Senior Administration Officials Preview of National Security Advisor Jake Sullivan and Secretary of State Antony J. Blinken’s Trip to Anchorage, Alaska

Office of the Spokesperson

VIA TELECONFERENCE

MODERATOR:  Hi, everyone.  Good evening.

Our call today is going to be attributed to senior administration officials.  Our speakers today are and .  Again, on background, to SAOs, and the contents of this call are embargoed until its conclusion.

With that, I will turn it over to to open us up.

SENIOR ADMINISTRATION OFFICIAL ONE:  Well, thanks so much, , and thanks to all of you for joining us on the line this evening.  I want to start off by situating the Anchorage meeting in the context of our broader Indo-Pacific Strategy, which many of you have seen that we’ve been rolling out on quite rapidly.

But starting on our approach to China as part of that broader Indo-Pacific Strategy, we’ve been clear from the beginning that there are three main pieces to our approach to China.  The first is strengthening ourselves at home, and we see the – addressing the economic recovery, pandemic response, enhancing our competitiveness as absolutely critical and key to that.  We’ve now seen in the 50-odd days under our belts here the American Recovery Act passed.  We’ve seen vaccine distribution accelerated on a pretty significant scale.  We’ve seen a lot of positive trend lines on what we can do at home on core domestic sources of strength.  We’ve got more work to do, but we feel like we are off to a pretty good start with the domestic efforts that are going to give us the sources of strength that we need to compete with China and to have an affirmative approach to the Indo-Pacific region.

The second piece of it is our allies and partners and our work in international institutions.  I think that all of you will have seen – and, of course, you’ve got the Secretary of State currently in the region, which I’ll leave to to speak to – but we have had early and intensive engagements, virtually and now in person, to move out aggressively with our allies and partners.  And this is about working with our allies and partners on our shared interests and our shared values, but also in terms of understanding where we face similar challenges, including from China.

I think sometimes folks think of our allies and partners piece here as just being about choreography, that somehow we just need to talk to our allies before we talk to China.  And I want to stress that that’s actually not the case.  Obviously, that sequencing is part of the equation here, but we’re working actually with allies and partners to strengthen our hand.  I think that the Quad last week was probably the most important very clear illustration in practical terms of exactly what we’re trying to achieve here, bringing together the four leaders in a virtual summit for the first time to actually do something together that we couldn’t do individually, particularly on the vaccine distribution deliverable.  That was big and affirmative for the region.  This isn’t just about something that is here to counter China; this is about something that’s actually about doing something that enhances our leverage, enhances the quality of life in the region in meaningful ways.

And so that work is well underway.  I’d also just note that our diplomacy as it relates to the Indo-Pacific is not limited just to the Indo-Pacific.  We have been engaged in some pretty intensive diplomacy with our European partners and allies on the Indo-Pacific region, including on China.  We’ve had a series of engagements at all levels with European partners and allies.  We’ve been doing a bit of a virtual roadshow with a number of different capitals, having interagency conversations with key interlocutors there to really compare notes.

And two, we’ve always said that the domestic piece, strengthening ourselves at home, and then working with allies, partners, and international institutions to strengthen ourselves globally is really key to setting up how we are going to both confront China where it is undermining our interests and values, and where we’re going to cooperate with China where we have an interest in doing so.  I think that it’s really important that that is the backdrop for our conversations in Anchorage.  We are coming in with what we feel like is an increasing – increasingly strong hand to come to the table with our Chinese interlocutors.

I think that the conversations in Anchorage are very much intended as an initial discussion to understand one another’s interests – sorry, our interests, intentions, and priorities, and frankly, to get a bit of an understanding of where the Chinese are at.

We think it’s really important that our Chinese interlocutors hear from Secretary Blinken and from National Security Advisor Sullivan directly about our priorities and about our intentions.  We know that sometimes there is a sense, potentially a perception, or maybe it’s a hope, in Beijing that our public message is somehow different than our private message.  And we think it’s really important that we dispel that idea very early and that we’re very clear with delivering the same messages in private that you have heard from us in public.  That includes making very clear our deep concerns about a range of issues, whether it’s Xinjiang, Hong Kong, Chinese economic coercion of our allies and partners, China’s increasingly aggressive activities across the Taiwan Strait.  We will absolutely make those points very clear.  But this is really about having a broader strategic conversation, it’s about communicating the areas where we intend to take steps, and it’s about understanding where our Chinese interlocutors are at.

