YCLOAK

California Gov. Jerry Brown and lawmakers asked the U.S. government Friday for $7.4 billion to help rebuild after a cluster of fires tore through the heart of wine country, killing more than 40 people and leaving thousands without housing.

 

In a letter to the White House, Brown joined California’s U.S. senators and 39 members of its congressional delegation to urge President Donald Trump and Congress to quickly adopt a disaster-related appropriations measure to support the state’s recovery.

 

Brown said the funding would go toward cleanup and programs to support housing, transportation, agriculture, environmental protection and other services for those affected by the fires.

A series of blazes that started in Northern California the night of Oct. 8 killed at least 43 people and destroyed about 8,900 homes and other buildings. At the peak, thousands of firefighters battled 21 blazes that burned simultaneously.

Officials have not yet assessed all the damage and effects of the fires, but the governor’s office and the affected counties determined that $7.4 billion in federal funding is needed to help California recover, the letter says.

 

The wildfires significantly damaged farmland, rangeland and watersheds, and more than a third of the funding requested, $3.1 billion, would go toward helping agricultural industries bounce back, including affected wineries, California officials said.

 

“The full economic impact to the agricultural, tourism, hospitality, and wine industries is still not known,” the letter says. “Nine California wineries were destroyed and 21 were damaged in the nation’s most prominent winemaking region.”

Congress last month approved $576.5 million in aid for wildfires earlier this summer in California and the U.S. West. It also has approved billions in relief funding to help states affected by hurricanes and other weather-related disasters this year.

 

Trump pledged aid for California fire victims on Oct. 10, saying he had told Brown that “the federal government will stand with the people of California.”

 

Brown said he has asked the California Department of Finance to expedite doling out $41.5 million to support the immediate needs of victims not eligible for federal aid.

During the wildfires last month, Brown declared a state of emergency for the Northern California counties of Solano, Napa, Sonoma, Yuba, Butte, Lake, Mendocino and Nevada as well as Orange County in the south.
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The largest port complex in the nation has set goals to drastically reduce air pollution over the next several decades.

The plan approved Thursday at a meeting of the governing boards of the twin ports of Los Angeles and Long Beach outlines strategies for improving equipment and efficiency to eventually move cargo with zero emissions.

The ports estimate that the cost of the efforts ranges from $7 billion to $14 billion, but the plan does not make clear who will pick up the tab. And detailed plans for implementing each program will require approval by each port’s harbor commission.

“Collaboration will be critical to our success,” Long Beach Harbor Commission President Lou Anne Bynum said in a statement. “Moving the needle to zero requires all of us — the ports, industry, regulatory agencies, environmental groups and our communities — to pool our energy, expertise and resources.”

The plan has raised concerns that the enormous cost of the clean air goals could make the two ports less attractive in the face of competition from ports on the East and Gulf coasts.

The Los Angeles Times reported that Pacific Merchant Shipping Association President John McLaurin told commissioners he feared the cost “and its potential negative impacts on port competitiveness and the one in nine jobs in the Southern California region that are reliant on the ports.”

Largest pollution source

The neighboring ports 20 miles south of downtown Los Angeles are the single largest fixed source of air pollution in Southern California, according to the South Coast Air Quality Management District.

Main points of the plan include clean-engine milestones for trucks, creating incentives to speed up fleet turnover to near-zero and zero-emission trucks, and efficiency programs for truck reservations and staging yards. The timeline for achieving a zero-emission truck fleet is 2035.

Other elements include requiring terminal operators to use zero-emission equipment by 2020, if possible, or the cleanest available equipment.

The plan also pursues electrification of terminal equipment and expands on-dock rail, with a goal of moving 50 percent of all cargo out of the ports by train.

The ports of Los Angeles and Long Beach sprawl over more than 23 square miles (60 square kilometers) of land and water. They handle about 40 percent of U.S. container import traffic, about 25 percent of total exports, and together rank as the ninth-largest port complex in the world, according to the ports.
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A Nigerian militant group whose attacks on energy facilities in the Niger Delta last year helped push Africa’s biggest economy into recession said Friday that it had ended its cease-fire.

The Niger Delta Avengers announced a halt to hostilities in August 2016, although they carried out attacks in October and November last year.

“Niger Delta Avenger’s cease-fire on Operation Red Economy is officially over,” the group said on its website.

“Our next line of operation will not be like the 2016 campaign, which we operated successfully without any casualties; this outing will be brutish, brutal and bloody,” it said in a section of its statement addressed to oil companies.

The move threatens Nigeria’s fragile economic growth and poses a further security challenge for President Muhammadu Buhari, in addition to the jihadist Boko Haram insurgency in the northeast and rising secessionist sentiments in the southeast.

The government has been in talks for more than a year to address grievances over poverty and oil pollution, but local groups have complained that no progress has been made, despite Buhari’s receiving a list of demands at a meeting last November.

Buhari’s office did not immediately comment.

The 2016 attacks cut oil production from a peak of 2.2 million barrels per day (mbpd) to near 1 mbpd, the lowest level in Africa’s top oil producer for at least 30 years.

Result was recession

The attacks, combined with low oil prices, caused the OPEC member’s first recession in 25 years. Crude sales make up two-thirds of government revenue and most of its foreign exchange. Nigeria came out of recession in the second quarter of this year, mostly because of the rise in oil production after attacks stopped and as prices strengthened.

The Niger Delta Avengers, who say they want a greater share of Nigeria’s energy wealth to go to the impoverished swampland region, said they decided to end the cease-fire because they had “lost faith” in local leaders.

“We can assure you that every oil installation in our region will feel the warmth of the wrath of the Niger Delta Avengers,” it said.

There have been no substantial attacks in the region since January.

Eric Omare, president of the Ijaw Youth Council, which represents the largest ethnic group in the Niger Delta, said the government had paid only “lip service” to communities’ concerns.

“The truth is that the federal government has not demonstrated any seriousness towards addressing the issues that led to the Niger Delta agitation,” Omare said, while adding that his group sought a “peaceful dialogue.”

Nigeria’s economy grew 0.55 percent year-over-year in the second quarter, largely on higher oil receipts.

The World Bank cut its 2017 growth forecast in October to 1 percent from 1.2 percent, as the oil production increase was lower than expected and non-oil sector growth was subdued.
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Venezuela’s cash-strapped government invited creditors to a Nov. 13 meeting in Caracas on Friday, after announcing plans to potentially restructure some $60 billion in bonds that sent the OPEC nation’s debt prices plunging.

President Nicolas Maduro on Thursday vowed to make a $1.2 billion bond payment but said future payments would be refinanced. Investors were unsure about what he meant, because U.S. sanctions has taken refinancing off the table.

Many saw the announcement as paving the way for default – despite Venezuela’s promises to the contrary – because the debt burden has left the country desperately short of basic goods such as food and medicines.

A default could create a sovereign debt crisis of a scale not seen in Latin America since the massive 2001 default in Argentina that shut it out of markets for years.

