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Bottlenecks wear down world economy’s fleet of container ships (nationthailand.com)

Bottlenecks wear down world economy’s fleet of container ships

InternationalDec 23. 2020Gantry cranes sit idle at a Hanjin Shipping Co. container terminal in Long Beach, California. Photographer: Tim Rue/Bloomberg 

By Syndication Washington Post, Bloomberg · Brendan Murray

Container shipping, the backbone of the global trading system, is showing signs of fatigue as the pandemic descends into its darkest days.

Carriers reaping the biggest profits in at least a decade are struggling to operate reliably as bottlenecks worsen around ports from southern England to Shanghai, contorting supply chains for everything from car parts to cosmetics and medical equipment.

Just 50.1% of container vessels arrived on time in November, down from 80% a year earlier and the lowest level in records dating to 2011, according to a service reliability index compiled by Copenhagen-based Sea-Intelligence. From Asia to North America, on-time arrivals dropped below 30%, less than half the long-run average globally.

Delays can add costs, induce operational headaches and restrain revenue for the shippers of cargo — companies like Costco Wholesale Corp. The Issaquah, Wash.-based chain of 803 warehouse-size stores on four continents expects the situation involving container shortages and late deliveries to persist for a few more months.

“There are instances of 50% or 100% or even more sales increases of an item, and if we could procure more we’d have even higher sales,” Richard Galanti, Costco’s chief financial officer, said on a conference call earlier this month. “We’re managing through it, and expect relief not until March or so of 2021.”

Slowly clogging up since September, the main artery for trade between China and the U.S. is still choked. Anchored off the coast of California over the weekend were almost 20 container ships waiting to offload at Los Angeles and Long Beach, up from about a dozen at the end of November. The Port of L.A. expects to handle 152,000 inbound containers this week — a 94% increase from the same week a year ago.

Weston LaBar, the CEO of the Harbor Trucking Association in Long Beach, last month expected container volume through the L.A. ports would stabilize by mid-February, when Chinese factories typically shut down for Lunar New Year. “Now we’re hearing already about a lot of bookings through June and July,” he said.

Alan Murphy, CEO of analysis and data provider Sea-Intelligence, cautions that the current imbalances in containers are concentrated in North America and says the strength of demand probably won’t be sustained if coronavirus vaccines enable U.S. consumers to quickly shift spending back to services like travel and hospitality.

The shipping disruptions should calm down in the first half of 2021, Murphy says, but don’t expect the container liners to make their overcapacity mistakes of the past, which included underbidding in freight rate contracts to below break-even levels.

“The game has changed fundamentally — not because of coronavirus but because of how the carriers responded,” he said, referring to a sharp reduction in sailings in the pandemic’s early months. “They are now capable of tailoring their supply to the available demand at a tactical level that they’ve never been able to do before.”

That’s what worries freight forwarders and other shippers, and the concerns extend beyond the troubles in the Pacific. The European Shippers’ Council, a Brussels-based group representing cargo owners, is crying foul about “degraded services” and surcharges, and wants the European Commission to look into the market dynamics.

The main sticking point: Spot rates to transport goods, which typically fade in the final weeks of the year, are still soaring despite the service disruptions. The rate to ship a container of goods from China to Europe jumped 17% last week, tripling from a year ago to more than $4,400, according to Hong Kong-based Freightos, an online shipping marketplace.

“Of course we want the shipping lines to be healthy,” said Jordi Espin, the council’s policy manager for maritime transport. “However, to make these kinds of profits when we’re in pandemic rescue mode, we don’t think it’s fair.”

Rolf Habben Jansen, CEO of German container line Hapag-Lloyd AG, said in a Bloomberg Television interview on Tuesday that he expects freight rates will remain strong at least for the first quarter. While he expected some easing of the market going into the second quarter, he said visibility that far out is low.

Shippers and container liners are always sparring over prices and reliability. But the pandemic has spotlighted the upper hand the liners now have after a decade of consolidating and forming alliances among themselves, said Olaf Merk, head of ports and shipping at the Paris-based Organization for Economic Cooperation and Development’s International Transport Forum.

“That is something that the competition authorities will have to look at, I think, and some are also doing it now,” Merk said, referring to the U.S. Federal Maritime Commission’s investigation into the carriers’ role in American port congestion. “The situation in which we are now gives a lot of possibilities to the carriers to coordinate capacity and that of course increases the risks for shippers.”

