in Hawaii, closed on March 24; both now remain shuttered until further notice.)
Disney-owned “malls” — Downtown Disney at Disneyland and Disney Springs at Walt Disney World Resort — were at first set to stay open following the park closures, but closed March 17; third-party-owned locations were initially able to make their own decisions, but some locations, like José Andrés’ Jaleo at Disney Springs, announced closures until further notice. The entirety of both malls is now closed for the time being.
Before Disneyland’s historic announcement came, California Gov. Gavin Newsom announced that Disneyland was exempt from a general order limiting groups of 250 or more people, citing the situation as “complex” and “unique.” However, by early afternoon, the company issued a statement saying:
While there have been no reported cases of COVID-19 at Disneyland Resort, after carefully reviewing the guidelines of the Governor of California’s executive order and in the best interest of our guests and employees, we are proceeding with the closure of Disneyland Park and Disney California Adventure Park, beginning the morning of March 14 through the end of the month.
“Disneyland Resort and Walt Disney World Resort will remain closed until further notice”
Gov. Newsom’s office also issued a statement, saying:
Late last night, California put out a new policy on mass gatherings and engaged in deep conversations with Disney and other companies about how to meet it. Using that policy, Disney made the right call in the interest of public health and agreed to shut down their California parks. Expect more announcements like this shortly.
The company closed Shanghai Disneyland and Hong Kong Disneyland in succession on January 25 and 26 to contain the spread of Covid-19, as the danger of the virus and the disease it causes quickly became clear, and both have remained closed since. However, Shanghai’s Disneytown, the outdoor mall attached to the park, began welcoming guests 45 days into the closures in what could be an optimistic sign. As “the first step of a phased reopening,” as reported by CNN, the mall is allowing guests to visit specific locations after undergoing temperature screenings, requiring them to wear masks throughout and present health records when entering a dining area. But even as promotional videos of furry characters play on social media, the rides stand still.
When Japanese Prime Minister Abe Shinzo requested to postpone large gatherings for two weeks in February, Tokyo Disney Resort announced it would close temporarily. The park extended that closure through part of April — pushing the opening of its new Beauty and the Beast ride and Fantasyland expansion at least one month later than intended. Its hotels remain open but with limited services, as character dining with Mickey Mouse and gift shops remain closed and buffets have been amended to table-service dining. Now, according to TDR Explorer, the entirety of Tokyo Disney Resort including hotels will close until at least April 20, with its Fantasyland opening pushed to mid-May at the earliest.
Tokyo Disneyland and Tokyo DisneySea — a locale that many theme park aficionados consider the holy grail — closed for 34 and 47 days, respectively, following the 2011 Tōhoku tsunami and earthquake, a threshold that will now be exceeded, even if the park opens by April 20. A new opening date has not yet been announced for Universal Studios Japan, located a few hours away in Osaka, whose closure has been extended to April 12, with the likelihood of being pushed further.
Disneyland Paris, the most-visited location in France, remained open for days after three employees tested positive for the coronavirus. The staff worked “backstage,” the company term for not guest-facing, and were not confirmed not to have had contact with guests, according to the Financial Times.
The Paris park first announced newly enhanced safety protocols, temporarily suspending parades and a large portion of its in-park entertainment through mid-April, and limiting capacity within lines, theaters, and larger indoor restaurants. Disneyland Paris also restricted face-to-face contact with Disney princesses, shuttering their meet-and-greet location in favor of a parade-style cavalcade hours before announcing the park would be closed for the rest of March. Disneyland Paris then closed Disney Village and hotels as its current guests departed; as of March 30, the entire resort will be closed indefinitely.
With the entirety of the Walt Disney Company’s theme park portfolio experiencing closures — parks in France, China, and the US indefinitely and in Japan through mid-April — it’s worth noting that different locations have varied ownership, which could factor into when they reopen. Hong Kong Disneyland Resort and Shanghai Disney Resort both serve as a joint venture between the Walt Disney Company and the local government — which owns the majority share — while Tokyo Disney Resort is overseen by the Oriental Land Company, a Japanese business that owns and operates the resort. Disneyland and Walt Disney World, however, are singularly owned. (The Walt Disney Company also regained ownership of Disneyland Paris back in 2017.)
For a fantasy-filled destination whose brand is “the happiest place on earth” — open 365 days a year, come Floridian rain or humid shine, on all major holidays — it’s an unprecedented occurrence. Historically, Disney World and Disneyland have only closed for impending natural disasters or in the wake of a national tragedy (like 9/11 or JFK’s death); while other businesses may close up shop for Christmas and New Year’s Eve, here, it’s the busiest days of the year. (It’s worth noting that both of Disney’s Chinese theme parks closed days before Lunar New Year — which typically sees a boom in park attendance.)
Early in March, the Florida theme park resort was still functioning normally, with lengthy lines for roller coasters, increased cleaning of high-touch surfaces, and recommended hand-washing procedures amid the pandemic. These precautions remained in place through the March 16 closure; the California park also used these same precautions until it closed on March 14. Antibacterial hand gel dispensers were placed in key locations throughout Disney World, and the park added mobile hand-washing stations. (A thing to remember: The viral video of that kid licking a pole? It was taken inside Magic Kingdom’s Tomorrowland.)
Antibacterial hand gel dispensers had been placed in key locations throughout Walt Disney World
Disney Cruise Line — yes, the mouse has his own fleet — suspended departures starting March 14 through the end of the month. Now, all departures through April 28 have been canceled. Until March 12, the cruise line remained in service with enhanced measures despite warnings from the Centers for Disease Control and Prevention. No guest or crew member who had traveled from, to, or through China, South Korea, Iran, Italy, or Japan or has had contact with anyone from those regions, including connecting flights, was previously allowed to board.
Up until the closures, crowds didn’t seem to have taken much of a downturn. According to guests of the Florida resort, and per attraction wait times, there were still plenty of people in the parks — likely a result of Disney’s new Star Wars attraction that requires a first-come, first-served “boarding pass” to ride, and its first Mickey Mouse ride, which opened just last week. The New York Times reported that Disney-affiliated companies had seen “business as usual,” with one park-goer saying, “If I’m going to get sick and die, I might as well do it at Disney World.”