Investors say a newly created debt negotiation commission has little chance of making progress, in part because it is headed by Vice President Tareck El Aissami – who is blacklisted by the United States for alleged drug dealing.

“This commission will lay the groundwork for true and transparent dialogue between the government and bondholders,” El Aissami, who has no known experience in debt negotiations, said in a televised address.

Investors were bewildered that Maduro, who narrowly won election in 2013 after the death of Hugo Chavez, appeared to be opening the door to default immediately after authorizing more than $2 billion to bond payments.

Market wisdom had been that Venezuela would not make such payments if it expected to end up in default. It will need those funds because it will be locked out of financial markets.

“Nobody has ever paid a bond in full only to announce default the next day,” said an executive from one local brokerage, who asked not to be identified.

In addition to outstanding bonds, Venezuela owes some $26 billion to bilateral and multilateral creditors and $24 billion in commercial loans, according to New York-based Torino Capital.

It put the total public sector debt at $152 billion, though Maduro’s announcement appeared to be focused primarily on bonds.

The government and PDVSA owe some $1.6 billion in bond service and delayed bond interest payments by the end of the year, plus another $9 billion in bond servicing throughout 2018.

‘Zero Possibility’

U.S. President Donald Trump, accusing Maduro of dictatorship, barred U.S. banks from participating in or negotiating new Venezuelan debt deals. That rules out swap operations, which allow investors to voluntarily exchange near-term debt for new securities that mature later.

Restructuring – which generally follows a default – refers to an involuntary arrangement under which creditors agree to change payment conditions. But they usually do so only in exchange for major economic reforms, which Maduro has balked at.

“A restructuring has a very close to zero possibility given U.S. sanctions, time constraints given the payment schedule, and the fact that Venezuela obviously does not have the technical capacity to negotiate,” said Jim Barrineau, co-head of emerging market debt at Schroders.

The International Monetary Fund issued a warning to Venezuela on Friday for failing to provide it with economic data on time and gave it six months to address the problem. The IMF could issue a “declaration of censure” for non-compliance, two sources told Reuters.

Although the IMF’s warning is unrelated to Maduro’s announcement, it added to investor worries about the economy.

Venezuelan bond prices took a beating on Friday.

Near-term maturities were hardest hit. The PDVSA 2021 bond dropped 20 percentage points to a bid price of 27 points.

Longer-dated bonds fared better, with PDVSA’s 2027 bond slipping 4.83 points to bid 25.13. Venezuela’s 2018 bond was down 31 points.

Investors holding longer-dated paper generally expect a default will take place well before maturity, while the profitability of short-term bets is more dependent on the bonds being paid off.

Bank of America on Friday estimated that bond prices would drop to around 20 cents on the dollar if a default took place.

There was no immediate impact on oil exports and production from Maduro’s announcement.

EMTA, a trade association that sets practices for emerging markets, recommended that Venezuelan bonds not under U.S. sanctions continue trading with accrued interest – a sign Venezuela is for now expected to keep up with its payments.

The Washington-based International Institute of Finance (IIF) held an investor call for bondholders in the event talks with the government go ahead, according to two market sources who participated in the call.

Most were not planning to go to Caracas, the sources said. IIF declined to comment.

‘Nobody Trusts His Government’

Leaders of the opposition-led National Assembly said on Friday that any restructuring would be invalid without congressional approval.

“Maduro won’t be able to restructure the debt because nobody in the world trusts his government,” National Assembly head Julio Borges said.

Though there is widespread public disquiet at economic hardship, the opposition coalition is cracking after a disastrous showing at last month’s gubernatorial elections, and there is speculation Maduro may bring forward the presidential vote, which had been expected for the end of 2018.

Vice President El Aissami said a $1.2 billion payment on PDVSA’s 2017N bond that matured on Thursday had already been transferred. The Central Bank’s website showed a drop of $430 million in international reserves, signaling the government may have dipped into reserves to pay the PDVSA bond.

That pushed reserves to $9.7 billion, their lowest level in at least 20 years.

The company spent days trying to make payment on its 2020 bond, which finance industry sources attributed to nervousness by bank officials over possible U.S. sanctions violations.

Principal payments on the two bonds were moving through the clearing system without a problem, a source familiar with the matter said on Friday.

The next hard payment deadline for PDVSA is an $81 million bond payment that was due on Oct. 12 but on which the company delayed payment under a 30-day grace period. Failing to pay that on time would trigger a PDVSA default, investors say.

That would expose Venezuela and PDVSA to lawsuits by creditors seeking to seize assets such as refineries in the United States.
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In a warehouse outside Paris, university drop-out Celine Galland stacks  palettes and fills out an inventory sheet, part of a logistics apprenticeship she hopes will put a decade of short-term contracts and unemployment behind her.

France’s jobless rate has sat stubbornly above 9 percent for nearly a decade. President Emmanuel Macron blames a notoriously rigid labor market and has two ideas to change it: more vocational training for school leavers and making it easier for workers to retrain and change jobs.

On Nov. 10, his government will open talks with unions, business leaders and the regions on how to reform the apprentice system, cutting through its bureaucracy and financing.

The former investment banker promises an extra 15 billion euros ($17 billion) for professional training over five years, but beyond the money he will need to counter public prejudice if he is to reverse a slide in apprentice numbers.

University did not sit well with Galland, who quit after several weeks. Since then the 31-year-old has worked at menial jobs in McDonald’s and local supermarkets.

“What I love about this is the variety of tasks,” she enthused last week at an AFTRAL logistics and transport training centre in Savigny-le-Temple, east of Paris. “There’s no boredom in this job.”

France’s unemployment rate is more than double Britain’s and several points higher than Germany’s. Particularly troubling for Macron’s centrist government is youth unemployment — nearly one in four 15-24 year olds are without a job, according to official data, a major drag on long-term growth.

Macron has already defied union-led street protests to loosen labor laws, necessary he says to make hiring and firing workers cheaper and easier for small companies.

Leftist opponents and hardline trade unions accuse him of abandoning France’s long-cherished ideals of an egalitarian society to side instead with corporate interests.

But the 39-year-old president is standing firm. He promises greater support for workers through an overhaul of training and a revamped welfare system, pointing to the Nordic model of flexibility in the labor market underpinned by security through the social welfare system.

He will, though, need to overturn a widely-held perception that apprenticeships are a poor alternative to school and university diplomas, which France obsesses over.

“We have to put an end to French defeatism, to people saying that apprenticeships are for those who have failed,” Macron said this month while visiting a college.

Decline in apprenticeships

France’s existing apprenticeship system involves the signing of a contract between the apprentice, the employer and the training institution. Students earn a percentage of the minimum wage and gain workplace experience, while companies can source talent and receive welfare payment waivers.