The world’s top container line, Copenhagen-based A.P. Moller-Maersk A/S, this month called the challenges “the most dramatic stress test of the past 75 years.” Other industry representatives say there are multiple reasons on land why the system is straining, like trucker shortages, surging e-commerce purchases or Brexit stockpiling.

Stuffed with 20%-30% more cargo than it’s used to handling, the pipeline is bound to face some snarls.

“Even with this covid cargo crunch that we’re now in the middle of, things continue to move,” said John Butler, president of the World Shipping Council in Washington, which counts the big liner companies among its members. “When you so significantly overload the system, it doesn’t immediately snap back.”

Butler dismissed the notion that the industry lacks competitiveness, calling it “cutthroat frankly.”

Meanwhile, shares of Maersk are flirting with an all-time high and the industry more broadly banked profits of $5.1 billion in the third quarter, a fourfold increase from a year earlier. With a solid fourth quarter, the cumulative red ink of the past five years will become net profitability, according to figures compiled by John McCown, a container-industry veteran and founder of Blue Alpha Capital.

He said the pandemic gave the container carriers a lesson about how to hold firm on capacity as they shift into a longer-term period of slower demand growth.

“It’s been a major learning experience about having more control over their destiny,” McCown said. “But it’s not been without its struggles.”

Among the turmoil of 2020: overworked mariners and cyberattacks. But one of the more remarkable events happened on Nov. 30, when the Japanese-flagged ONE Apus hit rough seas sailing from China to the U.S., sending more than 1,800 containers overboard.

The ship and crew returned safely to Kobe, Japan, but the incident probably doused some shipper’s hopes of ending a turbulent year with a bang: 54 containers that plunged into the water were filled with fireworks.

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U.S. adds over 100 Chinese, Russian companies to military list (nationthailand.com)

U.S. adds over 100 Chinese, Russian companies to military list

InternationalDec 23. 2020

By Syndication Washington Post, Bloomberg · Nick Wadhams

The U.S. Commerce Department added more than 100 Chinese and Russian companies to a new list of firms it says have links to their nations’ militaries, a move that will sharply curtail certain types of exports.

The list of 58 Chinese and 45 Russia companies means anyone seeking to sell items that could eventually be used for military purposes to those firms will need a license, the Commerce Department said in a statement on Monday.

Among the biggest names were seven subsidiaries of Aviation Industry Corp. of China Ltd. and Russia’s Foreign Intelligence Service, or SVR, which has been implicated in a recent cyber-attack on U.S. federal agencies and companies.

“The Department recognizes the importance of leveraging its partnerships with U.S. and global companies to combat efforts by China and Russia to divert U.S. technology for their destabilizing military programs,” Commerce Secretary Wilbur Ross said in the statement.

The move comes amid a continuing erosion of U.S.-China ties during the U.S. presidential transition, as President Donald Trump ratchets up actions targeting Beijing over issues from its tightening control over Hong Kong and treatment of Muslim minorities to exports of 5G technology.

That push has included putting greater scrutiny on companies that the U.S. says are are owned or controlled by China’s military. Earlier this year, the administration listed 31 Chinese companies for being tied to the People’s Liberation Army. Those companies included Huawei Technologies Co. and Hangzhou Hikvision Digital Technology Co., as well as a number of state-run enterprises.

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Google helps birth two social media unicorns in rapid succession (nationthailand.com)

Google helps birth two social media unicorns in rapid succession

InternationalDec 23. 2020A man wearing a protective mask looks at a smartphone while leaning against a mural at Khan Market in New Delhi on Dec. 16, 2020. MUST CREDIT: Bloomberg photo by T. Narayan. 

By Syndication Washington Post, Bloomberg · Saritha Rai

Google investments helped create India’s two youngest technology unicorns: a pair of startups that feed personalized news and entertainment to the world’s fastest-growing smartphone population.

Glance, which feeds news and sports scores to phone-lock screens , is said to have reached a valuation of more than $1 billion after completing a funding round led by Google. And VerSe Innovation, the studio behind the popular Dailyhunt news site and TikTok-like Josh app, said it passed that threshold after winning more than $100 million from Alphabet Inc.’s search giant and Microsoft Corp.

Google and its American internet peers are steadily amping up their investment in India, latching onto the only other country with a billion-plus population after getting shut out of China. From Amazon.com to Facebook, they’re hoping to get in on the ground floor of what they envision as a smartphone and online commerce boom that could eventually create a market to rival the world’s No. 2 economy.