Disney stores throughout the country closed as well starting March 17.
An email was sent out to members of the Disney College Program that their program was being suspended starting March 16 and participants would need to travel home nearly immediately before housing closes on March 18.
Hours before the announced park closures, Walt Disney World Resort began offering temporary adjustments to package deals, waiving the $50 change fee for guests who have purchased theme park admission and a hotel room as a bundle directly from the company.
The Walt Disney Company is working with guests to refund or reschedule their travel plans due to closures. Annual passholders for Disneyland and Walt Disney World theme parks will have their dates extended as well.
Disney Parks are, after all, an escape, but the severity of the pandemic continues to grow.
Update, March 31: Updated throughout to reflect closure statuses.
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vox--2020-03-12--Disney delays Mulan due to coronavirus

Disney delays Mulan due to coronavirus

Disney is postponing the highly anticipated live-action remake of Mulan in the wake of growing concerns about the novel coronavirus .
Disney not only delayed Mulan , which would have been released March 27 , but also two other upcoming films : the teen X-Men movie New Mutants ( previously scheduled for April 3 ) , and the horror film Antlers , which Disney acquired when it acquired Fox Searchlight ( previously scheduled for April 17 ) .
New release dates for the films have not yet been announced .
“ As you know , this has been a rapidly @ @ @ @ @ @ @ stated in a March 12 press email .
“ We are postponing the releases of Mulan , New Mutants , and Antlers out of an abundance of caution.
” Press screenings of Mulan have been delayed until further notice , and some premieres for the film were also unscheduled in Europe and China , where theaters have already been closed for over a month .
Disney has slowly begun to shut down some of its theme park attractions as well .
The company had already shut down two theme parks in Shanghai and @ @ @ @ @ @ @ Asia was hit hardest by the virus .
As it spread , Disney closed more parks in Japan .
On March 12 , despite an earlier statement from California governor Gavin Newsom exempting Disney from a general ban on crowd gatherings throughout the state , the company announced that it would close its Anaheim , California-based theme park Disneyland indefinitely as well .
The shutdown marks just the third time in its history the Anaheim theme park has gone dark .
A few hours after the first March 12 announcement , the company @ @ @ @ @ @ @ and other Disney-owned theme parks in Orlando would be closing as well .
Disneyland Paris , where three staff members tested positive for coronavirus , will also be closing .
The back-and-forth over the theme parks illustrates just how rapidly and uncertainly the situation surrounding Disney ’ s properties has unfolded .
As of Thursday morning , premieres for Mulan were scheduled to move ahead with merely a “ downscaling ” of plans .
With a $ 200 million production budget , Mulan has been one of the buzzier recent Disney films .
@ @ @ @ @ @ @ ’ t catch a break : The film had already spent years weathering delays due to development and acquisition setbacks prior to its now-postponed April 3 release date — including five release delays .
Now , make that an even six .
Disney ’ s decision to cancel the films could have repercussions for the wider entertainment industry .
The question of whether or not to force movie theaters to close due to Covid-19 is a polarizing one for Americans — but with one less film juggernaut to draw them to the box @ @ @ @ @ @ @ gotten a little easier .

Disney is postponing the highly anticipated live-action remake of Mulan in the wake of growing concerns about the novel coronavirus.
Disney not only delayed Mulan, which would have been released March 27, but also two other upcoming films: the teen X-Men movie New Mutants (previously scheduled for April 3), and the horror film Antlers, which Disney acquired when it acquired Fox Searchlight (previously scheduled for April 17). New release dates for the films have not yet been announced.
“As you know, this has been a rapidly evolving situation,” a Disney spokesperson stated in a March 12 press email. “We are postponing the releases of Mulan, New Mutants, and Antlers out of an abundance of caution.”
Press screenings of Mulan have been delayed until further notice, and some premieres for the film were also unscheduled in Europe and China, where theaters have already been closed for over a month.
Related How the coronavirus outbreak is roiling the film and entertainment industries
Disney has slowly begun to shut down some of its theme park attractions as well. The company had already shut down two theme parks in Shanghai and Hong Kong earlier his year, as Asia was hit hardest by the virus. As it spread, Disney closed more parks in Japan. On March 12, despite an earlier statement from California governor Gavin Newsom exempting Disney from a general ban on crowd gatherings throughout the state, the company announced that it would close its Anaheim, California-based theme park Disneyland indefinitely as well. The shutdown marks just the third time in its history the Anaheim theme park has gone dark.
A few hours after the first March 12 announcement, the company released an update that Walt Disney World and other Disney-owned theme parks in Orlando would be closing as well. Disneyland Paris, where three staff members tested positive for coronavirus, will also be closing.
Full statement from Disney.
Disneyland Paris is closing too.
The company is also asking its domestic employees to work from home. pic.twitter.com/yfbL2eKvA6 — Frank Pallotta (@frankpallotta) March 13, 2020
Breaking: Disneyland will close. Here's the statement from the Walt Disney Co. pic.twitter.com/6ezTMXCd11 — Daniel Miller (@DanielNMiller) March 12, 2020
The back-and-forth over the theme parks illustrates just how rapidly and uncertainly the situation surrounding Disney’s properties has unfolded. As of Thursday morning, premieres for Mulan were scheduled to move ahead with merely a “downscaling” of plans. With a $200 million production budget, Mulan has been one of the buzzier recent Disney films.
Meanwhile, New Mutants fans just can’t catch a break: The film had already spent years weathering delays due to development and acquisition setbacks prior to its now-postponed April 3 release date — including five release delays. Now, make that an even six.
Disney’s decision to cancel the films could have repercussions for the wider entertainment industry. The question of whether or not to force movie theaters to close due to Covid-19 is a polarizing one for Americans — but with one less film juggernaut to draw them to the box office, the choice might have just gotten a little easier.


vox--2020-03-13--The Fed’s $1.5 trillion loan injection, explained

On Thursday , March 12 , the Federal Reserve Bank of New York announced that it would offer $ 1.5 trillion in short-term loans to banks to “ address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak ” : $ 500 billion on Thursday , March 12 ; $ 1 trillion , in two batches , on Friday , March 13 ; and another $ 500 billion each week for the rest of the month .