France lags behind numerous European peers. OECD data from 2016 shows 4.9 percent of French youths aged between 16 and 29 completed apprenticeships in 2012, compared with 8.6 percent in Denmark and 15.1 percent in Germany.

As a recovery in the euro zone’s second biggest economy gathers strength, employers complain they cannot fill vacancies despite the near double-digit jobless rate because of a skills gap — a mismatch Macron says apprenticeships can help fix.

“Our figures have shown a clear trend for several years: 80-95 percent of our apprentices are in jobs within six months of finishing,” said Pierre de Surone, director of the Savigny-Le-Temple training center. “Apprenticeship works!”

While the number of higher education apprentices is rising, the number of youngsters gaining college-level apprenticeship diplomas fell to 260,000 in 2016 from 335,000 a decade ago, Education Ministry data shows.

That presents a challenge for Macron. Data published by Cereq, a French government think-tank, shows apprenticeships boost the employability of individuals with low academic qualifications more than for those at higher education grade.

“We don’t value practical jobs, technical jobs. If we don’t give recognition to these jobs then we’re in trouble,” said Gabriel Schumacher, director at a local distribution company.

 
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President Donald Trump is making his mark on the US Federal Reserve, naming former investment manager and central bank governor Jerome Powell to replace Janet Yellen, whose term expires in February. If confirmed by the Senate, the next chairman of the Federal Reserve will oversee U.S. monetary policy and maintain the stability of the world’s largest economy. Mil Arcega has more from the nation’s capital.
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Venezuela on Thursday announced plans to restructure its burgeoning foreign debt, a move that may lead to a default by the cash-strapped OPEC nation whose collapsing socialist economy has left its population struggling to find food and medicine.

President Nicolas Maduro vowed to make a $1.1 billion payment on a bond maturing Thursday, but also created a commission to study “restructuring of all future payments” in order to meet the needs of citizens.

Venezuela has few avenues to do that though because of sanctions by the United States that bar American banks from participating in or even negotiating such deals.

Thus, Maduro’s most readily available recourse to ease payments is unilaterally halting them.

“I am naming a special presidential commission led by Vice President Tareck El Aissami to begin refinancing and restructuring all of Venezuela’s external debt and (begin) the fight against the financial persecution of our country,” Maduro said in a televised speech.

Billions in bonds

Venezuela and state-owned companies have $49 billion in bonds governed by New York Law and promissory notes, according to New York-based Torino Capital.

The government and state oil company PDVSA owe about $1.6 billion in debt service and delayed interest payments by the end of the year, plus another $9 billion in bond servicing in 2018.

The next hard payment deadline for PDVSA is an $81 million bond payment that was due Oct 12 but on which the company delayed payment under a 30-day grace period. Failing to pay that on time would trigger a default, investors say.

That would likely make countries less willing to do business with Venezuela, aggravating shortages of food and medicine and creating further problems for its oil industry, which is hobbled by under-investment.

Wall Street for years pumped billions of dollars into Venezuela by way of bond purchases, passing off the revolutionary rhetoric of the ruling Socialist Party as bluster that belied an iron-clad willingness to pay its debts.

Maduro surprised many by maintaining debt service after the 2014 crash in oil prices, diverting hard currency away from imports of food and medicine toward Wall Street investors.

PDVSA carried out a debt renegotiation in 2016.

But that option was taken off the table after U.S. President Donald Trump levied sanctions blocking the purchase of new debt issued by Venezuela and government-owned entities.

Investors puzzled

Investors seemed puzzled by Maduro’s statements Thursday, which neither clearly declared default nor laid out a path to easing payment burden.

“At no moment did he say they wouldn’t pay, so it’s not a default,” said Alejandro Grisanti of Caracas-based consultancy Ecoanalitica. “But in this environment, Maduro has no way to restructure or refinance as he said today.”

And the mere presence of El Aissami on the new debt commission makes it a non-starter for U.S. financial institution. He was blacklisted this year by U.S. Treasury Department on accusations he is involved in drug trafficking.

The increased pressure of the sanctions has made banks more nervous about working with PDVSA, according to financial industry sources, leading to delays in simple operations.

PDVSA struggled for days to deliver funds for a bond payment due last week amid confusion over which banks were charged with transferring the money.

​Toll on Venezuelans

Critics say Maduro’s decision to put debt above imports has taken a huge toll on the population.

Child malnutrition has reached the scale of a humanitarian crisis in four Venezuelan states, according to a May 2017 report by Caritas Internationalis, a Rome-based nongovernmental organization with links to the Catholic Church. Medicine shortages have also left children dying of preventable diseases.

Officials say ideological adversaries are exaggerating problems for political effect.

But the situation is a stark contrast to the oil boom years of late socialist leader Hugo Chavez, who spent generously on social welfare programs while borrowing profusely to keep spending at full tilt.

Venezuela’s debt is the highest yielding of emerging market bonds measured by JPMorgan’s EMBI Global Diversified Index , paying investors an average of 31 percentage points more than comparable U.S. Treasury notes.

That is nearly double the spread on bonds issued by Mozambique, which is already in default, and more than six times the spread on bonds from war-torn Ukraine.
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Officials in the U.S. and Puerto Rico gave differing views Thursday on when power will be fully restored to the U.S. territory after Hurricane Maria hit as a Category 4 storm more than a month ago.

Ricardo Ramos, director of the state-owned power company, said the utility has restored 35 percent of the electrical system’s regular output and expects to reach 50 percent by mid-November and 95 percent by mid-December. But Ray Alexander, director of contingency operations at the U.S. Army Corps of Engineers, said the corps’ goal is to have 50 percent restored by the end of November and 75 percent by the end of January.

 

“We are focused on executing the mission we’ve been assigned,” Alexander said at a hearing in Washington, adding that the agency has been working with the U.S. Department of Energy to help develop a more resilient electrical grid for Puerto Rico.

Gov. Ricardo Rossello criticized the Army Corps of Engineers earlier this week for what he said was a lack of urgency in responding to Puerto Rico’s island-wide blackout.

The discrepancy came as President Donald Trump cleared the way for additional federal funding for Puerto Rico by amending a September disaster declaration to increase the share of rebuilding and recovery costs borne by the U.S. government.

Trump had already authorized the Federal Emergency Management Agency to pay 100 percent of some cleanup and emergency costs for 180 days. Washington will now pay 90 percent of the additional cost of rebuilding Puerto Rico, including repair of public infrastructure like hospitals, bridges and roads and restoration of the island’s devastated power grid.

Typically, U.S. states cover 25 percent of those costs, with federal taxpayers covering 75 percent. Puerto Rico’s finances were in shambles even before the storm made landfall in September.

A large swath of the island still has no electricity, and complaints are widespread among business owners who say losses are mounting and from parents who say their children need to start school. Nearly 20 percent of the island remains without water since Maria hit Sept. 20 with winds of up to 154 mph, killing at least 55 people. Tens of thousands have lost their jobs and some say more than 470,000 people could leave the island in upcoming years.