The online search leader has struck an alliance with Mukesh Ambani’s Reliance Industries to invest $4.5 billion and cooperate on technology initiatives including the development of affordable mobile phones. But they’re also teaming with smaller outfits to target more local audiences.

“In the last two years alone, 100 million new internet users have come online from rural India,” Google Vice President Caesar Sengupta wrote in a blog post Tuesday, announcing its investment in VerSe. “But many of these internet users continue to have trouble finding content to read or services they can use confidently, in their own language.”

Of the two, Bangalore-headquartered Glance Digital Experience is the more nascent outfit. It’s the second unicorn to emerge from the group that created InMobi, a cloud marketing platform that became India’s earliest tech startup to reach the milestone. That group was founded by 43-year-old Naveen Tewari, alumnus of the prestigious Indian Institute of Technology and the holder of an MBA from Harvard Business School. On Tuesday, his 18-month-old firm announced it had scored $145 of investment from Google and billionaire Peter Thiel’s Mithril Capital.

Glance currently has 115 million daily active users who average 25 minutes on the app each day. The app operates only in the Android ecosystem and has partnered with leading device makers including Samsung Electronics Co., Xiaomi Corp., Oppo and Vivo.

By partnering with Google, the company plans to take its product to the rest of Asia and launch in the U.S. — where it will team up with carriers — and South America in 2021, Tewari said. Glance is currently focused on acquiring users and has just begun experimenting with advertising-based monetization models, according to Tewari.

Google also joined Microsoft and Alphawave in a financing round for VerSe, whose Dailyhunt is already a landing spot for more than 300 million users in a choice of 14 local languages. Sofina Group and Lupa Systems also took part.

Goldman Sachs and Sequoia Capital India are among VerSe’s other investors. VerSe says it plans to scale up Josh, broaden its content creator ecosystem and develop artificial intelligence and machine-learning technology to help it capture an ever wider audience. It will also explore potential moves beyond its home borders in other international markets that exhibit a need for vernacular content.

Josh is tailored to its home nation and available in a variety of local languages, touting it’s “Made in India” at a time when its rival TikTok and dozens of other China-made apps have been banned over privacy and national security concerns. The app has quickly accrued an audience of 77 million monthly active users and now accounts for over 1.5 billion video plays per day, according to a company statement.

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Tucked into Congress’ massive stimulus bill: tens of billions in special interest tax giveaways (nationthailand.com)

Tucked into Congress’ massive stimulus bill: tens of billions in special interest tax giveaways

InternationalDec 23. 2020

By The Washington Post · Yeganeh Torbati

WASHINGTON – Congress on Monday unveiled a 5,593-page spending bill and then voted on it several hours later, with lawmakers claiming urgent action was needed to rescue an ailing economy ravaged by the coronavirus pandemic.

But tucked in the bill was over $110 billion in tax breaks that strayed far from the way the bill was marketed to many Americans. These giveaways include big tax cuts for liquor producers, the motorsports entertainment sector and manufacturers of electric motorcycles.

These measures, added onto the broader spending bill, are known as “tax extenders” – tax breaks targeted at specific, sometimes niche industries. And routinely extending these “temporary” measures has become something of a year-end tradition, despite loud complaints from some lawmakers who allege the votes largely benefit special-interest groups who stand to gain financially from the outcome.

These tax extenders are designed to be temporary but are frequently renewed, often at the urging of industry lobbyists, and done so during late-night votes at the end of the year. (The Senate vote Monday took place shortly before midnight.) The Joint Committee on Taxation estimated the extenders benefiting industry and special interests included in the stimulus bill would cost over $110 billion over 10 years.

Tax experts and good governance advocates have criticized such short-term tax relief extensions, arguing they hide the true cost of the cuts and advantage industries with the most well-connected lobbyists.

“They are a gravy train for members and lobbyists, who repeat the same exercise every year or two,” Howard Gleckman, a tax policy expert at the Urban Institute, said in an email. “The lobbyists get to keep billing hours. The members get campaign money from the same people. Many of these are classic special interest tax breaks that do not benefit the overall economy in any way.”

The federal government collected $3.4 trillion in taxes in the 12 months that ended Sept. 30, but it typically allows more than $1.5 trillion in annual tax breaks, according to the Committee for a Responsible Federal Budget. Some of these are locked into the tax code. Others, however, were initially designed to last only a year or two but continue winning extension after extension because of intense lobbying.