Let me just make a couple of other specific points on the meeting itself and the goals around it.  I know you’ve heard this from folks already, but just to reinforce it, that this really is a one-off meeting.  This is not the resumption of a particular dialogue mechanism or the beginning of a dialogue process.  This is very much about sitting down, getting an understanding of each other, and then taking that back and taking stock.  Many of you know that we are in the middle of a pretty extensive China strategy development process, and the inputs that we’re getting from our allies and partners are really core to that understanding where we have some opportunities to work together and where we can best build shared leverage.  But in putting where our Chinese interlocutors are at as well, what we will hear from Yang Jiechi and Wang Yi in this conversation will be important to informing where we go in our China strategy going forward.  And so we think it’s really important to get that.

I also want to underscore one point, which I know that this is a little bit of a unique configuration.  We’ve not had the national security advisor and secretary of state meet together with their Chinese interlocutors previously, and we actually think that this is really important, not just in terms of something for show; but rather, we’ve seen a track record from China in the past of attempting to try to play favorites within an administration and, in particular, to play the secretary of state and national security advisor off each other.  I’ve worked on China at both the State Department and the NSC previously, and I’ve seen this in action.  And we felt it was really important to underscore from the get-go that this administration is unified and coordinated when it comes to China policy, and that the President’s two closest foreign policy and national security advisors were going to be sitting down together to have this conversation, that there is not going to be daylight, and that the games that China has played in the past to divide us or attempt to divide us are simply not going to work here.  And so this is a very deliberate and visual demonstration of that from the get-go that we think is really important for helping to inform and shape how China seeks to engage with us.

The last thing I would say before turning it over to is that I know there is a lot of questions from folks about whether we’re going to get into detail of negotiating some of the specific issues that are outstanding in the U.S.-China relationship.  And our own view is that we’re simply not there yet.  We need to have more detailed conversations with our allies and partners, that it’s really important that we take this deliberate time to understand actually sort of what the landscape is and how to best position the United States for success in this competition.  And that means getting inputs from a variety of places and putting it in a hopper and understanding actually what’s going to give us the best hand.

And so the conversation in Anchorage is really going to be at that broader strategic level, where we will touch on some specific issues but aren’t expecting to come out with specific negotiated deliverables that will answer the questions.  Rather, this is just the beginning of that process.

So with that, let me hand it over to my colleague over at the State Department.

SENIOR ADMINISTRATION OFFICIAL TWO:  Thank you so much, .  Let me just point out, as you – mentioned all the great diplomacy that is happening all over the world but particularly here in the East Asia region.  As folks probably are tracking, Secretary Blinken and Secretary Austin had superb meetings with their Japanese counterparts yesterday and today the team is looking forward to a full day of engagement with our Korean counterparts.  I think it’s worth pointing out that we’re receiving extraordinary hospitality from these two allies of ours in the midst of a pandemic, which I think really goes quite a ways to showing how important these alliances are.  And of course, the fact that these are the first overseas trips by Biden Cabinet officials I think also makes very clear the point that was making earlier about how much we’re focusing on conversations and getting ourselves aligned with our partners and allies.

I think did a great job of laying out what we expect to get out of Anchorage.  The only point I would add on that is the – Beijing has been talking about its desire to change the tone of the relationship, and of course, we’re going to be looking at deeds, not words on that front.  And we’re of course coming to these discussions with a very clear-eyed view about the PRC’s pretty poor track record of keeping its promises.

So with that, I’m happy to turn it over, , for Qs and As.  Thanks.

MODERATOR:  Thanks very much, everyone.  Operator, if you could please open the lines for our first question.

OPERATOR:  Absolutely.  Ladies and gentlemen, if you do have questions, press 1 then 0 on your touch tone phone.  You’ll hear an indication that you’ve been placed into queue, and you may remove yourself from queue by repeating the 1 then 0 command.  If you’re using a speaker phone, please pick up your handset before pressing any buttons and make certain your phone is unmuted before asking your question.

We’ll go first to the line of Nick Schifrin with PBS.  Go ahead, please.

QUESTION:  Hey, .  Hey, .  Thank you for doing this.  Two questions.  The last time the U.S. met Yang Jiechi, the administration asked that there would be no follow-on meetings specifically until there was a behavior change from Beijing.  Is that the same approach that you’re taking?  And a 30,000-foot question:  Do you believe that Xi Jinping is willing to change his behavior based on U.S. pressure?  Thanks.