“If we don’t re-establish power and other basic services, the damage to our economy will be even greater,” said Puerto Rico’s public affairs secretary, Ramon Rosario. “We cannot allow that, and we have established clear goals.”

The difference in estimates came two days after the state-owned utility canceled a heavily scrutinized $300 million contract awarded to Whitefish Energy Holdings. The Montana-based company is located in the hometown of U.S. Interior Secretary Ryan Zinke and had only two-full time employees before the storm hit. Crews subcontracted by Whitefish will finish their projects before Nov. 30, officials said.

Ramos continued to praise Whitefish despite local and federal audits of the contract. “They’ve performed very well,” he said.

Ramos said he is recommending that Oklahoma-based Cobra Acquisitions, which has a $200 million contract with the government, subcontract the workers Whitefish had employed if the contract allows for it. Ramos also said Cobra’s contract is “practically” the same as the one awarded to Whitefish.

He said the power company sent letters requesting help and received responses from the American Public Power Association and Edison Electric Institute. In addition, New York Gov. Andrew Cuomo announced Thursday that his state’s power authority would send 350 workers and 220 bucket trucks next week along with special equipment. It also is sending a tactical power restoration team that includes 28 engineers and 15 damage assessment experts.

The Army Corps of Engineers said it also expects about 2,100 workers to arrive by mid-November to help restore power.

 
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Ivanka Trump, U.S. President Donald Trump’s daughter and informal adviser, told a summit in Tokyo Friday that the world must boost women and minority participation in the fields of science, technology, engineering and math (STEM).

Ivanka Trump, seen as an important influence on her father, has made women’s issues one of her signature policy areas since beginning her role at the White House. Her comments came ahead of her father’s trip to Asia, his first since taking office in January, that begins in Japan on Sunday.

 

WATCH: Ivanka Trump on Women’s Participation in STEM Fields

“Female and minority participation in STEM fields is moving in the wrong direction,” she said at the World Assembly for Women summit. “We must create equal participation in these traditionally male-dominated sectors of our economy.”

She said her father’s tax reforms, unveiled by Republicans in the U.S. House of Representatives on Thursday, would benefit American families.

“We are seeking to simplify the tax code, lower rates, expand the child tax credit, eliminate the marriage penalty, and put more money back in the pockets of hard-working Americans,” she told a meeting room in a Tokyo hotel that had a number of empty seats.

Japanese Prime Minister Shinzo Abe said his government was aiming to mobilize women in Japan’s workforce and boost economic growth, launching policies such as improved childcare in his “Womenomics” program.

“We’ve put our full strength into creating an environment where it’s easy for women to work,” Abe said in an opening address to the conference. “I really feel that Japan has come a long way,” he said. 

Japan’s gender gap remains wide despite such efforts, with little progress made since Abe vowed at the United Nations in 2013 to create “a society where women can shine.”

Japan ranked 114 out of 144 in the World Economic Forum’s 2017 Global Gender Gap report, sandwiched between Guinea and Ethiopia and down 13 places since Abe took power.

Abe appointed only two women to ministerial posts in a Cabinet reshuffle in August, down from three and five respectively in his previous two Cabinets. Only 14 percent of Japan’s lawmakers are women.

Men also dominate decision-making in business in Japan. Only 3.7 percent of Japanese-listed company executives were women at the end of July, according to the Cabinet Office, barely changed from 3.4 percent a year earlier.

 
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Though the Trump administration has taken steps to undo regulations aimed at cutting greenhouse gas emissions, experts say economic forces are helping to push down U.S. emissions anyway.

U.N. climate negotiators will meet in Bonn, Germany, November 6-17. It will be their first gathering since President Donald Trump announced the United States would withdraw from the Paris climate agreement.

Trump considers efforts to fight climate change a barrier to economic growth. Promising to dominate global energy markets and put struggling U.S. coal miners back to work, he has taken a series of steps to roll back regulations aimed at fighting climate change. They include moving to revoke the Clean Power Plan, former President Barack Obama’s primary tool for cutting carbon emissions from power plants.

Energy transition

Losing those regulations won’t stop the transition in energy sources that’s already underway, according to George Washington University Solar Institute Director Amit Ronen.

“We’re still going to meet the goals of the Clean Power Plan in most states, even if it’s withdrawn,” he said, “just because we’re substituting so much natural gas and renewables for coal.”

Coal-fired power plants — the most climate-polluting source of electricity — are shutting down across the country. More than 500 closed between 2002 and 2016, and additional plants are slated for closure, according to the Department of Energy. Electric utilities are replacing them with cheaper, cleaner natural gas.

And renewable sources, such as wind and solar, are booming. Prices have plummeted. Renewables are beginning to be cost-competitive with fossil fuels.

Solar tariffs

Though electric utilities are choosing natural gas and renewables over coal, the Trump administration may influence energy markets in other ways.

A case before the International Trade Commission will soon give the president the authority to put tariffs on imported solar panels — and nearly all of them are imported.

The case is billed as an effort to help domestic solar manufacturers. While Trump has not embraced renewable energy, he has said he wants to support U.S. manufacturing jobs.

But solar manufacturing is mostly automated. Far more people work in labor-intensive installation. The Solar Energy Industries Association has opposed measures limiting imports, saying it would cost jobs.

The International Trade Commission recommended tariffs smaller than what the plaintiffs asked for. But Trump gets the last word, expected before mid-January.

Even more severe trade restrictions would not extinguish the renewables industry, however.

“[A tariff] certainly adds cost and might stifle solar development,” said Rhodium Group analyst John Larsen. “But the overall clean energy picture doesn’t get hit too hard.”

That’s because many states and cities have policies requiring electric utilities to use renewable energy, Larsen noted. They are stepping up their efforts to cut greenhouse gases, even as the federal government is pulling back. If solar dips, wind may fill in the gap.

Subsidizing coal, nuclear

The proposal that could have a bigger impact on electricity markets comes from the Trump administration’s Department of Energy.

With so many coal plants shut down and eight nuclear plants on the brink of closure, Secretary Rick Perry said the reliability of the U.S. electric grid is in jeopardy.

Because coal and nuclear plants provide constant power and have their fuel supplies on-site, Perry suggested paying them more than other sources for their electricity.

The proposal has made unusual allies of the natural gas, solar and wind industries. They wrote joint comments opposing it. And critics across the political spectrum have blasted it.

“This has no intellectual depth. It’s unprofessional. It’s badly thought out,” said finance director Tom Sanzillo of the Institute for Energy Economics and Financial Analysis.

Sanzillo noted that the Department of Energy study on which Perry based his recommendations does not show that grid reliability is threatened. And Perry himself rejected a similar proposal as governor of Texas, where the growing influx of wind power was pushing coal plants out of business.

Not fast enough

Ultimately, experts say, the Trump administration has limited powers to save the coal industry.

While coal’s decline is helping to reduce greenhouse gas emissions, however, experts say they are not falling fast enough to avoid the worst of climate change.