President-elect Joe Biden has been critical of the plethora of tax giveaways, but he will find that both Democrats and Republicans have been steadfast in their supportive of certain tax breaks. And to win passage each year, the tax breaks are bundled together into one package for votes to draw maximum support.

The enormous new bill packages together emergency economic relief, government funding and tax cuts. The economic relief component of the bill is worth around $900 billion. The legislation included a slew of provisions that had nothing to do with coronavirus relief or funding the government, including many of the tax extenders.

One measure, for instance, makes permanent a cut in excise taxes for producers of beer, wine and distilled spirits, which first became law in 2017 as part of the Republican-led tax cut package. The cuts were due to expire without congressional action, and the alcohol industry had pushed hard for their renewal, arguing that their businesses had been decimated by the pandemic. The industry has supporters among both Democrats and Republicans in Congress, who in turn pushed their leaders to include a bill making the cuts permanent “in the next appropriate legislative package.”

Anheuser-Busch, the Distilled Spirits Council, Bacardi North America and the Brewers Association all lobbied Congress in recent months on the excise tax issue, lobbying records show.

“I wrote this law for one purpose: to help small brewers and wineries and everybody in this space because the rules, the regulations, and the taxes were practically from Prohibition,” Sen. Ron Wyden, D-Ore., said in an interview.

The excise tax cut has won praise in some corners. An analysis by the Progressive Policy Institute published last month argued that the cut helped fuel an expansion in brewery employment, a rare bright spot amid overall U.S. manufacturing decline.

Another extension, of a tax credit aimed at helping the wind industry, sparked impassioned speeches Monday night as the Senate debated the bill. Sen. John Hoeven, R-N.D., introduced an amendment to strip the credit from the bill and was backed by Republican colleagues Kevin Cramer of North Dakota and James Lankford of Oklahoma. They argued that the credits benefit a mature industry that doesn’t need the extra help, and that its benefits and harms had not been fully debated by lawmakers.

Lankford said the wind production tax credit was a “zombie” that legislators had agreed years ago should be ended, only for it to be resurrected by lobbyists. Cramer called the credit a “market-destroying atrocity,” and called for an end to all tax extenders.

“Let them all expire,” Cramer said. “K Street wouldn’t like it, but it would be one less section in this giant package,” he said, referring to lobbyists.

The American Wind Energy Association, the trade group for the wind industry, pushed back on the criticism.

“We are surprised that wind energy was singled out amid a federal tax landscape that currently includes support for all types of energy sources,” said Bree Raum, the trade group’s vice president of federal affairs. “Wind energy provides significant economic benefits to America’s heartland, with states like North Dakota and Oklahoma generating over a quarter of their electricity from this clean energy resource.”

Hoeven’s amendment was ultimately not approved.

Another extension benefits the motorsports entertainment industry, such as NASCAR, by allowing for the faster write-down of costs related to their complexes. That provision, which has appeared in prior legislation going back to 2004, helps those companies lower their overall tax bills and has now been extended until 2025.

A spokesman for NASCAR, which has lobbied Congress on the extension, did not respond to a request for comment.

Another extender grants a tax credit to buyers of “two-wheeled plug-in electric vehicles” – that is, electric motorcycles. That credit is worth 10% of the cost of the motorcycle, up to $2,500. Manufacturers of the bikes, such as Energica and Zero, advertise the tax credit on their websites.

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EU refuses Johnson’s latest Brexit concession (nationthailand.com)

EU refuses Johnson’s latest Brexit concession

InternationalDec 23. 2020Fishermen sort crates of freshly caught fish on board a fishing boat moored at the harbor in Sete, France, on Dec. 1, 2020. The European Union has rebuffed British Prime Minister Boris Johnson’s latest concessions on fishing rights, dealing a setback to efforts to secure a post-Brexit trade deal. MUST CREDIT: Bloomberg photo by Balint Porneczi 

By Syndication Washington Post, Bloomberg · Ian Wishart

The European Union rebuffed Prime Minister Boris Johnson’s latest concessions on fishing rights, dealing a setback to efforts to secure a post-Brexit trade deal.

Johnson spoke with Commission President Ursula von der Leyen twice by phone on Monday to try to break the deadlocked negotiations. The U.K. made an offer that would see value of the fish EU boats catch in British waters shrink by 30%, a substantially smaller drop than the 60% it was demanding last week.

