Conservative Think Tank Floats Free-Market Fixes for Coronavirus

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May 5, 2020

The Heritage Foundation on Tuesday announced a proposal for a distinctly free-market approach to restarting the country amid the coronavirus outbreak.

The plan, assembled by the National Coronavirus Recovery Commission—a blue-ribbon panel of lawmakers, businessmen and women, and policy experts assembled by Heritage to respond to the crisis—and reviewed by the Washington Free Beacon, provides recommendations for all levels of government, as well as private and civil society actors. Among other proposals, it calls for widespread deregulation of the medical industry and an emphasis on free trade to restore the economy post-crisis.

Heritage's approach contrasts sharply with other end-of-lockdown plans, which have tended to call for massive federal mobilization to combat the crisis. Many such plans demand that the country be able to administer tens of millions of coronavirus tests a day prior to reopening. That makes the Heritage plan—which proposes subtler changes that can be implemented right now—either less ambitious or more realistic, depending on how one views it.

The promise of a realistic path to reopening may be appealing to state governors from California to Georgia now bringing their economies back on line. It may also be of interest to the White House, as President Donald Trump seeks a quick reopening to shore up his chances in November. At the same time, Heritage's emphasis on free trade, in particular, may put the think tank at odds with lawmakers who see the coronavirus as an instigator of bigger change, especially those increasingly skeptical of offshoring.

The plan released Tuesday offers two new "phases" of reopening, which add to the commission's preexisting phase one and two, released early in April. Phase three calls on state, federal, and private actors to increase understanding of and ability to fight the virus as the economy comes back on line.

While other plans seek to add new laws or federal apparatuses to this end, Heritage's focus is more on trimming regulations holding back progress. The plan calls on states, for example, to allow interstate recognition of medical licenses, while the executive branch would implement a comprehensive regulatory review at the CDC, FDA, and other departments.

The plan also proposes a major role for private sector actors, including pushing the federal government to consider giving university labs more freedom to test, and encouraging civil society actors to work to support vaccine development and distribution.

Although the phase three proposal does push for more testing, it differs from other plans by not calling for the United States to conduct a target number of tests per day to reopen. Rob Bluey, a spokesman for the Commission, told the Free Beacon that while the commission does want more testing—and advocated for it in earlier phases as well—it thinks the goal of universal access is not the most expeditious or effective approach: "We're not going to be in a situation any time soon where we're going to be able to test every American every single day."

After the scientific advancement phase, Heritage emphasizes the need to "establish U.S. leadership in economic recovery," which in practice means reestablishing trade and access to international supply chains cut off by the crisis.

In phase four, states are encouraged to work to bring "international business activity" back to their markets and ensure the integrity of the food supply chain by prioritizing test access. The federal government is called upon to lift tariffs, create new free trade agreements with allies including the United Kingdom, and commit to zero tariffs or export controls on medical supplies, pharmaceuticals, and food products during and after the pandemic.

This free-trade focused approach, Bluey said, was inspired by the Commission's belief that "there's no greater system that's going to lift people out of this like free markets." But it's likely to be controversial among some on Capitol Hill who have seen the coronavirus as a sign that America needs to repatriate vital industries.

Bluey emphasized that Heritage's goal is to balance concerns about dependence on China with a commitment to free trade, and the plan does include calls for the federal government to "evaluate concerns" about reliance on the PRC for medical supplies and rare earth minerals. That's a far less tough stance, however, than that taken by China hawks like Sen. Josh Hawley (R., Mo.), who in a Tuesday op-ed called for the abolition of the World Trade Organization—a move at odds with Heritage's proposal.

That disagreement raises questions about whether Heritage's distinctly soft-touch approach to resolving the crisis will curry as much favor as the venerable organization might hope. Some lawmakers, President Trump in particular, are likely to be drawn to a plan that does not call for a total transformation of the country before Americans can go back to work. But that same quality may lose the plan support among politicians, left and right, who are looking to use the crisis to generate bigger, structural change.