One-and-a-half trillion is a lot of money and could pay for a lot of things .
And perhaps because everyone @ @ @ @ @ @ @ coronavirus worries , and maybe because $ 1.5 trillion is an eye-poppingly big number , and maybe because congressional debates over fiscal stimulus packages are in the news already , several lefty politicians seized on the announcement and argued that $ 1.5 trillion should be spent on other priorities , like student debt relief or universal health care .
This is not a very good comparison to make .
The Fed did not “ spend ” $ 1.5 trillion ; it loaned the money to banks , which rely on these kinds of @ @ @ @ @ @ @ cash when most of their resources are tied up in assets like bonds .
What ’ s more , the Fed ’ s loans are collateralized , meaning they are backed up by bonds worth even more than the money the Fed lent .
If the banks should for some reason default on the loan , the Fed gets to keep the bonds and makes a sizable profit .
If the loans are paid back , the Fed still makes a profit because it charges a modest amount of interest for the loan @ @ @ @ @ @ @ as Vanderbilt Law School professor Morgan Ricks has , that the availability of these cheap loans amounts to a subsidy to firms taking them out .
But it ’ s just not a good comparison to equate this with spending $ 1.5 trillion on , say , Medicare-for-all .
The Fed ’ s action was taken with an eye toward stabilizing the market for repurchase agreements , or the “ repo ” market for short .
The repo market is the main mechanism by which financial institutions on Wall Street get cash , @ @ @ @ @ @ @ in stocks , bonds , and other assets .
The details are called “ repurchase agreements ” because of how they ’ re structured .
“ You ’ re selling something and promising to buy it back , ” Joseph Gagnon , a senior fellow at the Peterson Institute for International Economics who spent over two decades as an economist for the Fed , explained .
“ The financial institution has some high-quality bonds and it says , ‘ I ’ m going to sell these bonds to you , Federal Reserve , @ @ @ @ @ @ @ at a certain date , I will buy those bonds back from you at a fixed price .
You purchase them , and I will repurchase them.
’ ” That essentially amounts to a loan .
The Federal Reserve is giving money to the financial institutions in exchange for a promise to pay it back ( with interest ) at some point later on .
In the March 12 announcement , the terms laid out were one month and three months .
Like home mortgages , the loan is “ secured , ” @ @ @ @ @ @ @ asset that the borrower has to give up if they don ’ t repay .
In the case of a home mortgage , that means your house .
If you don ’ t pay , the bank can foreclose on you and take your house .
In the case of repos , the collateral is a Treasury bond .
If banks don ’ t pay the Fed back , it can keep the Treasury bonds it bought as part of the repo deal , bonds whose value exceeds that of the money it @ @ @ @ @ @ @ not in the banks ’ interests to renege on the deal .
The repo market is gigantic .
The most common kind of repo — a tri-party repo , where the buyer and seller use an intermediary —has an average daily volume in the $ 1 trillion to $ 3 trillion range ; on February 11 , for instance , it was nearly $ 2.5 trillion .
So $ 1.5 trillion over two days is a very significant intervention by the Fed , but it ’ s an intervention into an already very @ @ @ @ @ @ @ its size , a breakdown in the repo market can have much bigger , and graver , repercussions .
As Slate ’ s Jordan Weissmann notes , a run on the repo market was one of the instigating factors in the 2008 financial crisis .
There are good arguments to be made that it ’ s bad for Wall Street firms to rely so heavily on the repo market for its access to cash , but for the time being they do , and so destabilizing the repo market could have dire consequences @ @ @ @ @ @ @ could also disrupt the whole market for Treasury securities .
Since repo deals often use Treasury bonds as collateral , a large share of the total volume of Treasury bond deals involve repo agreements .
A shock to the repo market could thus shock Treasury interest rates , which are the baseline against which rates on everything from mortgages to credit cards to small businesses are set .
That could have unpredictable and harmful effects if not stabilized .
Gagnon emphasizes that these deals are profitable for the Fed .
“ The Fed @ @ @ @ @ @ @ ’ s any risk they won ’ t be paid back , ” he says .
“ Certainly in the last 30-40 years , the Fed has not lost a penny on any money they loaned.
” A subtler question is whether the Fed charged below-market rates such that it earned less profit than it could have earned charging market rates .
It did , and that ’ s exactly the point : It ’ s a lender of last resort that steps in when it decides the rest of the market isn @ @ @ @ @ @ @ But it remains the case that the Fed didn ’ t create money out of thin air and spend it .
It offered a public option for loans to banks that needed it .
Why this isn ’ t like student loan forgiveness It should be fairly obvious that a repo market intervention isn ’ t like , say , printing $ 1.5 trillion to pay for an expansion of health care .
If the Fed funded Medicare-for-all that way , it would not get $ 1.5 trillion back plus interest .
It @ @ @ @ @ @ @ money on doctor ’ s and nurse ’ s salaries , MRI equipment , hospital mortgages , etc.
, and never get it back .
But what about student loans ?
That ’ s a comparison Rep. Alexandria Ocasio-Cortez ( D-NY ) made and it ’ s a comparison that benefits from referring to another loan market .
Students are borrowing money with the intent of paying it back , just like the banks .
So why don ’ t they get below-market loan rates ?
Well , for one thing , they @ @ @ @ @ @ @ the Education Department nationalized most of the student loan industry : Subsidized as well as unsubsidized Stafford loans and PLUS loans are issued directly by the federal government .
And even in “ unsubsidized ” form , these loans are generally offered at rates below what private lenders can offer due to the inherent stability of the federal government .
President Trump has further said he will suspend interest payments on federal student loans as part of his coronavirus response , though it ’ s unclear if he needs congressional approval to go @ @ @ @ @ @ @ is to say the federal government is already offering below-market rates on student loans , and it probably should if we want to encourage people to go to college and deter them from predatory private loans .
There ’ s an important difference between the student loan market and the repo market , though .
The repo market features loans that are basically risk-free ; they are essentially always paid back , and they ’ re collateralized , so in the event they aren ’ t paid back , the lender still makes @ @ @ @ @ @ @ collateral .