The bloc, however, refused to accept a reduction of more than 25%, saying even that was hard for countries like France and Denmark to accept, according to officials with knowledge of the discussions.

With only nine days left before the U.K. leaves the single market and customs union — with or without an agreement — there are few signs a deal is within reach. Without an agreement on how much fish EU boats will be allowed to catch in British waters, the wider accord risks collapse.

But it’s not as simple as just the raw numbers, which is why, as the two sides continue to talks, a compromise still isn’t out of the question.

Alongside the percentage value of catch, the two sides are haggling over how long a period of time fishermen will be given to adjust to the rules. The U.K. has demanded the EU accept a five-year transition period after previously suggesting three years. The bloc had initially called for 10 years, and has now offered seven.

The EU wants to be able to impose tariffs on the U.K. if, in future, the government restricts access to its waters. In its latest compromise offer, the U.K. said it would accept tariffs on fisheries but not in other areas, such as on energy, as demanded by the bloc.

The European Commission is consulting member states on the British offer, and Michel Barnier, the bloc’s chief negotiator, is scheduled to brief their 27 ambassadors at about 4 p.m. in Brussels on Tuesday. It’s possible a compromise can still be reached, officials added.

While the issue is financially insignificant — the two sides are haggling over roughly $40 million (33 million euros) of fish annually — the British see control of their fishing waters, previously under the jurisdiction of the EU, as a key element of the sovereignty that it is regaining with Brexit. For its part, the EU doesn’t want to give access to its single market without maintaining fishing rights in return.

Speaking at a news conference in London on Monday, Johnson said he spoke to French President Emmanuel Macron, but discussed the coronavirus crisis rather than Brexit.

“It’s vital that everybody understands that the U.K. has got to be able to control its own laws completely and we’ve also got to be able to control our own fisheries,” Johnson said. He reiterated that even if the U.K. failed to get a deal, trading with the EU on terms set by the World Trade Organization would be “more than satisfactory.”

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BioNTech to boost vaccine capacity, sees shot beating new strain (nationthailand.com)

BioNTech to boost vaccine capacity, sees shot beating new strain

InternationalDec 23. 2020The Pfizer-BioNTech coronavirus vaccine. MUST CREDIT: Bloomberg photo by Kobi Wolf 

By Syndication Washington Post, Bloomberg · Naomi Kresge

Pfizer Inc. partner BioNTech SE is pursuing all its options to make more coronavirus vaccine doses than the 1.3 billion the companies have promised to produce next year, according to the German firm’s chief executive officer.

The companies will probably know by January or February whether and how many additional doses can be produced, Ugur Sahin said late Monday in an interview. “I am confident that we will be able to increase our network capacity, but we don’t have numbers yet.”

Sahin also said the vaccine will probably work against the new SARS-CoV-2 strain that has emerged in the U.K. Lab tests of the vaccine’s performance have already been done against 20 mutant versions; the same tests will now be run against the new U.K. version, and should take about two weeks, he said.

Efficacy results of more than 90% and approvals around the world have set off a race between countries for additional supplies of the precious shots, with the U.S. seeking to exercise an option for a hundred million. Most of the doses anticipated for next year — enough to immunize 650 million people — have already been spoken for.

More than 2 million people in six countries have already gotten their first shot of the standard two-dose regimen, according to data collected by Bloomberg.

BioNTech is seeking more of the raw materials it needs for its mRNA vaccine, more clean rooms and more cooperation partners, Sahin said. The company also needs additional space to formulate the shots, put them into containers and prepare them for shipping, he said. Pfizer is producing vaccine at three sites in the U.S. and one in Europe, while BioNTech has two manufacturing sites in Germany.

The vaccine’s EU approval and an inoculation campaign set to start there on Dec. 27 promise to further draw on stocks. By the end of 2020, BioNTech expects to ship 12.5 million doses to the EU and 20 million to the U.S., the company said in a news conference on Tuesday. The partners have already begun shipping shots to the U.K., where Health Secretary Matt Hancock on Monday tweeted that some 500,000 people had gotten their first dose.

If the vaccine turns out to be ineffective against the mutant strain circulating in the U.K., BioNTech could, in theory, produce a new coronavirus vaccine t.o fight the variant within six weeks, Sahin said at the Tuesday briefing. How fast the new inoculation could get to patients would depend on the speed of regulatory review.