Under the Paris climate agreement, nations agreed to keep global warming below 2 degrees Celsius above pre-industrial levels. Former President Obama pledged that the United States would reduce its greenhouse gas emissions by 26 percent to 28 percent below 2005 levels by 2025.

Even the Clean Power Plan, plus other Obama-era regulations, still would have left the United States short of that goal, Larsen said.

“The current U.S. trajectory is not in line with Paris, and the U.S. commitment in Paris wasn’t necessarily on track for 2 degrees,” he said. “It was a starting point, a down payment.

“Hopefully, other countries step up to the plate to fill in some of that gap. But that’s a big if.”

The latest report from the U.N. Environment Program says pledged emission cuts worldwide add up to just one-third of what is needed to keep the planet below the 2-degree target.
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Members of the U.S. International Trade Commission on Tuesday made three different recommendations for restricting solar cell and panel imports on Tuesday, giving President Donald Trump a range of choices to address injury to domestic producers.

The recommendations range from an immediate 35 percent tariff on all imported panels to a four-year quota system that allows the import of up to 8.9 gigawatts of solar cells and modules in the first year. The president’s ultimate decision could have a major impact on the price of U.S. power generated by the sun.

Both supporters and critics of import curbs on solar products were disappointed by the proposals, which were unveiled at a public meeting in Washington.

Trade remedies were requested in a petition earlier this year by two small U.S. manufacturers that said they were unable to compete with cheap panels made overseas, mainly in Asia. The companies, Suniva Inc and the U.S. arm of Germany’s SolarWorld AG, said Tuesday’s recommendations did not go far enough to protect domestic producers.

“The ITC’s remedy simply will not fix the problem the ITC itself identified,” Suniva said in a statement. The company, which is majority owned by Hong Kong-based Shunfeng International Clean Energy, filed the rare Section 201 petition nine days after seeking Chapter 11 bankruptcy protection in April. It had sought a minimum price on panels of 74 cents a watt, nearly double their current cost.

One analyst said the stiffest remedy recommended, a 35 percent tariff on solar panels, would add about 10 percent to the cost of a utility-scale project but would have a negligible impact on the price of residential systems because panels themselves make up a small portion of their overall cost.

“It’s not nearly the doomsday impact we were potentially expecting,” said Camron Barati, a solar analyst with market research firm IHS Markit Technology.

But the top U.S. solar trade group, the Solar Energy Industries Association, said in a statement on Tuesday that any tariffs would be “intensely harmful” to the industry. The group has lobbied heavily against import restrictions on the grounds that they would undermine a 70 percent drop in the cost of solar since 2010 that has made the technology competitive with fossil fuels.

Recommendations

The ITC will deliver its report to Trump by Nov. 13. He will have broad leeway to come up with his own alternative or do nothing at all. Since only two members agreed on the same restrictions, there was no majority recommendation from the four-member commission.

“There is still plenty to be worried about,” said MJ Shiao, who follows the U.S. solar market for GTM Research.

Trump has vowed to protect U.S. manufacturers from low-priced imports, and U.S. Commerce Secretary Wilbur Ross has talked about tariff-rate quotas as a flexible way to protect some industries, allowing imports in as needed, but only up to a certain level before high tariffs kick in.

Commissioners David Johanson and Irving Williamson urged the president to impose an immediate 30 percent tariff on completed solar modules, to be lowered in subsequent years, and a tariff-rate quota on solar cells. Imports of cells in excess of one gigawatt would be subject to a 30 percent tariff that would decline after the first year.

ITC Chair Rhonda Schmidtlein recommended an immediate 35 percent four-year tariff on imported solar modules, with a four-year tariff rate quota on solar cells. This would impose a 30 percent tariff on imports exceeding 0.5 gigawatts and 10 percent on imports below that level. These tariffs would decline over a four-year period.

In the most lenient recommendation, Commissioner Meredith Broadbent said the president should impose a four-year quota system that allows for imports of up to 8.9 gigawatts of solar cells and modules in the first year.
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Property damage claims from a series of deadly October wildfires now exceed $3.3 billion, California Insurance Commissioner Dave Jones said Tuesday.

The figure represented claims for homes and businesses insured by 15 companies and was more than triple the previous estimate of $1 billion. Jones said the number would continue to rise as more claims were reported.

The amount of claims now reported means that the fires caused more damage than California’s 1991 Oakland Hills fire, which was previously the state’s costliest, with $2.7 billion in damage in 2015 dollars, according to the Property Casualty Insurers Association of America.

Forty-three people were killed in the October blazes that tore through Northern California, including the state’s renowned winemaking regions in Napa and Sonoma counties. They destroyed at least 8,900 buildings as more than 100,000 people were forced to evacuate. It was the deadliest series of fires in California history.

Several dozen buildings were also damaged or destroyed in fires in Southern California’s Orange County.

“Behind each and every one of these claims … are ordinary people, Californians who lost their homes, lost their vehicles, in some cases whose family members lost their lives,” said Jones, a Democrat who is running for attorney general.

Jones said there were just over 10,000 claims for partial home losses, more than 4,700 total losses and about 700 for business property. There were 3,200 claims for damaged or destroyed personal vehicles, 91 for commercial vehicles, 153 for farm equipment and 111 for watercraft.

The figures do not reflect uninsured losses, including public infrastructure and the property of people who were uninsured or underinsured.

Arson suspect’s warning

Meanwhile, a man facing arson charges for a wildfire that destroyed two homes south of the San Francisco Bay Area had an ominous message for a prosecutor during a court hearing Tuesday: “You’re next.”

Marlon Coy, 54, uttered the words while glaring at Santa Cruz County District Attorney Jeffrey Rosell while he explained four of the felony charges Coy is facing, the Santa Cruz Sentinel reported.

Coy pleaded not guilty to charges of arson of a nondwelling, arson causing bodily injury and being a felon in possession of a firearm, the newspaper reported.

Witnesses saw Coy start the fire on October 16 near a property in Santa Cruz County connected to someone with whom he had a dispute, sheriff’s officials said.

Coy was arrested in possession of jewelry and a bicycle taken from a home that had been burglarized while under evacuation, according to sheriff’s officials.
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Britain is accelerating preparations for “all eventualities” when it leaves the European Union, but both sides are hopeful an agreement on stepping up talks to unravel more than 40 years of partnership will be sealed soon.

With only 17 months remaining until Britain’s expected departure, the slow pace of talks has increased the possibility that London will leave without a deal, alarming business leaders who say time is running out for them to make investment decisions.

British and EU negotiators met in Brussels on Tuesday to try to agree a schedule for further divorce talks, with an initial proposal from the bloc to hold three more rounds before the end of the year not winning instant approval from London.

The pressure has spurred the British government to step up its Brexit plans, employing thousands more workers and spending millions to make sure customs posts, laws and systems work on day one of Brexit, even without a deal on a future relationship.