Student loans are not only sometimes defaulted upon , but they ’ re not collateralized .
There ’ s no bond or house or whatever that students have to give up if they default on their student loans .
Now , the federal government does have the power to garnish wages , and it has decided that student loans aren ’ t dischargeable in bankruptcy , which both serve to lower the risk of default compared to , say , an unsecured credit card loan .
If I fall behind on @ @ @ @ @ @ @ ’ t garnish my wages and I can discharge my debts in bankruptcy , both of which make Chase ’ s decision to offer me a line of credit riskier , in some respects , than a federal student loan .
But student loans are still far , far riskier than repo loans of the kind the Fed is making .
So the comparison between a $ 1.5 trillion loan package and a hypothetical $ 1.5 trillion spending package for health care or student loan forgiveness is flawed , to say the least @ @ @ @ @ @ @ be made of how the repo market works and how the Fed props it up — Ricks has a great book on just that .
But I worry that these comparisons confuse more than they clarify .

On Thursday, March 12, the Federal Reserve Bank of New York announced that it would offer $1.5 trillion in short-term loans to banks to “address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak”: $500 billion on Thursday, March 12; $1 trillion, in two batches, on Friday, March 13; and another $500 billion each week for the rest of the month.
One-and-a-half trillion is a lot of money and could pay for a lot of things. And perhaps because everyone’s on high alert due to coronavirus worries, and maybe because $1.5 trillion is an eye-poppingly big number, and maybe because congressional debates over fiscal stimulus packages are in the news already, several lefty politicians seized on the announcement and argued that $1.5 trillion should be spent on other priorities, like student debt relief or universal health care.
When we say it's time to provide health care to all our people, we're told we can't afford it.
But if the stock market is in trouble, no problem! The government can just hand out $1.5 trillion to calm bankers on Wall Street. https://t.co/szXeqQmalq — Bernie Sanders (@SenSanders) March 12, 2020
FYI, the amount that the Fed just injected almost covers all student loan debt in the US.
There is absolutely NO excuse for not pausing student debt collections, planning for mortgage &rent relief, etc.
We need to care for working people as much as we care for the stock market. https://t.co/IT6qZA2gtt — Alexandria Ocasio-Cortez (@AOC) March 12, 2020
This is not a very good comparison to make. The Fed did not “spend” $1.5 trillion; it loaned the money to banks, which rely on these kinds of short-term loans as a way to get cash when most of their resources are tied up in assets like bonds. What’s more, the Fed’s loans are collateralized, meaning they are backed up by bonds worth even more than the money the Fed lent. If the banks should for some reason default on the loan, the Fed gets to keep the bonds and makes a sizable profit. If the loans are paid back, the Fed still makes a profit because it charges a modest amount of interest for the loan.
Now, you could argue, as Vanderbilt Law School professor Morgan Ricks has, that the availability of these cheap loans amounts to a subsidy to firms taking them out. But it’s just not a good comparison to equate this with spending $1.5 trillion on, say, Medicare-for-all.
The “repo” market, briefly explained
The Fed’s action was taken with an eye toward stabilizing the market for repurchase agreements, or the “repo” market for short. The repo market is the main mechanism by which financial institutions on Wall Street get cash, leveraging the huge amount they have invested in stocks, bonds, and other assets.
The details are called “repurchase agreements” because of how they’re structured. “You’re selling something and promising to buy it back,” Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who spent over two decades as an economist for the Fed, explained. “The financial institution has some high-quality bonds and it says, ‘I’m going to sell these bonds to you, Federal Reserve, and you give me cash, and at a certain date, I will buy those bonds back from you at a fixed price. You purchase them, and I will repurchase them.’”
That essentially amounts to a loan. The Federal Reserve is giving money to the financial institutions in exchange for a promise to pay it back (with interest) at some point later on. In the March 12 announcement, the terms laid out were one month and three months. Like home mortgages, the loan is “secured,” which means there’s an underlying asset that the borrower has to give up if they don’t repay. In the case of a home mortgage, that means your house. If you don’t pay, the bank can foreclose on you and take your house.
In the case of repos, the collateral is a Treasury bond. If banks don’t pay the Fed back, it can keep the Treasury bonds it bought as part of the repo deal, bonds whose value exceeds that of the money it lent. So it’s really not in the banks’ interests to renege on the deal.
The repo market is gigantic. The most common kind of repo — a tri-party repo, where the buyer and seller use an intermediary —has an average daily volume in the $1 trillion to $3 trillion range; on February 11, for instance, it was nearly $2.5 trillion. So $1.5 trillion over two days is a very significant intervention by the Fed, but it’s an intervention into an already very large market.
In part due to its size, a breakdown in the repo market can have much bigger, and graver, repercussions. As Slate’s Jordan Weissmann notes, a run on the repo market was one of the instigating factors in the 2008 financial crisis. There are good arguments to be made that it’s bad for Wall Street firms to rely so heavily on the repo market for its access to cash, but for the time being they do, and so destabilizing the repo market could have dire consequences.
A destabilization of the repo market could also disrupt the whole market for Treasury securities. Since repo deals often use Treasury bonds as collateral, a large share of the total volume of Treasury bond deals involve repo agreements. A shock to the repo market could thus shock Treasury interest rates, which are the baseline against which rates on everything from mortgages to credit cards to small businesses are set. That could have unpredictable and harmful effects if not stabilized.
Gagnon emphasizes that these deals are profitable for the Fed. “The Fed does not make loans in which there’s any risk they won’t be paid back,” he says. “Certainly in the last 30-40 years, the Fed has not lost a penny on any money they loaned.”
A subtler question is whether the Fed charged below-market rates such that it earned less profit than it could have earned charging market rates. It did, and that’s exactly the point: It’s a lender of last resort that steps in when it decides the rest of the market isn’t up to the task.
But it remains the case that the Fed didn’t create money out of thin air and spend it. It offered a public option for loans to banks that needed it.
Why this isn’t like student loan forgiveness
It should be fairly obvious that a repo market intervention isn’t like, say, printing $1.5 trillion to pay for an expansion of health care. If the Fed funded Medicare-for-all that way, it would not get $1.5 trillion back plus interest. It would just spend a whole lot of money on doctor’s and nurse’s salaries, MRI equipment, hospital mortgages, etc., and never get it back.