But so far, Sahin sees no reason to doubt that the existing shot will be effective. Most vaccines target the spike protein, which allows the virus to enter cells.

“This virus has multiple mutations, but as far as we know, 99% of the spike protein is not mutated,” he said late Monday. “Let’s do the experiment and get the result. That’s always the best answer, but I would emphasize just to stay calm.”

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U.S. economic rebound is patchwork of virus risk and rules (nationthailand.com)

U.S. economic rebound is patchwork of virus risk and rules

InternationalDec 23. 2020Ryan Cole spent thousands outfitting his San Francisco restaurant’s patio with a roof and heaters, but outdoor dining was closed this month and he furloughed all 35 of his workers. “People are just exhausted by the back-and-forth change,” says Cole, photographed Dec. 17, 2020, at The Vault restaurant. MUST CREDIT: Bloomberg photo by David Paul Morris 

By Syndication Washington Post, Bloomberg · Reade Pickert, Olivia Rockeman, Alex Tanzi

The U.S. economy has splintered along state and city lines, with the speed of the rebound largely dependent on the magnitude of local business restrictions to combat an unending surge in covid-19 cases.

California and Illinois, where some of the strictest measures have been imposed, saw jumps in state unemployment filings this month that helped push the weekly U.S. total to a three-month high. Both states also had November unemployment rates above the national level of 6.7%.

In Florida, where many businesses are permitted to operate at full capacity, state jobless filings have hit the lowest since March and the November jobless rate was below the national average, even with tourism employment still depressed.

And even with a new $900 billion stimulus package approved by Congress late on Monday — extending and boosting relief for unemployed Americans — the road to recovery will continue to be uneven in different regions.

Recent data make clear there’s a trade-off between jobs and business restrictions. The economic reality for workers and firms in a place where business is generally open is vastly different from those living where things are mostly closed.

Yet higher mobility also comes with potentially devastating health consequences. Nationwide, more than 300,000 people have died of covid-19, and the recent acceleration in infections and deaths is showing little sign of abating.

A major problem is that lockdown measures are often reactive — implemented when the virus is already out of control — rather than proactive, said Joshua Barocas, an infectious-disease physician at Boston Medical Center. For workers who have managed to keep their jobs, many are faced with choosing their health or their paychecks, he said.

“Me beating the drum of ‘Stay home, stay home, stay home,’ does nothing,” Barocas said. “It is a combination of proactive restrictions, coupled with support — for both individuals and businesses — and creative solutions to sort of reduce the overall probability of transmission.”

The situation has been particularly frustrating to restaurant owners, at least those managing to stay in business after many closed permanently and laid off workers during the pandemic.

In San Francisco, Ryan Cole spent thousands of dollars outfitting his restaurant’s patio with a roof and heaters in the hopes that The Vault Garden could attract enough guests to cover the bills. Earlier this month, outdoor dining was shuttered and Cole furloughed all 35 of his workers.

“People are just exhausted by the back-and-forth change,” he said.

Across the country, in Jacksonville, Fla., Sam and Kiley Efron’s restaurant, Taverna, remains open in part because local authorities allow alfresco dining. They’ve spaced tables six feet apart and reduced indoor seating by half. Sales are down about 30%, but it’s enough to cover expenses, including paychecks for about 50 employees.

“I’ve talked to friends in other states. I am really grateful to be living in Florida right now,” Sam Efron said.

The tougher restrictions are frustrating restaurateurs like Cole, especially when data suggest other measures may be helpful. A study by researchers at the Federal Reserve Bank of Boston found mask mandates are effective in reducing at least half of the increase in covid-19 cases and deaths stemming from increased mobility.

In Duval County, where Jacksonville is located, businesses and schools are largely open, though there is a local mask order. Adjusted for population, Duval’s daily new cases surpassed San Francisco’s in the last few weeks.

Yet Los Angeles County, which had tougher business restrictions during that period, has had a worse surge in infections since mid-November.

New York has seen mixed messages. Statewide contact-tracing data in New York state showed nearly three-fourths of all cases emerged from household and social gatherings in recent months, while just 1.4% stemmed from restaurants and bars.

In New York City, though, Mayor Bill de Blasio has warned of a potential new shutdown of nonessential businesses after the holidays, amid a jump in cases.

Even after vaccines are widely available, regions where lockdown measures have generally been stricter — especially those that depend on hospitality and tourism — are likely to have a more difficult time recovering because many businesses have closed for good.