At a meeting with her ministers Tuesday, Prime Minister Theresa May was updated on plans for the tax and customs authority to add 3,000 to 5,000 workers next year and for spending of 500 million pounds ($660.45 million) for Brexit.

Domestic preparations

“Alongside the negotiations in Brussels, it is crucial that we are putting our own domestic preparations in place so that we are ready at the point that we leave the EU,” May’s spokesman told reporters.

“The preparatory work has seen a significant acceleration in recent months. Departments are preparing detailed delivery plans for each of the around 300 programs underway across government.”

May wants to silence critics in her ruling Conservative Party who are pressing her to walk away from talks, which have faltered over how much Britain should pay to leave the bloc.

Brexit campaigners are demanding that Britain leave with no deal if the talks do not move on beyond a discussion of the divorce settlement on a so-called Brexit bill, EU citizens rights and the border with EU member Ireland by December.

Brexit minister David Davis said Tuesday that he thought Britain would agree on some kind of basic deal with the European Union, even in the “very improbable” eventuality that they failed to agree on a trade deal.

Better tone

In a sign that an improved tone between the two sides, struck at a summit earlier this month, was continuing, EU chief negotiator Michel Barnier reaffirmed his message in the Slovak capital, Bratislava, that he was ready to “speed up negotiations.”

May’s government has also long said it would welcome an acceleration in the talks. But the sides have yet to agree on how to do that following a top-level meeting in Brussels on October 19-20.

Barnier has proposed three rounds — one that did not take place last week, and two more in the weeks starting November 16 and December 4. London prefers continuous talks.

“We are ready to accelerate, but we must have something to talk about,” said an EU official.

This was what Britain’s Oliver Robbins and Barnier’s deputy, Sabine Weyand, were seeking to agree on in Brussels on Tuesday.

Before leaving the EU, May faces a struggle to get parliamentary support for a law to sever political, financial and legal ties with the bloc — the EU Withdrawal Bill, for which lawmakers have proposed hundreds of amendments.

Asked whether May was preparing to offer a concession over a final vote on any deal struck with the EU, her spokesman said there was “lots of speculation in relation to Brexit.”

“We’ve always said that we’ll do whatever is necessary,” he said.
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Mexico announced Tuesday that its economy shrank 0.2 percent in the third quarter compared with the previous period amid uncertainty related to renegotiations of the North American Free Trade Agreement and local slowdowns caused by natural disasters.

 

Alfredo Coutino, Latin America director at Moody’s Analytics, said the contraction came after Mexico posted GDP gains of 0.7 percent and 0.6 percent in the first two quarters and confirms an expected deceleration in the second half of 2017.

 

“Investment decisions were affected by uncertainty over the possibility that NAFTA negotiations would break off,” Coutino wrote in a report. He added that monetary tightening and high inflation “restrained consumption,” while “activity was partially interrupted in cities affected by the two earthquakes in September and the hurricanes that struck the southern part of the country.”

 

The government’s National Institute of Statistics and Geography reported the contraction and said that GDP for the third quarter was 1.7 percent higher than in the same period last year.

 

Coutino forecast that Mexico’s economy will grow about 1 percent in the fourth quarter and hit about 1.8 percent on the year, down from 2017 and short of target.

 
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ExxonMobil has promised to upgrade pollution controls at eight of its manufacturing facilities along the U.S. Gulf Coast under an agreement it reached with federal authorities.

The petrochemical giant will spend about $300 million to install pollution controls at the plants to settle allegations that it violated U.S. environmental law by failing to properly monitor industrial flares at its petrochemical plants, resulting in illegal air pollution.

The U.S. Justice Department, in a statement, said the Exxon facilities — located in Louisiana and Texas — will operate new air pollution control and monitoring technology to reduce the harmful emissions.

“Once fully implemented, the pollution controls required by the settlement are estimated to reduce harmful air emissions of volatile organic compounds (VOCs) by more than 7,000 tons per year,” the DOJ said in a statement. “The settlement is also expected to reduce toxic air pollutants, including benzene, by more than 1,500 tons per year.”

The Justice Department describes VOCs as key components in the formation of smog, which can irritate lungs and inflame respiratory issues like asthma. Chronic exposure can lead to leukemia and adverse reproductive effects in women, the DOJ said.

Exxon also will be required to spend $1 million on a project to plant trees in Baytown, Texas, and purchase a $1.5 million mobile air quality monitoring vehicle for use by Louisiana’s environmental protection agency.
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Argentina’s President Mauricio Macri vowed to press ahead with reforms to the country’s tax, labor and retirement systems in a speech on Monday, a week after his “Let’s Change” coalition swept to victory at the polls in midterm elections.

The government will present a tax reform proposal this Tuesday or Wednesday, and an amnesty plan for companies that hired workers informally in the coming days, Macri said. He added that the government would convene a commission to propose changes to the retirement system in coming weeks.

The speech marked a roadmap for the second half of Macri’s four-year term, as he seeks to implement business-friendly reforms to attract investors who avoided the country during more than a decade of populist rule.

“We need lower taxes, more public works, and all this we need to achieve with fiscal balance,” Macri told a gathering of lawmakers, governors, union leaders, judges and others.

Investors have been encouraged by the reforms Macri has implemented since taking office in December 2015, including lifting foreign exchange controls, settling with holdout creditors, and lowering export taxes.

But significant investment has not arrived. Companies have demanded lower costs, while credit agencies are concerned about a deep fiscal deficit.

Macri’s coalition swept the five most populous areas in midterm elections, giving him a broader mandate to pass reforms, though it still lacks majorities in both chambers of Congress.

Macri said his government had reduced the country’s tax burden, and wanted to make the system “simpler, clearer, and fairer.”

He reiterated the government’s aim of slashing Argentina’s fiscal deficit by one percentage point of gross domestic product per year.

And he also vowed to reform the country’s retirement system, a large driver of government spending.

“We need to start a mature and honest conversation about our retirement and pension system,” Macri said. “Our retirement system hides serious inequities, and it is not sustainable.”

While Macri has said he does not plan major changes to the country’s labor code, he has said the government plans to provide incentives to companies to formalize undeclared workers and work with unions in specific sectors to lower costs.

Macri also pledged reforms to the country’s justice system to combat corruption. Cabinet Chief Marcos Pena told journalists that the resignation on Monday of chief prosecutor Alejandra Gils Carbo, appointed during the former administration of President Cristina Fernandez, was a step towards making the judiciary more independent.
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Chile’s frontrunning center-right presidential candidate, Sebastian Pinera, on Monday unveiled a $14 billion, four-year spending plan focused on proposed reforms to the country’s tax and pension systems and new investments in infrastructure and hospitals.

The former president, who governed from 2010 to 2014, said he would pay for his proposals by cutting “unnecessary” government spending and simplifying the tax code to encourage investment and boost growth and the country’s coffers.

