Member Briefing December 21, 2022
Lawmakers Unveil $1.7 Trillion Government Funding Bill to Stave Off Friday Shutdown
The so-called omnibus would provide the military with $858 billion this fiscal year, a nearly 10 percent increase over current levels. It would fund domestic programs at more than $772 billion, including nearly $119 billion, or a 22 percent increase, for veterans’ medical care, according to the office of Senate Appropriations Chair Patrick Leahy (D-Vt.). The omnibus includes about $45 billion for Ukraine, exceeding President Joe Biden’s request for $37 billion, in addition to nearly $40 billion in disaster aid for storm and wildfire recovery. The bill is also loaded with unrelated policy provisions, including a bipartisan deal to revamp the outdated Electoral Count Act, legislation that would ban TikTok on government phones, an extension of pandemic telehealth flexibility, retirement savings incentives and much more.
Not included in the bill is billions of dollars in pandemic aid requested by Biden, an extension of the enhanced Child Tax Credit pushed for by Democrats, cannabis banking legislation and a popular tax provision that would have allowed businesses to immediately write off their research expenses, rather than over a period of five years.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Spending Bill Contains Billions for Ukraine, Funds U.S. Ammunition Manufacturing - WSJ
- Russia's Transneft Receives Polish and German Requests for Oil - Reuters
- U.N. Chief ‘Not Optimistic’ About Ukraine Peace Talks in ‘Immediate Future’ - Politico
- Israel to Give 17 Power Generators to Ukraine for Electricity-Starved Kherson – Times of Israel
- Ukraine’s Zelensky Visits Front-Line City of Bakhmut - WSJ
- Soviet Art Returns Amidst Russia-Ukraine War - Forbes
- ‘Everybody Has Weapons’: Russia’s Balkanized Military Sparks Civil Unrest Concerns – Breaking Defense
- Three Dead as Blast Shuts Part of Russia-Ukraine Gas Export Pipeline - Reuters
- Is Russia Running Out of Ammunition? – The Economist
- Ukraine Urges Russian Soldiers to Surrender to Drones - NYT
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
U.S. Housing Starts Declined Less Than Expected in November; Permits Fell Sharply
U.S. single-family homebuilding tumbled to a 2-1/2-year low in November and permits for future construction plunged as higher mortgage rates continued to depress housing market activity. The dour report from the Commerce Department put residential investment on track to contract for the seventh consecutive quarter, which would be the longest such stretch since the collapse of the housing bubble triggered the Great Recession.
Single-family housing starts, which account for the biggest share of homebuilding, dropped 4.1% to a seasonally adjusted annual rate of 828,000 units last month. That was the lowest level since May 2020, when the economy was reeling from the first wave of the COVID-19 pandemic. Starts for housing projects with five units or more surged 4.8% to a rate of 584,000 units, the highest level since April. Multi-family housing construction is being driven by strong demand for rental accommodation as the higher mortgage rates force many potential homebuyers to remain renters.
Home Builder Confidence Plunges
Data on Monday showed confidence among single-family homebuilders sinking further in November, pushing the National Association of Home Builders (NAHB)/Wells Fargo housing market index to the lowest level since June 2012, excluding the tumble during the early days of the pandemic in the spring of 2020. Overall, permits for future home construction plunged 11.2% to a rate of 1.342 million units last month, the lowest level since June 2020.
The combination of higher mortgage rates, declining single-family homebuilding and inventory could worsen an existing housing shortage and the slow the pace of house price decreases, posing a conundrum for the Fed. "The limited available inventory fueled by both existing homeowners and homebuilders will keep the market tight, price declines minimal, and competition for desirable homes alive," said Nicole Bachaud, an economist at Zillow in Seattle.
U.S. COVID Update - It’s Not Just You. Everyone Really is Sick This Holiday Season
In a signal of widespread disease, wastewater levels of COVID are again on the rise. Nationally, they’re at their third-highest peak since the pandemic started. They’re greater than they were during the first wave of infections in the spring of 2020. But they’re lower than they were during the Omicron surges of January and July, according to Biobot Analytics, a company that performs wastewater surveillance for the U.S. Centers for Disease Control and Prevention.
But the winter COVID surge is only part of the problem. This season’s flu outbreak is “the worst in a decade,” Jha said. Flu activity remains “high” or “very high” in the vast majority of the U.S. There have been at least 15 million flu illnesses so far this season, with 150,000 hospitalizations and 9,300 deaths, according to the CDC.