SENIOR ADMINISTRATION OFFICIAL ONE:  Hi, operator, are you there?  I think we might have muted the speaker.

OPERATOR:  Yes, we’ll go —

SENIOR ADMINISTRATION OFFICIAL ONE:  I’m – oh, I’m sorry.  That was me muting myself.  I apologize.

OPERATOR:  No worries.

SENIOR ADMINISTRATION OFFICIAL ONE:  (Laughter.)  Nick, I was giving you a great answer there.  Great to hear from you.  So on your question, what I would say is that as just made clear, we believe particularly as Beijing is professing an interest in a change in tone in the relationship, what we’re looking for is deed more than word.  I think said that exactly right.  And that, of course, does mean that we’re going to lay down some specific areas where we believe that Beijing does need to take some steps to change course.  And you’ve probably seen some comments specifically about China’s economic coercion in some of our allies, including Australia, that we do believe need to change before we can take substantial steps forward in the relationship.  And so that is absolutely one of the factors that we are looking at here as we map out the way forward, but I agree with ’s point on being very clear-eyed and realistic about what that might mean.

OPERATOR:  We will go next to the line of Christina Ruffini with CBS News.

QUESTION:  Hi, everybody.  Greetings from Japan.  I was wondering if you could talk a little bit about how this meeting came about – who reached out to whom, who initiated it, how the venue was chosen, and what kind of format we’re going to see in Anchorage.  Thanks so much.

SENIOR ADMINISTRATION OFFICIAL ONE:  Hey, thanks for the question.  So what I would say is that the U.S. felt that, number one, the timing of the meeting needed to occur after we had taken some of those steps to really strengthen ourselves that I laid out at the top – domestic renewal and reinvestment and some substantial engagement with allies and partners – and that it was very important to us that we had some of that work meaningfully underway before we had an engagement with our Chinese interlocutors at a senior level.  And we’ve made clear to them from the get-go that the lines of communication are open.  We think that’s important.  But again, in terms of a high-level meeting, that that needed to wait until we had some of those other steps in motion.

The other thing I’d say is that we also felt it was really important that we host the meeting on U.S. soil.  We just felt for a variety of reasons that being on our own territory was extremely important for this meeting and of not attempting to meet in China.  And so that’s – and then I guess the last piece of it is in terms of the venue.  A lot of it was sort of practicality involving travel and COVID protocols and challenges of meeting in different places, and so we sort of landed here for a variety of reasons, but that’s kind of how we ended up with that.

But I do just want to underscore the point again of feeling very important, and I think Jen Psaki had said this from the podium previously, of actually hosting on U.S. soil as a key piece of this.  I don’t know if wants to add anything on that.

SENIOR ADMINISTRATION OFFICIAL TWO:  Yeah, thanks, .  You hit the point about the way the travel arrangements worked out.  So, of course, Secretary Blinken and company will be traveling back from Korea and then – and Alaska makes a pretty good midpoint stop.  And clearly, the fact that Director Yang is willing to come out to the States again, I think that we certainly welcome that.  He made two visits in the last years of the previous administration.  I think he was both in New York and in Honolulu, so happy that we’ll be able to welcome him to Alaska.  Over.

OPERATOR:  We will go next to Owen Churchill with the South China Morning Post.  Go ahead, please.

QUESTION:  Hi there.  Can you hear me?

SENIOR ADMINISTRATION OFFICIAL ONE:  Yep.

QUESTION:  Great, thanks so much for doing this.  A couple of quick questions.  Just a broad one first about how you would characterize success and failure, respectively, when it comes to your expectations for this meeting.  And then a second question about logistics:  Are you anticipating releasing a joint statement after this, or would there be separate readouts from either side?  Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE:  There will not be a joint statement.  I’m happy to take that one first.  I guess in terms of the question of what does success look like, I want to situate this again in terms of a process.  And I recognize that that is not necessarily the glitziest of a headline, but we really see this meeting, again, as both part of the broad Indo-Pacific diplomatic work underway and very much one piece of a continued ongoing – and there will be more to come after this, right?

