David R Kotok
Cumberland, September 6, 2016
After squandering months in partisan bickering and brinksmanship over Zika – and indulging in a two-month summer vacation – Congress goes back to work today. In the meantime, since Congress adjourned on July 15, the number of pregnant women in the US and its territories who are known to have contracted Zika has grown from 649 to 1595, a 246% increase. (Figures here and below are as of Aug. 31.)
The number of Zika-infected babies born with microcephaly or other deformities has now reached 17. Interestingly but alarmingly, 16 of those 17 reports come from the continental US, where the total known case count is 2,722, while only one such birth has been reported in Puerto Rico, which has 14,110 known cases.
We say “known cases” because Zika virus causes only a mild illness in most people, with few if any symptoms; and so most carriers of the virus don’t even know they have it. Thus reported cases may be just the tip of a very damaging, very costly iceberg. In Puerto Rico, some health officials have estimated that the total number of cases may be more than 50 times greater than the reported cases. See http://www.rollingstone.com/culture/features/zika-the-epidemic-at-americas-door-20160615.
If similar percentages obtained in Puerto Rico as in the 50 states, we would expect there now to be some 83 cases of Zika-caused birth defects in Puerto Rico, not just one. We have to wonder just how far the Zika virus has already outrun underfunded surveillance efforts.
In Miami, Florida, the number of locally acquired cases has grown from 4 on July 29 to 35 a month later, and health officials fear that local transmission will soon be reported in New Orleans, Houston, or other Southeastern cities.
In the absence of congressional action, as of August 26 the CDC had spent $194 million of the $222 million it was allocated to fight Zika. According to CDC Director Dr. Thomas R. Frieden, if Florida develops additional clusters of Zika cases, or if there are outbreaks in other states, the agency will not be able to provide emergency funds. (Source: http://www.nytimes.com/2016/08/31/health/us-funding-for-fighting-zika-virus-is-nearly-spent-cdc-says.html)
The Dept. of Health and Human Services reports that by the end of August it too had spent virtually all of the $584 million that the White House had diverted from Ebola funding to combat Zika. (Source: http://www.nytimes.com/2016/08/12/us/politics/with-congress-deadlocked-white-house-diverts-funds-to-fight-zika.html)
Republicans in the Senate have scheduled a vote on a $1.1 billion Zika package for today, Sept. 6. However, this is the very same package whose passage was blocked by Senate Democrats back in July – and they are expected to block it again. The Democrats have accused Republicans of booby-trapping the bill by adding provisions that restrict the role of Planned Parenthood and similar organizations in providing contraceptive services to fight Zika, which can be transmitted sexually. The Republicans counter that while Planned Parenthood isn’t on the specific list of organizations that will receive immediate block-grant funding in Zika-hit locales like Puerto Rico, nothing prevents grant recipients from giving some of their money to Planned Parenthood as a sub-grantee.
The attack on Planned Parenthood is a pack of lies. It is those clinics that are helping mothers. And Republican insistence on nailing Planned Parenthood over abortion is responsible for the failure in the House to use an existing public health infrastructure to fight Zika.
But the Democrats are hardly blameless. President Obama threatened a veto because unused Obamacare funds were to be allocated to fight Zika. And Senate Minority Leader Harry Reid mustered enough votes to block a cloture vote on the Zika bill in early July and sent Congress into recess with no decision taken on Zika.
There were other objections and counter-objections to the bill, too. Bottom line: the Senate didn’t get the job done in July, and they lost an entire year of federally organized and funded defense of the millions of Americans at risk.
Now, unless considerable additional pressure is applied to these so-called leaders of ours, they won’t pass a Zika bill this month, either. Even if they do pass something, it is likely to fall about a billion dollars short of the amount health officials project they will need to attack the virus. We urge you to contact your own Senators and Representatives and make clear to them that they must confront the Zika threat – even if that means they must work out a compromise! (And remember, there are Zika cases now in every state but Wyoming and Alaska.)
Mosquito season won’t be over until late October or November in the South. The numbers of Zika-affected people will continue to grow rapidly, and the costs will multiply, too, not only for those who harbor the virus but also for local and regional economies. Those costs are already widespread and, at this stage, largely unpredictable. They range from impacts on tourism and the travel industry (see http://time.com/money/4434194/zika-florida-outbreak-tourist-deals/) to increased public healthcare costs. For instance, the FDA has strongly suggested that all blood donations be screened for Zika, but screening the nation’s blood supply for a new illness is an enormous task, and many hospitals and clinics will struggle to handle it. See http://www.nytimes.com/2016/08/27/science/all-donated-blood-in-us-will-be-tested-for-zika.html.
And we remind readers that the CDC estimates the cost of care for each child born with Zika-caused microcephaly to be as high as $10 million over a lifetime. (See http://www.cbsnews.com/news/the-true-cost-of-zika-in-the-u-s-could-be-staggering/.)
Meanwhile the need for improved forms of mosquito control has been highlighted by a recent debacle in South Carolina. The Sept. 1 Washington Post reported a massive bee kill with this headline: “‘Like it’s been nuked’: Millions of bees dead after South Carolina sprays for Zika mosquitoes.” The bees died when the pesticide Naled was sprayed in Dorcester County. The development of less destructive and more precisely targeted forms of mosquito control requires research dollars.
Democrats and Republicans in the House and Senate are the reason our government is failing. They own the outcomes on Zika. They are responsible for the failure of early action – but we will all pay the price. The greatest price, of course, will be paid by some of our youngest citizens and their families, and they will continue to pay that price for the rest of their lives.
I had this to say about the Zika debacle when I spoke with Bloomberg’s Tom Keene on Sept. 1.
More on the Costs of Political Failure on Zika (August 12)
Zika Update (July 19, 2016)
The Zika Virus and the US Congress (May 23, 2016)
David R Kotok
Chairman & Chief Investment Officer