Covid Outbreak Throws Chinese Factories and Supply Chains Into Chaos
The Omicron variant of the virus has begun to run rampant through several big cities since the sudden U-turn on president Xi Jinping’s former zero-Covid policy of containment earlier this month. The surge in infections is largest in the capital Beijing, where more than half the 22mn population is infected, according to some estimates. Companies have been left with no direction on how to handle the sudden surge in cases, after previously operating under strict guidelines handed down by local governments. Factory bosses are now either loosening all controls or isolating workforces to keep production lines functioning.
Many office workers have begun to work from home but some factories are becoming thinly staffed as workers call in sick. Business owners and executives said this was causing increasing disruption to production and supply chains. The boss of a printed circuit board factory in the eastern province of Shandong said only 20 per cent of staff came to work on Friday, the rest calling in sick with Covid. “One after another tested positive. I’m worried that I will have to shut the factory down,” they said.
BOJ Shocks Markets With Surprise Widening of Yield Target Band
The Bank of Japan shocked markets with an unexpected widening of its target band for interest rates, sparking a rally in the yen, pushing up bond yields and triggering a slump in stocks.In a policy statement on Tuesday, the central bank said it will allow yields on 10-year government bonds to move up or down within 50 basis points around its 0% target, wider than the previous 25-point band.
"This is neither a tightening nor a step toward an exit. This is a tweak to the monetary policy operation," BOJ Gov. Haruhiko Kuroda told reporters in Tokyo. While the markets were taken by surprise, Kuroda shrugged off the move, saying that the BOJ was merely responding to changes in the market conditions. "We did this to support the economy and will explain it to market players as much as necessary."
Auto Executives Are Less Confident in EV Adoption Than They Were a Year Ago
Of the more than 900 automotive executives who took part in the annual global auto survey by KPMG, the international consulting and accounting firm reports 76% are concerned that inflation and high interest rates will adversely affect their business next year. In just the U.S., the figure was 84%. Amid those concerns, KPMG reports automotive executives are less bullish about the prevalence of all-electric vehicles in the U.S. and globally by 2030. Estimates of new vehicles sold being EVs by then globally ranged from 10% to 40% in this year’s survey, down from 20% to 70% a year earlier.
For the U.S., the median expectation for EV sales was 35% of the new vehicle market — down from 65% a year earlier and significantly lower than the Biden administration’s 50% goal by 2030 that was announced late last year.
Treasury Department Delays Electric Vehicle Tax Credit Guidance Until March
The Treasury Department is delaying plans to issue proposed guidance for the sourcing of electric vehicle batteries for federal tax incentives from the end of this month to March. The sourcing of materials and batteries for EVs is a major part of the Inflation Reduction Act’s federal tax credits of up to $7,500 for consumers, which was signed into law by President Joe Biden in August. That means some electric vehicles that are not expected to comply with the new standards will continue to be eligible for the credits until the proposed guidance issued. Other non-battery elements of the IRA will still take effect Jan. 1, including new income caps for eligible buyers and restrictions on vehicle pricing.
Some have argued the sourcing guidelines for vehicle materials are unrealistic given the current supply chain. Other countries and non-domestic automakers such as Hyundai have argued the rules should be defined more broadly to allow some exemptions. The Treasury said late-Monday that it will issue the “anticipated direction of the critical mineral and battery component requirements” by the end of this month, and that nothing will take effect until the proposed guidance is issued in March.
Top 10 EHS Trends of 2022
Far too many workers are still getting injured and killed on the job and on the highways from safety violations of the industrial kind (e.g., falls from heights, explosions and electrocutions) as well as the psychological kind (e.g., active shooting and suicides).
Rather than sugarcoating the bad news by focusing only on positive developments, EHS Today’s year-end wrap-up will do what it’s designed to do: review some of the major trends in the EHS profession (these trends are not ranked in any particular order) and shine a light on where progress occurred and where more work needs to be done. It’s likely, but not at all certain, that the pandemic could end in 2023, but the COVID variants—and vaccinations—will be with us for who knows how long. Meanwhile, safety leaders will continue to do what they always do: make their workplaces and communities safer.
Economist Who Foresaw Housing Crunch Sees Home Prices Dropping
An economist who foresaw the popping of the housing bubble more than 15 years ago expects US home prices to fall between 8% and 12% over the next two years as rising rates cut into pandemic-era demand.
