Trump stumbles in first efforts to control virus response as fear spreads and markets fall

Fears over the coronavirus had escalated while he was abroad, setting off a chain reaction of concern and criticism, including a stock market sell-off that had erased more than $1.5 trillion in wealth over the prior two days -- a dangerous sign for the US economy and Trump's reelection prospects.

On the way back to the White House, Trump decided it was time to take the reins himself: he would hold a news conference that evening, confident in his ability to bend the public narrative to his will.

Yet as the day went on, and plans for the news conference came together, uncertainty reigned.

By 4:30 pm, the jet-lagged President had only just come down to the Oval Office from the residence, and to the assembled officials who were there, it was still unclear what he intended to say at the news conference, which was just two hours away, said one senior Republican who was in the White House.

Earlier in the week, Trump had privately told allies he was close to taking the coronavirus response efforts out of the hands of Health and Human Services Secretary Alex Azar, two sources familiar with the matter said.

Despite denials from the White House that he was considering replacing Azar with a "czar" to lead the federal response, when Trump stepped up to the lectern in the White House briefing room, that's effectively what he did by putting Vice President Mike Pence in charge.

The Pence decision was made shortly before the news conference and came as a shock to Azar, according to a senior Republican official. Pence, a frequent defender of Azar during his rocky relationship with the President, had agreed to step in, though there didn't appear to be much of a choice. Senior people who work for the vice president were caught by surprise by the announcement, according to one official who spoke to CNN.

For weeks, some of Trump's aides and allies have tried to impress upon him the seriousness of the coronavirus situation, warning him of the threat to the global economy and -- by proxy -- his reelection prospects, according to people familiar with the conversations.

Motivated by devastating losses on Wall Street, Trump finally decided to heed that advice. Yet it's unclear how much it helped.

His instincts led him to downplay the seriousness of the threat once again on Wednesday, undermining the predictions of his own top health officials standing behind him, and fueling concern over his administration's ability to coordinate a response to a complicated problem.

The financial fallout has also gotten worse.

The markets provided an initial verdict on Trump's performance Wednesday; Dow futures moved from positive to negative during the news conference. Markets opened deep in the red on Thursday. By the time the market closed that afternoon, the Dow had dropped an additional 1,191 points, bringing the total amount of wealth erased over the past week to more than $2 trillion.

Congressional Republicans who were already fretting over the White House response to the coronavirus were left scratching their heads.

One House Republican told CNN the falling stock market "was the only metric you needed to look at to see how poorly that was handled."

"We trust the President, but we really trust the President's experts. It would be a lot better if publicly they were more aligned," the member said.

Biggest governing challenge

Interviews with more than 20 sources across Washington -- including lawmakers, White House officials, health experts and diplomats -- paint a picture of deep concern over the widening coronavirus outbreak and the Trump administration's readiness to handle the crisis.

As recently as last week, Trump was telling confidants that he doesn't foresee the virus making a big impact in the US. And on Wednesday he repeated his belief that it could be slowed by warmer weather, despite no evidence to support the claim.

Now the White House is confronting what some officials describe as the biggest governing challenge of Trump's presidency. Mindful that a botched response would spell potential political ruin, efforts have scaled up rapidly in the past several days, and one official said the response was nearing an all-consuming endeavor.

For the past month, there have been daily coronavirus meetings in the White House Situation Room. Yet it's unclear how effective they have been.

One person familiar with the discussions said the attendees at the meetings were often at a loss for how to solve the problems associated with the coronavirus, and for weeks were focused primarily on ways to prevent anyone infected or definitively exposed to the disease -- including American citizens -- from traveling to the US.

Officials have delivered topline numbers and broad-strokes information about the outbreak without delving into nitty-gritty specifics, a person familiar with the matter said, believing Trump to be uninterested in deeply detailed updates.

Some officials have blamed the cursory briefings for a breakdown in communication that has led to bursts of outrage by the President, who has complained he's been kept out of the loop on key decisions regarding potentially infected Americans returning to the US.

There is evidence things are improving. Speaking to CNN on Thursday, one government official working with the White House on its coronavirus response said, "There has been a sea of change since yesterday," noting that the situation had gone from zero communication to multiple conversations on Thursday.

This official noted that while the White House still didn't seem to have a full communications plan in place, it was reaching out to get an understanding of what was needed, including giving regular updates on travel.

State Department officials remain on edge, given how unpredictable Trump is and that he is a known germophobe, according to a source familiar with the situation. Some predict he will suddenly make a rash decision, such as barring incoming flights with people who could be infected.

Some US diplomats stationed overseas in countries where there are coronavirus cases are asking to come home, two sources say.

Pence effect

Several people close to Pence fear that his appointment could spell political disaster for the vice president, putting him in an impossible position given health experts' warning that the virus will spread more in the US before the situation improves.

"Trump put Pence in because he thinks Pence will f--- it up," a Trump adviser said, describing some of the fears already being expressed by people close to the vice president.

But one GOP official noted Pence has credibility on Capitol Hill, a factor that could settle anxious lawmakers. "I think people trust Pence," the official said.

Another GOP official said Pence was a poor choice to lead the response, given his track record in Indiana with an HIV crisis. The source also said the President should've put someone with medical experience in charge.

It's unclear whether Pence, who has numerous campaign-related events in the coming weeks, will remain in Washington to coordinate or keep his campaign schedule.

On Thursday, Pence made a few additions to the Coronavirus Task Force, including economic adviser Larry Kudlow and Treasury Secretary Steven Mnuchin. He also appointed Deborah L. Birx as White House coronavirus response coordinator.

Birx, an American physician and diplomat who serves as ambassador-at-large and as US global AIDS coordinator, was appointed to her current job during the Obama administration. According to a source familiar with her situation, Birx was able to develop a close relationship with the Trump White House, in part because a Trump campaign official, Matt Mowers, became her chief of staff and remained in that role for almost two years.

Birx has overhauled the HIV strategy for the Trump administration, and in 2018 she and Pence developed a relationship when she spoke at the World AIDS Day event at the White House.

Birx did not ask for this job -- the White House came to her, sources said.

Continued economic impact

The animating fear for Trump will likely be the continued economic fallout from the coronavirus. The economy has slowed with each successive year of the President's term, as his tax cuts have failed to sparked sustained business investment and his trade war has inhibited it. That places the economic expansion at the mercy of consumers and their continued confidence.

The peril for Trump is that the coronavirus could yet tip the economy into recession. Mark Zandi, chief economist at Moody's Analytics, currently puts odds of a 2020 recession at even money but says it would become probable if the crisis swells to a global pandemic.

An American president has not sought reelection during a recession since Jimmy Carter in 1980. Carter lost in a landslide to Ronald Reagan.

Whether Trump understands the magnitude of that risk in unclear. If inveterate optimists on his team, like Kudlow, haven't warned him of that, one senior White House official expressed hope that outside voices can.

"Such warnings are on TV all the time," the senior official said, "so I imagine he's picked that up."