And so I see this as being one data point in that overarching strategy and approach that we are running right now, and so I think the – frankly, a failure would be if somehow this meeting were to be seen to somehow be divorced from that overall strategy.  And that’s why I think it’s really important for us that these conversations be situated – by the way, including the conversations we will have in the room in Anchorage – will be situated in what we are trying to achieve in our broader priorities across this administration.

And so for us, our China strategy fits within our broader Indo-Pacific Strategy, sits within our broader approach to national security.  And you could see that in the Interim Strategic Guidance document that the administration released a couple weeks ago.  And so I think that’s a really critical piece of this.

And I think success – again, put this really well, so I just – I’m going to just keep quoting him back here, which is this is about understanding will there actually be any change indeed, but I think our expectations are really realistic there.  And so for me, that’s not necessarily where my focus is going to be.  It’s going to be much more understanding over time how do we – how do we shape that behavior change that we’re trying to seek.  probably has other even more insightful thoughts on this.

SENIOR ADMINISTRATION OFFICIAL TWO:  Hey, don’t raise the bar on me like that, .  No, actually, I would say, look, success – , you said it up front.  I mean, we don’t have any unrealistic expectations for sure, but we do think it’s an opening to open up these lines of communication and for our principals to be very, very blunt with their principals about the long list of concerns, quite a few of which ticked off at the top.  We don’t want them to be operating under illusions about our tough-minded approach to their very problematic behavior.  And on the other hand, of course, it’s an opportunity for our guys to hear from them.  So without raising expectations unduly, I think we’re looking to have a nice, robust, and very frank conversation with a power that is going to be a major competitor of ours.  So it’s good that we’re opening up these channels of communication.  Over.

OPERATOR:  We’ll go to the line of Lara Jakes with New York Times.  Go ahead, please.

QUESTION:  Hi, good morning from Japan.  It’s a beautiful day here.  I wanted to pick up on what you just said, .  And I’m wondering, as the United States’ principals are just as blunt about your expectations, what happens if the Chinese come to the table and they are just as blunt about their expectations?  They’ve been very clear in saying the United States should not be meddling in what they see as internal issues for China.  What does that portend for the future of the relationship if they come to the table and they say, no, these are our principles, and we don’t expect to move from that?

And then also, , I was wondering if you could just very quickly elaborate a little bit on what you said about how this may be the first time that a secretary of state and a national security advisor have sat down jointly with their Chinese counterparts.  Are you making reference to the previous administration or to the Obama administration or going back to the Bush administration?  How far back does that go?  Thank you so much.

SENIOR ADMINISTRATION OFFICIAL TWO:  Guess I’ll try the first part there.  Look, Secretary Blinken has said that the relationship with China, we – it’s going to be competitive when it should be, collaborative when it can be, and adversarial when it must be.  And if we get to issues where we just have very different views, it’ll be good to – it’ll be good for both sides to hear one another out.

But our view is, listen, we’re not asking the PRC to do anything other than abide by the international rules of the road, to honor its obligations, and to take – as said, take actions consonant with their words.  They talk about being a responsible champion of the multilateral system, but their deeds fall far short of that in many, many respects.

So yeah, clearly, if we happen to have some serious disagreements in Anchorage, I’m not very confident that we’re going to be able to persuade the Chinese of the error of their ways and the righteousness of ours just over the course of a couple of hours’ worth of talks.  But I think it is important that each side know where the other does stand.  Over.

SENIOR ADMINISTRATION OFFICIAL ONE:  Yeah, I think put that really well.  The only thing I would just add on that point is that many of the things that China professes are internal matters of concern are of concern to a great number of countries, not just the United States.  And so we see these not just as issues in the bilateral context, but as issues of global concern, and in some cases, growing global concern.  We see that in particular on Xinjiang.  We see that on Hong Kong, where you’re seeing mounting not only condemnation but action by a number of countries to really make clear that China’s violation of international rules, norms, and universal values does have consequences for its relationships and its engagements with other countries.

On the history, I think we’d have to actually take that and get back to you on that, in terms of has a national security advisor and secretary of state ever sat in the room together.  My point is largely in terms of a meeting like this, a standalone meeting like this where there is this kind of configuration.  We’d have to go back and check if there’s ever been a previous instance where one or the other joined them in a meeting in Washington, D.C. or something like that.

OPERATOR:  We will go to the line of Andrea Mitchell from NBC.  One moment, please, while we open your line.  Your line is open.  Go ahead, please.