Tom Lawler, a former economist for Fannie Mae, sees demand falling in part because a shrinking number of people are moving out on their own and forming households. That’s in part because during the early part of the pandemic in 2020, many people under the age of 34 moved back in with their parents, or didn’t leave the home they grew up in.
State Legislature Pay Raise Bills Introduced; Special Session Possible This Week
Legislation was introduced late Monday, though the legislative memorandum was not available to the public to see on the Assembly and Senate websites as of Tuesday morning. Text of the legislation shows an increase in salary to $142,000 a year and a limit on outside income for legislators. The legislature could vote as early as Thursday given the introduction of the legislation on Monday. A message of necessity from Gov. Kathy Hochul won’t be necessary.
The Empire Center for New York State Policy reported Tuesday a pay raise for legislators would make New York’s legislature the highest paid in the country. California legislators are paid $122,694. Neighboring New Jersey’s legislators are paid $49,000 a year, according to the Empire Center, while Connecticut’s lawmakers are paid $45,000.
3M to Stop Making 'Forever Chemicals’
3M Co (MMM.N) on Tuesday set a deadline of 2025 to stop making PFAS, also known as "forever chemicals", that are used in everything from cell phones to semiconductors and have been linked to illnesses ranging from cancer, heart problems to low birthweights. The per- and polyfluoroalkyl substances are known as forever chemicals because the substances do not break down quickly and have in recent years been found in dangerous concentrations in drinking water, soils and foods across the country.
The move comes amid rising legal pressures over damage caused by the chemicals. Last month, 3M and DuPont de Nemours Inc (DD.N) were among several companies to be sued by California's attorney general to recover clean-up costs. read more. Pressure on companies to stop producing the chemicals has increased in recent years, with investors managing $8 trillion in assets earlier this year writing to 54 companies urging them to phase out their use.
NY Fed President Williams On The Economic Outlook
In a live TV interview, President Williams discussed the outlook for the U.S economy, Federal Reserve policy, and the efforts the Fed has taken to address inflation. He said that while there are some signs of slowing in the labor market, there is still a very strong imbalance between supply and demand, and he emphasized that the Fed will do what's necessary to bring inflation down to 2%. "Price stability is absolutely essential for a struggling economy in the long run," he said.
HR leaders share their tips for crafting a pitch-perfect end-of-year message
As 2022 comes to an end, one shared sentiment may emerge across all organizations and industries: "What a year." No doubt, this is how many end-of-year addresses will begin as employers reach out to their workforce this month, and no matter what the year's impact has been on a business, it is important for leaders to keep their communication honest, gracious and brief. Topics such as company culture and values, achievements, challenges, and plans for the upcoming year can all be covered, and with some key expert tips, a meaningful EOY message is just words away.
"Communication should be personal and personalized as much as possible, and stress the human aspects of work," says Stefanie Tignor, VP of data science at HR tech company Humu. "Humu sees from our data that employees are hungry for managers to express emotional support, show an interest in their well-being, and genuinely care for their direct reports. You need to understand what motivates your team members and what they value."
Roughly 1 in 3 Workers is Worried About a Layoff
Job-seeker and worker confidence has been on the decline for months, even though the job market is technically very good, economists say, with millions more openings than there are workers to fill them and a historically low layoff rate. But compared to the meteoric rise of worker leverage during the Great Resignation, workers could be seeing a little bit of turbulence, mostly in tech and finance, as an early sign that big trouble is ahead.
Roughly 1 in 3 U.S. workers, 31%, say they’re concerned their company is planning budget cuts or layoffs, according to a recent LinkedIn Workforce Confidence survey, which includes data from 21,000-plus professionals from September to December.
Propane and Gas Heating in Crosshairs of Climate Council’s Scoping Plan
On December 19, the New York State Climate Action Council (Council) approved a 24-chapter, 445-page Scoping Plan to implement the state’s so-called “nation leading” Climate Leadership and Community Protection Act (CLCPA). If the Council gets its way, beginning in 2030 homeowners will no longer be able to replace their propane, gas or oil-fired furnaces. Instead, they’ll be expected to buy heat pumps, preferably the more expensive ground-source variety.
Heat pumps do have advantages, including cooling your home in summer, and they’re great for those who want them. It’s true that some people will get more efficient heating that will pay back that cost over time. The question is how much time — and the higher the cost, the longer the time. And for some homeowners using low-cost fuels, the Scoping Plan admits that “bill savings do not currently offer a clear economic return on investment for adopting a whole-home heat pump.” In other words, some people will never recoup their forced investment.