But what about student loans? That’s a comparison Rep. Alexandria Ocasio-Cortez (D-NY) made and it’s a comparison that benefits from referring to another loan market. Students are borrowing money with the intent of paying it back, just like the banks. So why don’t they get below-market loan rates?
Well, for one thing, they do. As part of Obamacare, the Education Department nationalized most of the student loan industry: Subsidized as well as unsubsidized Stafford loans and PLUS loans are issued directly by the federal government. And even in “unsubsidized” form, these loans are generally offered at rates below what private lenders can offer due to the inherent stability of the federal government. President Trump has further said he will suspend interest payments on federal student loans as part of his coronavirus response, though it’s unclear if he needs congressional approval to go through with that.
All of which is to say the federal government is already offering below-market rates on student loans, and it probably should if we want to encourage people to go to college and deter them from predatory private loans.
There’s an important difference between the student loan market and the repo market, though. The repo market features loans that are basically risk-free; they are essentially always paid back, and they’re collateralized, so in the event they aren’t paid back, the lender still makes money by keeping the bonds offered as collateral. Student loans are not only sometimes defaulted upon, but they’re not collateralized. There’s no bond or house or whatever that students have to give up if they default on their student loans.
Now, the federal government does have the power to garnish wages, and it has decided that student loans aren’t dischargeable in bankruptcy, which both serve to lower the risk of default compared to, say, an unsecured credit card loan. If I fall behind on my credit card payments, Chase can’t garnish my wages and I can discharge my debts in bankruptcy, both of which make Chase’s decision to offer me a line of credit riskier, in some respects, than a federal student loan.
But student loans are still far, far riskier than repo loans of the kind the Fed is making.
So the comparison between a $1.5 trillion loan package and a hypothetical $1.5 trillion spending package for health care or student loan forgiveness is flawed, to say the least. There are definitely valid critiques to be made of how the repo market works and how the Fed props it up — Ricks has a great book on just that. But I worry that these comparisons confuse more than they clarify.


vox--2020-03-13--Democrats have finally struck a deal with the White House on a coronavirus package

Democrats and the Trump administration finally have a deal on a multi-billion coronavirus stimulus package , after a long day of negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin .
Those negotiations were nearly upended when President Donald Trump declared “ we don ’ t think the Democrats are giving enough , ” at a White House press conference Friday afternoon , without specifying what he disliked about the package negotiated by his own administration .
( While there were earlier disagreements on an early provision establishing a permanent paid sick leave program , that provision was @ @ @ @ @ @ @ what was nearly the dealbreaker for Trump . )
The bipartisan bill will include free coronavirus testing for every American who needs it , including the uninsured .
It will also provide emergency paid sick leave and expand unemployment insurance , among other things .
“ This legislation is about testing , testing , testing , ” Pelosi said in a letter announcing the deal .
“ We can not fight coronavirus effectively unless everyone in our country who needs to be tested can get their test free of charge.
” This coronavirus @ @ @ @ @ @ @ last one Congress drafts .
Pelosi indicated earlier Friday the House would soon begin work on a “ third emergency response package ” in a letter to lawmakers .
Congress already passed an $ 8.3 billion aid package last week to help fund research and vaccine development .
But first , passage of this bill : The House is now expected to vote on the multibillion-dollar coronavirus relief package Friday night and send it over to the Senate .
( The upper chamber left DC for the weekend , but has canceled its @ @ @ @ @ @ @ relief bill on Monday . )
Democrats had expected a vote to happen much earlier in the day , but the dynamics became much more uncertain as House Republicans looked to Trump to give them the green light to vote for the bill — and didn ’ t get it .
Pelosi and Democrats still had enough votes to pass the bill without Republicans .
But they also understood that if the vote was not bipartisan and Trump didn ’ t support it , Senate Republicans would also shoot it down .
In @ @ @ @ @ @ @ was struck — Trump could have put Congress back to square one .
House Democrats ’ opening bid was an expansive relief package , which Republicans objected to over two provisions : paid sick leave and paid leave .
In addition to seeking permanent paid sick leave , Democrats had initially included a provision establishing a permanent paid leave program in case of public health emergencies , which would have required businesses to offer 14 days of paid leave to their workers ( the provision also would have provided a refundable tax credit @ @ @ @ @ @ @ ) .
“ There are things in there that had nothing to do of what we are talking about , ” Trump said Thursday .
“ It is not a way for them to get some of the goodies they haven ’ t been able to get for the last 25 years.
” Trump appeared to still be fixated on the idea of a payroll tax cut on Friday — something he has been floating for the past week .
Democrats objected because the payroll tax cut would likely benefit only companies and @ @ @ @ @ @ @ not help those already laid off due to the coronavirus and its economic impact .
A senior House Democrat called the idea a “ nonstarter , ” and even members of Trump ’ s party expressed skepticism that a payroll tax cut would be effective .
Here ’ s are the main provisions of the House relief package , according to Pelosi ’ s letter .
• Free coronavirus testing : Democratic leaders propose making coronavirus testing free to increase access by requiring private health insurers ( plus government programs like Medicare and @ @ @ @ @ @ @ testing , including emergency room visits and doctor fees .
This will also cover Americans without insurance .
• Emergency paid sick days : The bill would give workers 14 days of paid sick leave to be available immediately during the coronavirus ( many employers are asking employees to work from home for that amount of time ) .
It ensures sick leave to those impacted by quarantine orders , or those who must stay home to care for their children .
The bill reimburses small businesses ( those with 50 or fewer @ @ @ @ @ @ @ 14 additional days of leave .
• Emergency paid leave : The bill would create a new federal emergency paid leave program for those unable to work because they have Covid-19 , are quarantined , are caring for someone with the disease , or are caring for a child due to coronavirus-related school closings .
Eligible workers would receive benefits for a month ( the program goes up to three months ) , and the benefit amount would be two-thirds of the individual ’ s average monthly earnings .
Those receiving pay or @ @ @ @ @ @ @ ’ t eligible .