Recent opinion polls show Pinera, 67, with a wide lead over his seven rivals in the Nov. 19 first-round election. Pinera would also beat his two closest contenders, leftists Alejandro Guillier and Beatriz Sanchez, in a runoff if no candidate receives at least 50 percent of the vote, according to pollster CEP last week.

Guillier, the frontrunner on the left, has yet to put a price tag on his proposals, which track the policies of outgoing center-left President Michelle Bachelet. Sanchez has proposed a $13.4 billion plan of deeper social and economic reforms, paid for in part by a tax on the “super-rich.”

The 67-year-old Pinera, a billionaire who has campaigned on a program of fiscal austerity, is benefiting from disenchantment with Bachelet, whose program of progressive reforms coincided with a downturn in the price of copper, which can account for as much as 15 percent of gross domestic product in Chile, the world’s top producer.

“Half of the financing for my program will come from reallocations drawn from ineffective government programs … and a reduction of unnecessary spending in the public sector,” Pinera said in a 124-page paper detailing his proposals.

Pinera’s plan to reform the pension system would cost about $3 billion and include new subsidies to raise pensions for women and the middle class, as well as incentives to encourage workers to retire later, Pinera said in the document.

The current retirement system, introduced in the 1980s during Augusto Pinochet’s dictatorship, was historically seen as a model by many economists, but it has been criticized in recent years on a number of fronts, including what many see as insufficient payouts.

Pinera, a businessman-turned-politician, has also called for a $2.7 billion overhaul of Bachelet’s tax reform, to provide “more certainty and incentives for saving and investment,” as well as $3 billion of investment in hospitals and infrastructure.
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The leaders of Azerbaijan, Turkey and Georgia launched an 826-km (500-mile) rail link connecting the three countries on Monday, establishing a freight and passenger link between Europe and China that bypasses Russia.

The line, which includes 105 km of new track, will have the capacity to transport one million passengers and 5 million tons of freight.

The three countries are linked by the BP-led Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas line, but trade links between Turkey and the Caucasus region are limited. The new Baku-Tbilisi-Kars railway (BTK) promises to provide an economic boost to the region.

“Baku-Tbilisi-Kars is part of a big Silk Road and it’s important that we have implemented this project using our own funds,” Turkish President Tayyip Erdogan said at the railway’s inauguration ceremony attended by Azeri President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili.

Starting in Baku, the capital of Azerbaijan, trains will stop in the Georgian capital Tbilisi, pass through gauge-changing facilities in the Georgian town of Akhalkalaki and end their journey in the Turkish town of Kars.

The project’s total cost rose to more than $1 billion from an initial estimate of about $400 million. The bulk of that financing came from Azerbaijan’s state oil fund.

The rail link between Azerbaijan and Georgia was modernized under the project, which was launched in 2007. Its completion had been postponed several times since 2011.

“Several European countries have expressed an interest in this project and Azerbaijan is in talks with them,” Aliyev said, adding Kazakhstan and other countries in Central Asia were interested in transporting their goods via the BTK.

The new link will reduce journey times between China and Europe to around 15 days, which is more than twice as fast as the sea route at less than half the price of flying.

Trains can depart from cities in China, cross into Kazakhstan at the Khorgos Gateway, be transported across the Caspian Sea by ferry to the New Port of Baku and then be loaded directly onto the BTK and head to Europe.
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The African Development Bank has called off a loan to Nigeria that would have helped fund the country’s budget, instead redirecting the money to specific projects, a vice president at the lender said on Monday.

The African Development Bank had been in talks with Nigeria for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017, as the government tried to reinvigorate its stagnant economy with heavy spending.

But Nigeria refused to meet the terms of international lenders, which also included the World Bank, to enact various reforms, including allowing its currency, the naira, to float freely on the foreign exchange market.

Rather than loan Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects,” Amadou Hott, African Development Bank vice president for power, energy, climate change and green growth, told Reuters in an interview during a Nordic-African business conference in Oslo.

Because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing, Hott said.

No one from the Nigerian finance ministry was immediately available to comment.

Nigeria’s 2017 budget, 7.44 trillion naira, is just one in a series of record budgets that the government has faced obstacles funding, pushing it to seek loans from overseas.

In late 2016, the AfDB agreed to lend Nigeria a first tranche of $600 million out of $1 billion. But negotiations over economic reform later bogged down, blocking attempts to secure the second tranche of $400 million, sources told Reuters then.

Now, AfDB’s loans will be more targeted, Hott said.

“It’s hundreds of millions of dollars, just in one go, that we were supposed to provide in budget support, but we will move into real projects … ” he said.

Earlier this month, the head of Nigeria’s Debt Management Office said the country is still in talks with the World Bank for a $1.6 billion loan, which will help plug part of an expected $7.5 billion deficit for 2017.

The administration is also trying to restructure its debt to move away from high-interest, naira-denominated loans and towards dollar loans, which carry lower rates.
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U.S. President is expected to nominate Federal Reserve Governor Jerome Powell as the next chairman of the central bank, senior administration officials said Monday.

Powell is a Republican centrist who appears inclined to continue the Fed’s strategy of gradual interest rate hikes.

But officials say Trump hasn’t made up his mind and could change it.

Powell would represent a middle-ground pick for Trump, who is also considering current Democratic Fed Chair Janet Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

Powell could, however, relax some of the stricter financial rules that were enacted after the 2008 financial crisis. Trump has complained that those rules have been too restrictive.

The decision over the Fed’s next leader is overshadowing this week’s meeting of the Federal Reserve’s policy meeting.

Trump said Friday he has “someone very specific in mind” for the Fed. “It will be a person who, hopefully, will do a fantastic job,” Trump said in a short video message posted on Instagram and Twitter.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish” approach — more inclined to raise rates to fight inflation than to keep rates low to support the job market. Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.

 

Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010 to prevent another crisis.
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President Donald Trump’s plan for overhauling the U.S. tax system faced growing opposition from interest groups on Sunday, as Republicans prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes.

Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change for home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments.

Trump and Republicans have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6 trillion in tax cuts for businesses and individuals faces challenges even from rank-and-file House Republicans.

House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump’s desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year.

The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a $5,500 tax credit but says it was rebuffed by House Republican leaders.

“We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” NAHB chief executive Jerry Howard told Reuters.

Republicans warned that the Trump tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks.

“When groups start rallying against things and they succeed, everything starts unraveling,” Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation.

Anxiety in high-tax states

One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes (SALT), which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough House Republicans to stymie legislation.

The top House Republican on tax policy gave ground over the weekend, saying he would allow a deduction for some local taxes to remain.

“We are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” House Ways and Means Committee Chairman Kevin Brady said in a statement.

But the gesture appeared to do little to turn the tide of opposition to SALT’s elimination.

“I’m not going to sign onto anything until the full package is fully analyzed by economists,” Representative Peter King of New York told the Fox News program Sunday Morning Futures. “The fact that we’re getting it at the eleventh hour raises real issues with me,” he added.