QUESTION:  When you said you were going to raise – when you said you were going to raise all these issues, can you highlight what you think are the most critical issues that you definitely plan to raise?  And what role will the cyber issue and Microsoft play in any expectations of actions, impending actions against China?

SENIOR ADMINISTRATION OFFICIAL ONE:  Thanks, Andrea.  I’m going to confess that I don’t want to give the Chinese our whole playbook in advance.  So I’m going to save some of the answers of the most important issues that we plan to raise until we can read out things to you guys afterwards.  I hope you’ll be understanding of that.  But obviously, some of the pieces that I mentioned earlier – Xinjiang, Hong Kong, Taiwan, economic coercion of allies that you’re well familiar with, our concerns about China’s actions to impinge on freedom of navigation – it’s taking increasingly aggressive actions with respect to some of those spaces as well, but of course we have concerns about – in the technology space, in the economic space.  So – but we will in our readouts afterwards be able to give you a little bit more of a prioritized sense and a little bit more on maybe the nature of how we’ve raised those things when we’re not going to be tipping our hand quite so much.

But cyber is absolutely an issue that we plan to discuss.  Our U.S. concerns about Beijing’s malicious cyber activity is not new, but it’s a continued and ongoing concern and reports about recent activity only heighten that.  And so this is definitely an issue where I think that we will be making a very clear point about our concerns and I think we’ll have more for you, again, on that after the – after the meeting.

OPERATOR:  For our last question we will go to Paris Huang with Voice of America.  Go ahead.

QUESTION:  Hi, can you hear me?

SENIOR ADMINISTRATION OFFICIAL ONE:  Mm-hmm.

SENIOR ADMINISTRATION OFFICIAL TWO:  Yes.

QUESTION:  So, yes, thank you for doing this.  My question is you talked about before this meeting, United States had talked with allies and partners in Asia and Europe.  So where do you see Russia’s role play in the United States and China relationship?

And also, China have influence over Africa and Latin America as well; for example, the One Belt and One Road Initiative has extended over there as well.  Did the United States talk to the countries over there before this meeting?  Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE:  I’m going to defer – those are largely, I think, areas.  Why don’t I defer to on that.

SENIOR ADMINISTRATION OFFICIAL TWO:  Sure, that’s a great question.  Thanks very much.  And yes, look, the State Department is absolutely practicing the same diplomatic outreach that was referring to with our partners and allies across the globe.  We have been in very, very close contact with capitals in Latin American and Africa, Central and Southeast Asia about all of our common agenda, whether it’s things like addressing the COVID pandemic, climate, and, of course, resisting coercion and aggressive behavior by powers like China and Russia.  So those conversations are global in scope.

You asked about in particular the role of Russia vis-a-vis China.  I mean, neither nor I are Russia experts, but I would say to our colleagues that do cover Russia, in many ways I think Russia poses a similar set of challenges, perhaps not quite on the same scope and scale that China does, but ones that we feel the best way to push back on is by making a common cause, again, with our close allies and partners and making sure that we’re holding them accountable when they take actions that run counter to sort of the international rules of the road, the international system that for seven or eight decades now has helped enable the entire planet to enjoy great levels of peace and prosperity.  So I think probably a question that our Europe colleagues could answer in more detail, but I think the same general approach.  Thanks.  Over.

MODERATOR:  Great.  Thanks, everyone, for joining us tonight, and for our friends in Asia, have a good morning.  Reminder, again, we are on background, attributed to senior administration officials, and with the conclusion of this call, the embargo is lifted.  Thank you.

 