There is some precedent for this : Congress expanded unemployment benefits for up to 99 weeks for Americans left unemployed by the 2008 financial crisis .
• Expanded unemployment insurance : The bill would direct $ 2 billion to state unemployment insurance programs and waive measures like work search requirements or waiting weeks to those either diagnosed with Covid-19 , or those who have lost their jobs due to the spread of the virus .
• Expanding food security : The bill would direct $ 1 billion to expanding @ @ @ @ @ @ @ and the emergency food assistance program throughout the coronavirus pandemic .
Progressive economists have long believed that expanding existing safety net programs is a highly effective way of stimulating the economy because the low-income people who benefit from them are highly likely to immediately spend any extra money they get — helping stabilize economy-wide demand .
The 2009 stimulus bill featured many provisions along these lines .
Conservatives , who are critical of those programs in general , tend to be highly skeptical of putting more money into them .
Timeline and what @ @ @ @ @ @ @ to pass the bill Friday evening , the Senate has left Capitol Hill for the weekend .
That means the full Congress won ’ t pass this bill until Monday at the earliest , unless Senate Majority Leader Mitch McConnell calls senators back early .
On Thursday , McConnell canceled a previously scheduled Senate recess slated for next week to vote on the bill .
But time is of the essence with a rapidly spreading virus , especially since this bill deals with things like free coronavirus testing .
Public health officials fear @ @ @ @ @ @ @ hurt the country ’ s overall response .
Even after this bill is passed , Congress ’ s response to the coronavirus is far from over .
In her remarks to reporters and her letter to House members , Pelosi mentioned there would be future bills to help combat the crisis “ to protect the health , economic security and well-being of the American people.
” These could be more economic stimulus measures targeted toward industries hit hard by the coronavirus , including the travel and airline industries , Mnuchin said during his @ @ @ @ @ @ @ also considering temporarily suspending student loan payments for three months , Mnuchin added .
“ That ’ s on our list of 50 different items we ’ re bringing to the president for a decision , so that will be something we ’ re looking at , ” Mnuchin said .
Note : This is a developing story , and will be updated as new details become available .

Democrats and the Trump administration finally have a deal on a multi-billion coronavirus stimulus package — which includes paid sick leave, paid leave to care for family members, and mandating free testing — after a long day of negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin.
Those negotiations were nearly upended when President Donald Trump declared “we don’t think the Democrats are giving enough,” at a White House press conference Friday afternoon, but Trump finally tweeted his support on Friday evening:
I fully support H.R. 6201: Families First CoronaVirus Response Act, which will be voted on in the House this evening. This Bill will follow my direction for free CoronaVirus tests, and paid sick leave for our impacted American workers. I have directed.... — Donald J. Trump (@realDonaldTrump) March 14, 2020
The bipartisan bill includes free coronavirus testing for every American who needs it, including the uninsured. It will also provide emergency paid sick leave and expand unemployment insurance, among other things.
“This legislation is about testing, testing, testing,” Pelosi said in a letter announcing the deal. “We cannot fight coronavirus effectively unless everyone in our country who needs to be tested can get their test free of charge.”
This coronavirus relief package won’t be the last one Congress drafts. Pelosi indicated earlier Friday the House would soon begin work on a “third emergency response package” in a letter to lawmakers. Congress already passed an $8.3 billion aid package last week to help fund research and vaccine development.
But first, passage of this bill: The House is now expected to vote on the multibillion-dollar coronavirus relief package Friday night and send it over to the Senate. (The upper chamber left DC for the weekend, but has canceled its planned recess to take up the coronavirus relief bill on Monday.)
House Republicans were looking to Trump to give them the green light to vote for the bill — which he finally gave on Friday evening. Pelosi and Democrats still had enough votes to pass the bill without Republicans. But they also understood that if the vote was not bipartisan and Trump didn’t support it, Senate Republicans would also shoot it down.
They now have Trump’s support, which means the package is likely to move forward.
What’s in the House coronavirus relief package
House Democrats’ opening bid was an expansive relief package, which Republicans objected to over two provisions: paid sick leave and paid leave.
In addition to seeking permanent paid sick leave, Democrats had initially included a provision establishing a permanent paid leave program in case of public health emergencies, which would have required businesses to offer 14 days of paid leave to their workers (the provision also would have provided a refundable tax credit for small businesses to assist with costs).
“There are things in there that had nothing to do of what we are talking about,” Trump said Thursday. “It is not a way for them to get some of the goodies they haven’t been able to get for the last 25 years.”
Trump appeared to still be fixated on the idea of a payroll tax cut on Friday — something he has been floating for the past week. Democrats objected because the payroll tax cut would likely benefit only companies and a subset of workers, and would not help those already laid off due to the coronavirus and its economic impact. A senior House Democrat called the idea a “nonstarter,” and even members of Trump’s party expressed skepticism that a payroll tax cut would be effective.
Here’s are the main provisions of the House relief package, according to Pelosi’s letter.
Free coronavirus testing: Democratic leaders propose making coronavirus testing free to increase access by requiring private health insurers (plus government programs like Medicare and Medicaid) to cover the cost of testing, including emergency room visits and doctor fees. This will also cover Americans without insurance.
Democratic leaders propose making coronavirus testing free to increase access by requiring private health insurers (plus government programs like Medicare and Medicaid) to cover the cost of testing, including emergency room visits and doctor fees. This will also cover Americans without insurance. Emergency paid sick days: The bill would give workers 14 days of paid sick leave to be available immediately during the coronavirus (many employers are asking employees to work from home for that amount of time). It ensures sick leave to those impacted by quarantine orders, or those who must stay home to care for their children. The bill reimburses small businesses (those with 50 or fewer employees) for the cost of the 14 additional days of leave.
