Government Upset Over H1N1 Vaccine Shortage

November 18, 2009

ABC News

By Kristina Wong

The Obama administration has ratchetted up demand for H1N1 flu vaccine, without sufficient supply to meet that demand, two senators charged in a letter to the Department of Health and Human Services.

People gather around an information table as they read about the H1N1 swine flu as hundreds of…
People gather around an information table as they read about the H1N1 swine flu as hundreds of people wait in line for the free vaccine at the Downey Theatre in Downey, Calif., Tuesday, Oct. 27, 2009. The city of Downey, together with the Los Angeles County Department of Public Health, is hosting a free flu shot clinic primarily and only for people who are between 6 months and 24 years of age, pregnant women, people with chronic health problems, health care workers, and people who care for infants

Sen. Joe Lieberman, I-Conn., chairman of the Homeland Security and Governmental Affairs Committee, and ranking member Sen. Susan Collins, R-Maine, issued the letter to HHS Secretary Kathleen Sebelius, demanding answers as to why the department “insisted on promoting a plan for which the federal government did not have anywhere near sufficient resources to implement.”
The letter, dated Nov. 16, argues that the primary problem is not the pace of vaccine development or the amount of vaccine developed thus far, but the mismanagement of public expectations about who could expect to receive the vaccine, and when.

“This problem was created in part by HHS’s decision to promote vaccination of an initial target group that represents almost half the U.S. population; 160 million people,” the senators wrote.

“The glaring discrepancy between the demand for and supply of H1N1 vaccine in our country has resulted in pregnant women standing in line for hours, only to find no vaccine at the end,” the letter said. “This shortage of vaccine has left many parents of children in high risk groups scrambling, often in frustration, to find the vaccine the government has told them that they need.

“The fact is the response failed to meet the public demand for vaccine — demand that the federal government accelerated by advising a larger group of the public to be vaccinated than it had the resources to meet,” the senators wrote.

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U.S. Issues $7 Trillion Debt, Supply to Stabilize

September 23, 2009

Yahoo! News

By Burton Frierson

The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.

Though markets and the economy are improving, efforts to provide a firm foundation for recovery will require increases to the U.S. Treasury’s conventional bonds going forward, as well as debt securities that are indexed to inflation.

However, this expansion may take place in an environment where investors consider leaving the safe-haven Treasury market for riskier assets, and debt issuance is likely to level off mid next year, said Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan.

“In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance — that’s in a 12-month period,” Ramanathan told a financial markets conference in New York.

“This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year,” he added.

DEMAND TO WANE

The heavily-indebted U.S. government has seen tremendous demand for Treasury debt securities this year due to a flight-to-quality into the safe haven assets.

However, Ramanathan said some of this demand would begin to taper off and investors were likely to favor other sectors as the financial markets recovery continues.

“Rather than being discouraged by this move to more risky assets we should actually be encouraged,” he said. “It is the natural progression from the state we were in last year.”

The collapse of Lehman Brothers investment bank in September 2008 sparked the massive migration toward safe-haven assets, though the stock market has been in a remarkable rally since the spring.

Investors have also returned in numbers to the corporate debt market, which suffered during last year’s turmoil.

There is still a long way to go toward market and economic stabilization but good progress is taking place, Ramanathan said, adding that officials were no longer focused “on LIBOR/OIS spreads on a daily or hourly basis.”

“We still have a long way to go and…there are going to be bumps along the way, but at least we’re seeing the signs of traction,” he added.

The LIBOR/OIS spread is a market measure that reflects the difference between the cost of so-called risk-free borrowing, such as that done by the U.S. Treasury, and lending to the private sector, which is normally considered less safe.

LONGER MATURITIES?

When asked whether the Treasury would consider offering a longer maturity bond in the future, Ramanathan said, “We are content with our current suite of securities.”

The Treasury’s longest maturity is the 30-year bond.

However, issuance will increase in the near term, as has been the case all year.

“Going forward we expect to increase both nominal and inflation indexed coupon issuance incrementally and gradually over the next nine months to extend the average maturity of the debt,” he said.

Due to structural changes in the budget deficit, Ramanathan said he expected the average maturity of the debt to stabilize at six to seven years, exceeding historic averages of five years.

However, he said he expected coupon debt securities, or the bonds Treasury issues, to stabilize next summer and potentially go down toward the end of next year.

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