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GAO also obtained, directly from the agencies, spending data, as of July 31, 2020, for the six largest spending areas, to the extent available. To develop the public health indicators, GAO reviewed research and federal guidance. To understand economic developments, GAO reviewed data from federal statistical agencies, the Federal Reserve, and Bloomberg Terminal, as well as economic research. To update the status of matters for congressional consideration and recommendations, GAO reviewed agency and congressional actions. In response to the national public health and economic threats caused by COVID-19, four relief laws making appropriations of about $2.6 trillion had been enacted as of July 31, 2020. Overall, federal obligations and expenditures government-wide of these COVID-19 relief funds totaled $1.5 trillion and $1.3 trillion, respectively, as of June 30, 2020. GAO also obtained preliminary data for six major spending areas as of July 31, 2020 (see table). COVID-19 Relief Appropriations, Obligations, and Expenditures for Six Major Spending Areas, as of July 2020 Spending area Appropriationsa ($ billions) Preliminary obligationsb ($ billions) Preliminary expendituresb ($ billions) Business Loan Programs 687.3 538.1 522.2c Economic Stabilization and Assistance to Distressed Sectors 500.0 30.4 19.2c Unemployment Insurance 376.4 301.1 296.8 Economic Impact Payments 282.0 273.5 273.5 Public Health and Social Services Emergency Fund 231.7 129.6 95.9 Coronavirus Relief Fund 150.0 149.5 149.5 Total for six spending areas 2,227.4 1,422.2 1,357.0 Source: GAO analysis of data from the Department of the Treasury, USAspending.gov, and applicable agencies. | GAO-20-708 aCOVID-19 relief appropriations reflect amounts appropriated under the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116-123, 134 Stat. 146; Families First Coronavirus Response Act, Pub. L. No. 116-127, 134 Stat. 178 (2020); CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020); and Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116-139, 134 Stat. 620 (2020). These data are based on appropriations warrant information provided by the Department of the Treasury as of July 31, 2020. These amounts could increase in the future for programs with indefinite appropriations, which are appropriations that, at the time of enactment, are for an unspecified amount. In addition, this table does not represent transfers of funds that federal agencies may make between appropriation accounts or transfers of funds they may make to other agencies. bObligations and expenditures data for July 2020 are based on preliminary data reported by applicable agencies. cThese expenditures relate to the loan subsidy costs (the loan’s estimated long-term costs to the United States government). The CARES Act included a provision for GAO to assess the impact of the federal response on public health and the economy. The following are examples of health care and economic indicators that GAO is monitoring. Health care. GAO’s indicators are intended to assess the nation’s immediate response to COVID-19 as it first took hold, gauge its recovery from the effects of the pandemic over the longer term, and determine the nation’s level of preparedness for future pandemics, involving subsequent waves of either COVID-19 or other infectious diseases. For example, to assess the sufficiency of testing—a potential indicator of the system’s response and recovery—GAO suggests monitoring the proportion of tests in a given population that are positive for infection. A higher positivity rate can indicate that testing is not sufficiently widespread to find all cases. That is higher positivity rates can indicate that testing has focused on those most likely to be infected and seeking testing because they have symptoms, and may not be detecting COVID-19 cases among individuals with no symptoms. Although there is no agreed-upon threshold for the test positivity rate, governments should target low positivity rates. The World Health Organization recommends a test positivity rate threshold of less than 5 percent over a 14-day period. As of August 12, 2020, 12 states and the District of Columbia had met this threshold (38 states had not). Resolve to Save Lives, another organization, recommends a threshold of less than 3 percent over a 7-day period, and 11 states and the District of Columbia had met this threshold (39 states had not) as of August 12, 2020. GAO also suggests monitoring mortality from all causes compared to historical norms as an indicator of the pandemic’s broad effect on health care outcomes. Mortality rates have tended to be consistent from year to year. This allows an estimation of how much mortality rose with the onset of the pandemic, and provides a baseline by which to judge a return to pre-COVID levels. According to Centers for Disease Control and Prevention data, about 125,000 more people died from all causes January 1–June 13 than would normally be expected (see figure). CDC Data on Higher-Than-Expected Weekly Mortality, January 1 through June 13, 2020 Note: The figure shows the number of deaths from all causes in a given week that exceeded the upper bound threshold of expected deaths calculated by CDC on the basis of variation in mortality experienced in prior years. Changes in the observed numbers of deaths in recent weeks should be interpreted cautiously as this figure relies on provisional data that are generally less complete in recent weeks. Data were accessed on July 16, 2020. Economy. GAO updated information on a number of indicators to facilitate ongoing and consistent monitoring of areas of the economy supported by the federal pandemic response, in particular the COVID-19 relief laws. These indicators suggest that economic conditions—including for workers, small businesses, and corporations—have improved modestly in recent months but remain much weaker than prior to the pandemic. In June and July initial regular unemployment insurance (UI) claims filed weekly averaged roughly 1.4 million (see figure), which was six and a half times higher than average weekly claims in 2019, but claims have decreased substantially since mid-March, falling to 971,000 in the week ending August 8, 2020. Increasing infections in some states and orders to once again close or limit certain businesses are likely to pose additional challenges for potentially fragile economic improvements, especially in affected sectors, such as the leisure and hospitality sector. National Weekly Initial Unemployment Insurance Claims, January 2019–July 2020 Note: See figure 5 in the report. As GAO reported in June, consistent with the urgency of responding to serious and widespread health issues and economic disruptions, federal agencies gave priority to moving swiftly where possible to distribute funds and implement new programs designed to help small businesses and the newly unemployed, for example. However, such urgency required certain tradeoffs in achieving transparency and accountability goals. To make mid-course corrections, GAO made three recommendations to federal agencies: To reduce the potential for duplicate payments from the Paycheck Protection Program (PPP)—a program that provides guaranteed loans through lenders to small businesses—and unemployment insurance, GAO recommended that the Department of Labor (DOL), in consultation with the Small Business Administration (SBA) and the Department of the Treasury (Treasury), immediately provide information to state unemployment agencies that specifically addresses PPP loans, and the risk of improper unemployment insurance payments. DOL issued guidance on August 12, 2020, that, among other things, clarified that individuals working full-time and being paid through PPP are not eligible for UI. To recoup economic impact payments totaling more than $1.6 billion sent to decedents, GAO recommended that the Internal Revenue Service (IRS) consider cost-effective options for notifying ineligible recipients of economic impact payments how to return payments. IRS has taken steps to address this recommendation. According to a Treasury official, nearly 70 percent of the payments sent to decedents have been recovered. However, GAO was unable to verify that amount before finalizing work on this report. GAO is working with Treasury to determine the number of payments sent to decedents that have been recovered. Treasury was considering sending letters to request the return of remaining outstanding payments but has not moved forward with this effort because, according to Treasury, Congress is considering legislation that would clarify or change payment eligibility requirements. To reduce the potential for fraud and ensure program integrity, GAO recommended that SBA develop and implement plans to identify and respond to risks in PPP to ensure program integrity, achieve program effectiveness, and address potential fraud. SBA has begun developing oversight plans for PPP but has not yet finalized or implemented them. In addition, to improve the government’s response efforts, GAO suggested three matters for congressional consideration: GAO urged Congress to take legislative action to require the Department of Transportation (DOT) to work with relevant agencies and stakeholders, such as HHS, the Department of Homeland Security (DHS), and international organizations, to develop a national aviation-preparedness plan to ensure safeguards are in place to limit the spread of communicable disease threats from abroad, while also minimizing any unnecessary interference with travel and trade. In early July 2020, DOT collaborated with HHS and DHS to issue guidance to airports and airlines for implementing measures to mitigate the public health risks associated with COVID-19, but it has not developed a preparedness plan for future communicable disease threats. DOT has maintained that HHS and DHS should lead such planning efforts as they are responsible for communicable disease response and preparedness planning, respectively. In June 2020, HHS stated that it is not in a position to develop a national aviation-preparedness plan as it does not have primary jurisdiction over the entire aviation sector or the relevant transportation expertise. In May 2020, DHS stated that it had reviewed its existing plans for pandemic preparedness and response activities and determined it is not best situated to develop a national aviation-preparedness plan. Without such a plan, the U.S. will not be as prepared to minimize and quickly respond to future communicable disease events. GAO also urged Congress to amend the Social Security Act to explicitly allow the Social Security Administration (SSA) to share its full death data with Treasury for data matching to help prevent payments to ineligible individuals. In June 2020, the Senate passed S.4104, referred to as the Stopping Improper Payments to Deceased People Act. If enacted, the bill would allow SSA to share these data with Treasury's Bureau of the Fiscal Service to avoid paying deceased individuals. Finally, GAO urged Congress to use GAO's Federal Medical Assistance Percentage (FMAP) formula for any future changes to the FMAP—the statutory formula according to which the federal government matches states' spending for Medicaid services—during the current or any future economic downturn. Congress has taken no action thus far on this issue. GAO incorporated technical comments received the Departments of Labor, Commerce, Health and Human Services, Transportation, and the Treasury; the Federal Reserve; Office of Management and Budget; and Internal Revenue Service. The Small Business Administration commented that GAO did not include information on actions taken and controls related to its loan forgiveness program or its plans for loan reviews. GAO plans to provide more information on these topics in its next CARES Act report. For more information, contact A. Nicole Clowers at (202) 512-7114 or clowersa@gao.gov.
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