The bill would give workers 14 days of paid sick leave to be available immediately during the coronavirus (many employers are asking employees to work from home for that amount of time). It ensures sick leave to those impacted by quarantine orders, or those who must stay home to care for their children. The bill reimburses small businesses (those with 50 or fewer employees) for the cost of the 14 additional days of leave. Emergency paid leave: The bill would create a new federal emergency paid leave program for those unable to work because they have Covid-19, are quarantined, are caring for someone with the disease, or are caring for a child due to coronavirus-related school closings. Eligible workers would receive benefits for a month (the program goes up to three months), and the benefit amount would be two-thirds of the individual’s average monthly earnings. Those receiving pay or unemployment compensation directly through their employers aren’t eligible. There is some precedent for this: Congress expanded unemployment benefits for up to 99 weeks for Americans left unemployed by the 2008 financial crisis.
The bill would create a new federal emergency paid leave program for those unable to work because they have Covid-19, are quarantined, are caring for someone with the disease, or are caring for a child due to coronavirus-related school closings. Eligible workers would receive benefits for a month (the program goes up to three months), and the benefit amount would be two-thirds of the individual’s average monthly earnings. Those receiving pay or unemployment compensation directly through their employers aren’t eligible. There is some precedent for this: Congress for up to 99 weeks for Americans left unemployed by the 2008 financial crisis. Expanded unemployment insurance: The bill would direct $2 billion to state unemployment insurance programs and waive measures like work search requirements or waiting weeks to those either diagnosed with Covid-19, or those who have lost their jobs due to the spread of the virus.
The bill would direct $2 billion to state unemployment insurance programs and waive measures like work search requirements or waiting weeks to those either diagnosed with Covid-19, or those who have lost their jobs due to the spread of the virus. Expanding food security: The bill would direct $1 billion to expanding access to programs like SNAP, WIC and the emergency food assistance program throughout the coronavirus pandemic. Progressive economists have long believed that expanding existing safety net programs is a highly effective way of stimulating the economy because the low-income people who benefit from them are highly likely to immediately spend any extra money they get — helping stabilize economy-wide demand. The 2009 stimulus bill featured many provisions along these lines. Conservatives, who are critical of those programs in general, tend to be highly skeptical of putting more money into them.
Timeline and what could come next
As the House prepares to pass the bill Friday evening, the Senate has left Capitol Hill for the weekend. That means the full Congress won’t pass this bill until Monday at the earliest, unless Senate Majority Leader Mitch McConnell calls senators back early.
On Thursday, McConnell canceled a previously scheduled Senate recess slated for next week to vote on the bill. But time is of the essence with a rapidly spreading virus, especially since this bill deals with things like free coronavirus testing. Public health officials fear even a few days of delay could hurt the country’s overall response.
Even after this bill is passed, Congress’s response to the coronavirus is far from over. In her remarks to reporters and her letter to House members, Pelosi mentioned there would be future bills to help combat the crisis “to protect the health, economic security and well-being of the American people.”
These could be more economic stimulus measures targeted toward industries hit hard by the coronavirus, including the travel and airline industries, Mnuchin said during his CNBC interview. The White House is also considering temporarily suspending student loan payments for three months, Mnuchin added.
“That’s on our list of 50 different items we’re bringing to the president for a decision, so that will be something we’re looking at,” Mnuchin said.


vox--2020-03-13--Capitol Hill is beginning to see its own coronavirus-related closures

The coronavirus is changing the way business is conducted on Capitol Hill .
Capitol hallways , usually bustling with visitors at this time of year , are mostly empty as public tours have been canceled .
Some members of Congress , including Sens .
Lindsey Graham and Ted Cruz , are self-quarantining after coming into contact with individuals diagnosed with Covid-19 , the disease caused by the coronavirus , and they ’ re now waiting for the results of their own tests .
A handful of House and Senate offices are also making the decision to close down their DC @ @ @ @ @ @ @ .
But for all the changes , Congress isn ’ t shutting down entirely .
House Speaker Nancy Pelosi has told lawmakers that as “ captains of the ship , ” they “ are the last to leave.
” Amid ongoing negotiations with the White House for a deal on a coronavirus relief package , many lawmakers remain .
While the House is set to go on a pre-scheduled recess next week , Senate Majority Leader Mitch McConnell has canceled the Senate ’ s recess so the upper chamber can vote on a @ @ @ @ @ @ @ it .
But with travel riskier because of the virus and with three senators already in self-quarantine , coming back to Capitol Hill may become more difficult in the coming days .
And given their older average age , members of the Senate and House are among the groups that could be most at risk for severe coronavirus symptoms .
“ Sixty-six senators are over 60 — two-thirds of the body — with more than a quarter over 70 , ” NBC News reports .
“ The average age of House members is @ @ @ @ @ @ @ Research Service.
” Congress has long been reluctant to implement remote voting and other such practices , but the unprecedented circumstances presented by Covid-19 could force lawmakers to reconsider how they operate .
Multiple senators have closed their DC offices temporarily , and the Capitol is no longer open to the public The reaction to the coronavirus has varied across lawmakers ’ offices , but several senators have already shuttered theirs for the time being .
Sen. Maria Cantwell was among the first to do so after a staffer in her office tested @ @ @ @ @ @ @ Cantwell and her staff have worked remotely since Wednesday evening , and others in the upper chamber have followed suit .
Sens .
Tom Cotton , Ted Cruz , Bill Cassidy , and Sherrod Brown are among those who have temporarily closed their DC offices , with staffers teleworking during this time .
“ The most sensible course of action for the public and the congressional workforce under the circumstances is for my staff to telecommute , ” Cotton said in a statement .
Beginning Thursday evening , the House and Senate sergeant-at-arms @ @ @ @ @ @ @ all tours .
Members , staff , and official business visitors will be the only ones allowed in the Capitol in the coming weeks .
And the restrictions are set to stay in effect until April 1 , pending further developments .
“ The Senate and House sergeants-at-arms announced the suspension of public tours and nonofficial access to the Capitol complex beginning at the close of business today and running through the end of March , ” Senate Majority Leader Mitch McConnell ( R-KY ) said Thursday .
“ I fully support the @ @ @ @ @ @ @ question on the minds of multiple members of Congress and their staff is if and when they ’ ll get the green light from leadership for all of them to work remotely , especially if the coronavirus threat worsens in the United States .
“ There has been guidance sent out on continuity of operations plans , ensuring offices have the resources they need to telework , ” a Democratic aide told Vox earlier this week , adding that members of Congress have offered a number of ideas on that front .