A lobby coalition representing state and local governments, realtors and public unions rejected Brady’s statement outright, saying the move would “unfairly penalize taxpayers in states that rely significantly on income taxes.”

House Republicans have also faced opposition from Trump and others after proposing to sharply curtail tax-free contributions to 401(k) programs and move retirement savings to a style of account that allows tax-free withdrawals, rather than the tax-exempt contributions that are popular with 401(k) investors.

House Republicans now say they could permit higher 401(k) contribution limits but continue to talk about tax-free withdrawals. “We will expand the amount that you can invest. But we’ll also give you an option to actually not be taxed later in life,” House Republican leader Kevin McCarthy told Fox News.

The current cap on annual 401(k) tax-free contributions is $18,000.

Corker said congressional tax committees seem to be falling short of their goal to eliminate $4 trillion in tax breaks to prevent the Trump plan from adding to the federal deficit.

“They’re having great difficulty just getting to $3.6 trillion,” said the Tennessee Republican, who has vowed to vote against tax reform if it increases a federal debt load that stands at more than $20 trillion.

Ohio’s Republican governor, John Kasich, told Fox News Sunday that spending on entitlement programs such as Medicare, Medicaid and Social Security should also be reviewed as part of the effort to pay for tax cuts.

“It may be separate from the tax bill, but it needs to happen,” Kasich said.
…

Xavier Gabriel can take some credit if the tiny Catalan mountain town of Sort is one of the most famous in Spain.

He runs a lottery shop called La Bruja de Oro, or The Golden Witch, in a town whose name, aptly, means “Luck” in Catalan. Its fortune in having sold many prize-winning tickets has made it a household name and a successful online business.

But the crisis surrounding Catalonia’s push for independence has changed life for 60-year-old Gabriel. He joined more than 1,500 companies in moving their official headquarters out of the wealthy region in recent weeks. Their main fear: that they would no longer be covered by Spanish and European Union laws if Catalonia manages to break away, dragging their businesses into unknown territory.

“The time had come to make a decision,” said Gabriel, who employs 16 people and describes himself as a proud Catalan.

​Hedging their bets

Like Gabriel’s, the vast majority of companies that moved their headquarters didn’t transfer workers or assets, such as bank holdings or production equipment. So far, it’s mainly a form of legal insurance. But as the political crisis escalates, the risk is that companies are deferring investments and hiring. There is evidence that tourists are holding off booking, perhaps frightened by images in the media of police crackdowns, street demonstrations and strikes.

And the situation risks getting worse before it improves: the central government’s decision Friday to take control of the region could spiral out of control if there is popular resistance, whether by citizens or local authorities like the Catalan police force.

“There is absolutely no doubt that the crisis is having a very damaging effect on the economy,” said Javier Diaz Gimenez, an economics professor at Spain’s prestigious IESE Business School.

Financial markets in Spain have so far fallen only modestly, reflecting investors’ apparent belief that the tensions will eventually be resolved. The Spanish government has called a regional election in Catalonia for Dec. 21 and could later consider revisions to the constitution that might placate some of the independence supporters.

But that could take some time, Diaz Gimenez says, given how confrontational both sides have been.

Banks leave

The list of businesses moving headquarters includes Catalonia’s top two banks, Caixabank and Sabadell, which are among Spain’s top five lenders. Then there is the Codorniu cava sparkling wine maker for which Catalonia is famous. Another well-known cava maker, Freixenet, is also planning to follow if the independence drive continues. Publishing giant Planeta, the world’s leading Spanish-language publisher and second biggest publisher in France, has also moved its official address out of Catalonia.

Caixabank says it suffered a moderate but temporary run on deposits because of the crisis, but said it has since recovered and was adamant the move was permanent.

Shares for Caixabank, Sabadell and some other companies have been volatile, falling after the Oct. 1 vote for independence and jumping sharply when they announced their decision to move headquarters.

Tip of the iceberg

Lottery shop owner Gabriel says ticket sales this month are up nearly 300 percent over last year, a rise he attributed to popular support for his decision to move his business.

Diaz Gimenez said the decisions to move headquarters, while not immediately affecting jobs, were “just the tip of the iceberg.”

“Plans to relocate firms or invest elsewhere are going to accelerate and some of it is going to go to, say, Poland, and it’s never going to come back,” he said.

“People that were thinking about investing in Spain and Barcelona are starting to think again,” he said. “It’s not just Catalonia. It’s the mismanagement by Spain, which is proving that it’s not a serious country because it cannot solve this thing.”

Spanish economy humming

The turmoil, ironically, comes just as Spain has been enjoying some of the fastest economic growth in Europe.

Its economy, the fourth-largest in the 19-country eurozone, grew by a hefty quarterly rate of 0.9 percent in the second quarter. The government has maintained its forecast for growth in 2017 at 3.1 percent, but revised its estimate for 2018 from 2.6 percent to 2.3 percent because of the political crisis. Moody’s credit rating agency has warned that a continued political impasse and, ultimately, independence for Catalonia would severely hurt the country’s credit rating.

Billions at stake

Tourism seems to be taking the biggest hit so far.

Experts say spending in the sector in Catalonia in the first two weeks of October — that is, following the independence referendum — was down 15 percent from a year earlier.

Tourism represents about 11 percent of Spain’s 1.1-trillion euro ($1.3 trillion) gross domestic product, with Catalonia and its capital, Barcelona, providing a fifth of that, being the most popular destinations for visitors.

Exceltur, a nonprofit group formed by the 25 leading Spanish tourist groups, expects growth in tourism this year to ease from an estimated 4.1 percent to 3.1 percent.

Reservations in Barcelona alone are down 20 percent compared with last year, it said. If the trend continues in the final three months of the year, it could lead to losses of up to 1.2 billion euros ($1.41 billion) in the sector, which in turn could affect jobs.

Analysts fear that the independence movement’s stated aim of continuing to create as much social and economic chaos for Spain as possible could exacerbate the situation. The Catalan National Assembly group has been openly talking about a boycott against Spain’s top companies and major strike activity.

“Spain, its tourism, everything is very dependent on image,” Diaz Gimenez said. “And this is just killing it.”
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At the 2015 Paris summit, world leaders pledged to take steps to avoid catastrophic climate change. This November in Bonn, Germany, U.N. negotiators will be back, working out the details of how to cut emissions of planet-warming gases. It is the first conference since President Donald Trump said the United States would withdraw from the agreement. That leaves questions about the direction of U.S. greenhouse gas emissions. As VOA’s Steve Baragona reports, the answer is not straightforward.
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Artisans in Mali are hoping that Bogolan, a traditional cotton fabric, will continue to fascinate Western fashion designers and provide jobs at home. VOA’s Teffera Girma Teffera and Bagassi Koura visited a small neighborhood in central Bamako where artisans are hard at work. Salem Solomon narrates.
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