Back in the heady days of January 2021, the American Rescue Plan allocated $350 billion to assist state and local governments with their budgetary needs.

This always struck me as the most conceptually dubious aspect of ARP, and while it probably didn’t do much to fuel inflation, it’s also kind of a politically perverse waste of money. State governments are mostly controlled by Republicans, so congressional Democrats have created a situation where governors like Ron DeSantis and Greg Abbott can keep their plutocratic base happy with low taxes while also handing out popular goodies to the public while also complaining that Joe Biden and the Democrats fueled inflation with excess spending.

Whatever led Democrats to do what they did,1 state and local governments now have more money than they need or have even used. The White House recently called on state and local governments to invest the money in mental health, addiction treatment, and law enforcement to address crime.

But with revenue forecasts now looking weaker, local governments will likely be reluctant to take on personnel costs with a pot of money that may evaporate. Meanwhile, members of Congress have gotten wise to the possibility of some legislative ability to “clawback” as-yet-unspent Covid-19 relief funds for use as an offset in bipartisan negotiations. That almost happened as part of the Biden administration’s latest funding request for federal Covid-19 programs, except it didn’t come together.

But the idea of the clawback is going to come up again. And if Congress is looking for things to spend this money on, I think it’s worth taking a look at HHS’s Biomedical Advanced Research and Development Authority (BARDA), which has a good track record and could help us get ahead of the next deadly variant or brand new virus.

Pandemics turn out to be very bad

As of the year 2022, internet arguments about Covid-19 policy have morphed into a kind of zombie debate.

Back in 2020, we argued about whether it made sense to put strict non-pharmaceutical interventions (NPIs) in place as we waited for vaccines (my view was generally yes). Then in 2021, we argued about whether it made sense to keep strict NPIs in place even though vaccines were now widely available (my view was generally no). Today, though, we’re not really arguing about either of these things. Instead, there’s a cohort of people who lost the 2021 argument and are mad about it and who every few days pop off with some version of “but what about the immunocompromised?” or “what about Long Covid?” or “the pandemic isn’t over yet!” but don’t really have much in the way of real prescriptions.

I’m sort of hopeless that this will happen, but here are two things that I would like to see people acknowledge:

Covid doves should acknowledge that however annoyed they may be by Dr. Fauci or epidemiology Twitter, it’s factually true that the global spread of the SARS-CoV-2 virus was really bad, and people are entitled to feel upset about it. For example, while we know Covid-19 primarily kills the elderly, so does virtually everything else in life, and in 2021, Covid-19 appears to have been the leading cause of death for Americans under 55. That’s bad.
Covid hawks should acknowledge that however annoyed they may be by Ivermectin fiends or hard-core denialists, interventions with very high costs (closing schools) or very low benefits (laxly enforced2 mask mandates that can be met with ineffective cloth masks) are not actually improving anything.

The mindset I have been trying to cultivate in my personal life is “vaxxed and relaxed,” but the mindset that we need as a society is what I’ve called “taking the L.” In other words, the virus spreading globally out of control and then mutating to such a high level of infectiousness is, in fact, really bad, but there’s not much we can do about it now. I strongly recommend reading what former New York City public health chief Jay Varma recently wrote in the Atlantic about the need for public health academics to reconcile themselves to things like the existence of public opinion and electoral democracy. It is true that if everyone had the same values, preferences, and worldviews as public health academics, public health outcomes would improve. But they don’t, and we need to make public policy in the real world.

And in the real world, making investments in technological solutions like new vaccines and new therapeutics to get ahead of new problems before they happen is of very high value.

BARDA is very good

Operational Warp Speed was very successful and also reflective of Donald Trump’s longstanding skill in the field of branding. But it wasn’t a new government program.

It was a White House interagency group with a dedicated guy in charge — a “czar” in the normal parlance of interagency groups. A bunch of different agencies were involved, and a $10 billion appropriation from the CARES Act went into actually doing the work. If you look at the mRNA vaccines, the Pfizer vaccine was developed outside of the Warp Speed auspices. But Moderna, a startup that didn’t have the same kind of deep pockets, did its work courtesy of a half-billion dollars from BARDA. This is to say that while I’m sure many agencies contributed usefully to the success of Operation Warp Speed, I think the main thing people have in mind when they praise OWS is the successful funding of vaccine research, and that was basically a BARDA show.

This is not a huge surprise, because this is basically what BARDA — which was created in the 2006 Pandemic and All-Hazards Preparedness Act — is for.