Members @ @ @ @ @ @ @ with coronavirus are working from home , but it ’ s been on a case-by-case basis .
Though Pelosi has said House members and other offices are updating their technology to be able to work remotely , there has been no decision made thus far on whether lawmakers will actually do so or if Congress will simply hold a recess to allow members and staff to stay home .
“ In case , God forbid , but in case there is a need for people to work from home , all of the @ @ @ @ @ @ @ offices that serve the purpose of the Capitol — will have the technology up to date in order to do that , ” Pelosi said Thursday .
Voting remotely is another thing entirely .
Voting is a huge part of the job of a member of Congress , especially during a massive public health crisis if more new funding or economic stimulus needs to be approved .
Pelosi has already signaled there will likely be more coronavirus-related packages to come , which means lawmakers will need to return to Washington .
Pelosi said @ @ @ @ @ @ @ vote from home , and House rules state : Despite a push for the ability to vote remotely in the past , those who have argued against it have long said that such tactics don ’ t allow for ample debate and discussion to take place .
Rep. Eric Swalwell ( D-CA ) previously proposed — and has reintroduced — a bill that would enable lawmakers to take certain procedural votes remotely and videoconference during hearings , though it hasn ’ t gained enough traction to advance .
The emerging challenges posed by @ @ @ @ @ @ @ lawmakers to give it — and measures like it — another look .

The coronavirus is changing the way business is conducted on Capitol Hill.
Capitol hallways, usually bustling with visitors at this time of year, are mostly empty as public tours have been canceled. Some members of Congress, including Sens. Lindsey Graham and Ted Cruz, are self-quarantining after coming into contact with individuals diagnosed with Covid-19, the disease caused by the coronavirus, and they’re now waiting for the results of their own tests. A handful of House and Senate offices are also making the decision to close down their DC offices and directing staff to work remotely.
But for all the changes, Congress isn’t shutting down entirely. House Speaker Nancy Pelosi has told lawmakers that as “captains of the ship,” they “are the last to leave.” Amid ongoing negotiations with the White House for a deal on a coronavirus relief package, many lawmakers remain.
While the House is set to go on a pre-scheduled recess next week, Senate Majority Leader Mitch McConnell has canceled the Senate’s recess so the upper chamber can vote on a coronavirus relief package after the House passes it.
But with travel riskier because of the virus and with three senators already in self-quarantine, coming back to Capitol Hill may become more difficult in the coming days.
And given their older average age, members of the Senate and House are among the groups that could be most at risk for severe coronavirus symptoms. “Sixty-six senators are over 60 — two-thirds of the body — with more than a quarter over 70,” NBC News reports. “The average age of House members is 57.6 years, according to the Congressional Research Service.”
All seniors, especially those like me who are over 70, must take every precaution: we are the ones most likely to suffer the most severe complications from COVID-19 that will overwhelm the healthcare system. Please, follow strict social-distancing & even consider self-quarantine. — Mitt Romney (@MittRomney) March 13, 2020
Congress has long been reluctant to implement remote voting and other such practices, but the unprecedented circumstances presented by Covid-19 could force lawmakers to reconsider how they operate.
Multiple senators have closed their DC offices temporarily, and the Capitol is no longer open to the public
The reaction to the coronavirus has varied across lawmakers’ offices, but several senators have already shuttered theirs for the time being.
Sen. Maria Cantwell was among the first to do so after a staffer in her office tested positive for Covid-19 earlier this week. Cantwell and her staff have worked remotely since Wednesday evening, and others in the upper chamber have followed suit. Sens. Tom Cotton, Ted Cruz, Bill Cassidy, and Sherrod Brown are among those who have temporarily closed their DC offices, with staffers teleworking during this time.
“The most sensible course of action for the public and the congressional workforce under the circumstances is for my staff to telecommute,” Cotton said in a statement.
Beginning Thursday evening, the House and Senate sergeant-at-arms have also closed the Capitol building to all tours. Members, staff, and official business visitors will be the only ones allowed in the Capitol in the coming weeks. And the restrictions are set to stay in effect until April 1, pending further developments.
“The Senate and House sergeants-at-arms announced the suspension of public tours and nonofficial access to the Capitol complex beginning at the close of business today and running through the end of March,” Senate Majority Leader Mitch McConnell (R-KY) said Thursday. “I fully support the decision of these nonpartisan officers.”
Will Congress start working from home?
The question on the minds of multiple members of Congress and their staff is if and when they’ll get the green light from leadership for all of them to work remotely, especially if the coronavirus threat worsens in the United States.
“There has been guidance sent out on continuity of operations plans, ensuring offices have the resources they need to telework,” a Democratic aide told Vox earlier this week, adding that members of Congress have offered a number of ideas on that front.
Members who have reported being exposed to individuals with coronavirus are working from home, but it’s been on a case-by-case basis. Though Pelosi has said House members and other offices are updating their technology to be able to work remotely, there has been no decision made thus far on whether lawmakers will actually do so or if Congress will simply hold a recess to allow members and staff to stay home.
“In case, God forbid, but in case there is a need for people to work from home, all of the offices — not only congressional offices but offices that serve the purpose of the Capitol — will have the technology up to date in order to do that,” Pelosi said Thursday.
Voting remotely is another thing entirely. Voting is a huge part of the job of a member of Congress, especially during a massive public health crisis if more new funding or economic stimulus needs to be approved. Pelosi has already signaled there will likely be more coronavirus-related packages to come, which means lawmakers will need to return to Washington.
Pelosi said last week that members can’t vote from home, and House rules state:
Every Member shall be present within the Hall of the House during its sittings, unless excused or necessarily prevented, and shall vote on each question put, unless having a direct personal or pecuniary interest in the event of such question.
Despite a push for the ability to vote remotely in the past, those who have argued against it have long said that such tactics don’t allow for ample debate and discussion to take place. Rep. Eric Swalwell (D-CA) previously proposed — and has reintroduced — a bill that would enable lawmakers to take certain procedural votes remotely and videoconference during hearings, though it hasn’t gained enough traction to advance.
The emerging challenges posed by the coronavirus, however, could prompt lawmakers to give it — and measures like it — another look.