Los Angeles, New York City and Chicago, where shutdown measures have been strict, have the greatest number of permanent business closures among all U.S. metro areas, according to a September report from Yelp Inc.

In the year through October, the economies of states with more restrictive measures, like California and New York, have fared worse than those with looser rules, like Florida, Georgia and Texas. That’s according to a coincident index — or proxy measure of state economic growth — produced by the Federal Reserve Bank of Philadelphia.

State-by-state unemployment rates illustrate the economic divide, though the correlation with covid-19 caseloads is less clear.

The jobless rate is below the national average in Tennessee and Oklahoma, where business activity has resumed at least somewhat — but it’s been accompanied by some of the sharpest increases in new cases over the past two weeks, according to Johns Hopkins data. In Vermont and Nebraska, which have the lowest state jobless rates, cases have been on a downward path.

The concentration of industries also plays a role. The jobless rate remains above 10% in Hawaii and Nevada, both hospitality-dependent economies suffering from declines in tourism. Hawaii has imposed and enforced strict measures on travelers to the state and a new statewide “pause” in Nevada went into effect Nov. 24.

“The way that we do business has to change with covid, but where I think the frustration really kicks in is the unwillingness to build some flexibility in the rules,” said Mark Vitner, a senior economist at Wells Fargo & Co. “Really what we should be doing is trying to find ways that we can do as much business as we can possibly do safely.”

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Jobless aid, checks, PPP: Adding up $900 billion in virus relief (nationthailand.com)

Jobless aid, checks, PPP: Adding up $900 billion in virus relief

InternationalDec 23. 2020Capitol Police vehicles sit outside the U.S. Capitol Building in Washington, D.C., on Dec. 20, 2020. MUST CREDIT: Bloomberg photo by Ting Shen 

By Syndication Washington Post, Bloomberg · Laura Litvan, Erik Wasson, Laura Davison

The $900 billion in pandemic relief that passed the House and Senate late Monday is aimed squarely at shoring up the U.S. economic recovery into the early spring as battered industries and workers face months of continuing struggle.

The funds were combined with $1.4 trillion to fund regular government operations for the rest of the fiscal year, in massive legislation that runs 5,593 pages. It includes other tax, energy and national-security provisions that lawmakers agreed to pass before the end of the year.

The pandemic relief package includes help for small businesses and the jobless along with direct payments to most Americans. It also provides funding for vaccine distribution, food assistance, tax breaks and money for education and child care.

The provisions aimed at the fallout from the coronavirus represent the second-largest economic rescue package in American history, behind the $1.8 trillion virus relief package that was signed into law just nine months ago. It surpasses the $787 billion stimulus passed in response to the financial crisis in 2009.

Together with the omnibus spending bill, the total package is worth more than $2.3 trillion. The legislation also included a number of tax benefits, some unrelated to the covid-19 crisis.

Here are some highlights of specific provisions:

– Direct Payments

The bill provides $600 in one-time direct payments to individuals and $600 per child. The payments get phased out for individuals making more than $75,000 or couples making $150,000. Treasury Secretary Steven Mnuchin said the Internal Revenue Service would begin processing payments as soon as next week. The IRS already had set up a system to distribute $1,200 payments in the stimulus bill passed in March.

Several senators, including Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., said they wanted larger stimulus payments, but they agreed not to object to a final deal with the smaller amount. Progressive Democrats in the House have started calling these “survival checks.”

– Jobless Benefits

Federal unemployment insurance benefits will be extended for 10 weeks through mid-March, with a $300 supplement payment each week, similar to the extra $600 supplement that expired at the end of July.

It includes people receiving state unemployment benefits as well as those receiving Pandemic Unemployment Assistance, a program that provided jobless benefits to those not traditionally eligible, like gig workers and the self-employed. Without congressional action, the program was on track to expire at year-end, which would have caused millions of Americans to lose their jobless benefits.

Pandemic Emergency Unemployment Compensation, which provided up to 13 additional weeks of jobless benefits to those who had exhausted their regular state benefits, was extended as well.

Unlike stimulus payments and forgiven PPP loans, which aren’t subject to federal taxes, unemployment insurance recipients must pay income taxes on their jobless benefits. Many states don’t automatically withhold taxes when they distribute those payments, so recipients will owe those taxes when they file their tax returns next spring.

– Companies, Airlines

The aid package includes $284 billion for the Paycheck Protection Program that was created in the Cares Act. That program’s loans to firms with fewer than 500 employees can be fully forgiven if companies keep people on their payroll.