And that’s not the only success story. After the 2014 Ebola outbreak in West Africa, the Obama administration got money into BARDA to develop countermeasures.3 Over the course of 2019 and 2020, that paid off in the form of a rapid antigen test, a vaccine, and two therapeutic medications. It wound up not getting much attention between the handover of administrations and Covid-19 sucking up all the atmosphere, but this was a pretty incredible success. Ebola is much less contagious than Covid-19 but also much deadlier, and the underlying environmental drivers of Ebola outbreaks haven’t improved at all. Absent these pharmacological breakthroughs, it’s extremely plausible that we’d have more and more outbreaks and that eventually one of them might even spread globally.

So why is BARDA so good?

One key reason is that the agency is authorized to use Other Transaction Agreements (previously seen in this post on defense procurement) rather than standard government cost-plus contracting. Cost-plus is fine when the thing the government is acquiring is a standard item that exists in the world, but it’s very bad at spurring private sector innovation, which is from where these major BARDA wins have come. Free markets have a lot of virtues, but there is a lot of stuff in the biomedical zone for which there just isn’t adequate consumer demand. Ebola vaccines have tremendous social value, for example, but the countries impacted are too poor for this to be a big sales winner.

Nikki Teran, in her pro-BARDA writeup for the Institute for Progress, offers the even sharper example of smallpox. There is basically no market for smallpox countermeasures because nobody gets smallpox. But the virus is sitting around in a Russian freezer, and if it gets out, we’ll be glad BARDA has helped shepherd two smallpox antivirals and a next-generation smallpox vaccine through development.

This is a small agency, and an additional billion or three could make a huge difference in terms of our preparedness.

New variants keep happening

Omicron is so transmissible that SARS-CoV-2 is now just constantly ricocheting around the world. This is tolerable both because vaccination and prior infection give decent protection against the virus, and because we now have effective therapeutics that are increasingly available. But the downside of the constant bouncing around the world is that the virus has more and more opportunities to mutate.

Eric Topol writes that the latest new variants seem to offer considerable capacity to evade immunity, meaning the coming winter wave may be similar in severity to the Omicron winter rather than the situation we hoped for where waves diminish in amplitude.

The sad reality is that as bad as Covid-19 is, it’s not really deadly enough to ever burn itself out. It’s also not mild enough to be “just the flu” and is additive to flu’s burden of disease rather than substituting for it. It’s also of course possible that new variants will emerge that are deadlier.

To get out of this cycle, we’re going to need to develop a more general vaccine. Ideally, that means one that targets the shared properties of the entire coronavirus family and gets out of playing whack-a-mole with variants. There are also important ongoing lines of research into vaccines you would take as a nasal spray rather than a shot. I suspect needlephobia plays a much larger role in vaccine refusal than anyone wants to squarely admit, but a bigger issue is that nasal vaccines could potentially be much more effective at blocking the transmission of the virus, which right now is often able to colonize people’s noses and create mild cases that keep bouncing around making it harder to achieve true sterilizing immunity. There are lots of different agencies and groups around the world with a role to play in doing that science and bringing the products to market. But BARDA has been America’s MVP for developing public health technology and deserves to be high on the funding priority list.

Everything comes back down to innovation

Ultimately, I get that neither party’s coalition really wants to prioritize this kind of thing.

Democrats have an extremely long list of interest group priorities that they would like to fund, while Republicans love their tax cuts. But without slighting the merits of supporting the defense of Ukraine, if we can spare $40 billion to help Ukrainian soldiers kill Russian soldiers, we should be able to find the money to save the world from pandemic diseases and try to actually put Covid-19 behind us.

At the end of the day, only more and better biomedical innovation is going to give Covid hawks what they want.

But even for the Covid doves, I think there’s sometimes a tendency to act as if government rules were the only source of Covid-cautious behavior. The reality, though, is that if we keep having big waves, we’re going to keep having lots of problems. During the Omicron surge, D.C. temporarily re-imposed a mask mandate but otherwise didn’t close anything. There were still lots of kids who missed days of school because teachers were out sick. A lot of restaurants lost business and some even had days they had to close because too many of their staff were out. The labor force participation rate for older workers remains depressed, and that continues to be a problem for the broad economy.

It’s ridiculous that the ARP spent $1.8 trillion and yet did not adequately fund biomedical research. But the state and local clawback mechanism provides an opportunity to rectify that mistake, and we should take it.

1

I don’t know why Democrats did what they did. My Senate sources blame Nancy Pelosi, but my House sources blame Chuck Schumer; the leadership says they were just doing what the White House asked for, but the White House says they were just following leadership’s cues. I keep hoping that at some point the really good reporters will stop publishing tell-all Trump books and do a tell-all Biden book and figure out what happened here.

2

The great under-appreciated irony of 2020 is that progressives simultaneously took a sharp move to be much more skeptical of heavy-handed enforcement of rules while also wanting a bunch of new rules.

3

In retrospect, they probably should have come up with a cool name like Operation Warp Speed.

Slow Boring

Let's use unspent Covid funds to make great…