The legislation clarifies that business owners can write off expenses paid for with forgiven PPP loans, giving small companies a tax break that could amount to more than $100 billion. The legislation would override an IRS decision that said business couldn’t claim deductions on costs, such as rent and wages, paid for with tax-free PPP money.

It also includes $15 billion to reinstate payroll reimbursements to airlines, which expired two months ago, as well as $1 billion for airline contractors.

– Tax Breaks

The legislation includes a priority for President Donald Trump: an expansion of the business-meals deduction. Economists have said the change would do little immediately to help struggling restaurants.

It also includes a renewal of the employee retention tax credit for businesses that keeps workers on their payrolls. The break gives companies an additional incentive to keep people employed as many firms still face revenue downturns but have run out of PPP money or never qualified for it.

The package makes changes to the earned income tax credit and the child tax credit to make it available to people who lost wages or jobs during the pandemic, as well as an expanded Low Income Housing Tax Credit to boost construction of housing for low-wage families.

The legislation would make permanent an excise tax break for beer brewers, wine makers and distillers. In addition, other expiring tax credits, including some for mortgage interest premiums and tax credits to help businesses in low-income communities.

– Housing, Education and More

The measure contains $25 billion for emergency rental assistance, and it extends the Cares Act’s eviction moratorium until Jan. 31.

It also calls for $7 billion in spending on broadband internet, including $3.2 billion to help poor households pay for the service and $1.9 billion to boost security by removing gear from equipment providers such as Huawei Technologies Co.

Other key funding provisions include funds for virus testing, tracing and vaccine development and distribution. It also has $82 billion for education funding, as well as $10 billion to support child-care providers, $15 billion for entertainment venues and $13 billion for nutrition assistance. The bill would convert a $10 billion loan for the U.S. Postal Service to a grant.

– Non-pandemic Measures

The legislation includes $1.4 trillion in regular appropriations to keep the government operating through the end of fiscal 2021 on Sept. 30. A last-minute deal kept $12.5 billion for Veterans Affairs health funding under the total spending budget cap.

Lawmakers settled on nearly $1.4 billion for border-wall construction and related spending, short of Trump’s request for nearly $2 billion. His $5 billion ask for fiscal 2019 led to the longest shutdown in the country’s history, but he hasn’t had a standoff with lawmakers over wall funding since he circumvented Congress by using military funds to build additional fencing.

The spending package also includes the long-standing Hyde amendment, which bars federal funds for most abortions, and the Helms amendment, which bars the use of foreign assistance funds for abortions. Congressional Democrats have said they want to remove the Hyde amendment from spending bills starting in fiscal 2022, when a Democrat will be in the White House. President-elect Joe Biden has said he also opposes the Hyde amendment.

There are a number of so-called “riders” that aren’t related to the pandemic or the 12 appropriations bills that make up the spending omnibus. These include everything from a bill creating Smithsonian museums dedicated to women’s history and the American Latino to technical corrections to the U.S.-Mexico-Canada trade agreement.

One of those riders is the long-discussed legislation to protect patients with health insurance from “surprise” medical bills in most emergency situations, including air ambulance rides. Patients also wouldn’t have to pay bills received more than 90 days after a visit, and health plans and providers would have to provide patients with more information on their networks and costs.

The final legislation also calls for the U.S. to join other nations in phasing out hydrofluorocarbons used in air conditioning and refrigeration systems. While hydrofluorocarbons aren’t nearly as bad for the ozone layer as chlorofluorocarbons, the chemical they were designed to replace, they still have hundreds to thousands of times the heat-trapping power of carbon dioxide.

The bill includes a reauthorization of the Water Resources Development Act that deals with water-related infrastructure. It also extends tax credits for renewable energy projects, including wind and solar production.

The bill reforms the way the Federal Aviation Administration certifies aircraft, a move prompted by the failures of the Boeing 737 Max plane.

The legislation would allow the secretaries of Homeland Security and Labor to increase the number of H-2B visas for workers in meatpacking, landscaping and construction.

The catchall bill alters pipeline safety regulations, reforms the federal student aid application, institutes regulations for horse racing and resolves terrorism claims against Sudan, among hundreds of smaller provisions tucked inside.

It would also give civilian federal workers a 1% raise, as well as a 3% raise for the military, but no pay increase for the lawmakers who will be voting on the final bill.