Tasked to Fight Climate Change, a Secretive U.N. Agency Does the Opposite

LONDON — During a contentious meeting over proposed climate regulations last fall, a Saudi diplomat to the obscure but powerful International Maritime Organization switched on his microphone to make an angry complaint: One of his colleagues was revealing the proceedings on Twitter as they happened.

It was a breach of the secrecy at the heart of the I.M.O., a clubby United Nations agency on the banks of the Thames that regulates international shipping and is charged with reducing emissions in an industry that burns an oil so thick it might otherwise be turned into asphalt. Shipping produces as much carbon dioxide as all of America’s coal plants combined.

Internal documents, recordings and dozens of interviews reveal what has gone on for years behind closed doors: The organization has repeatedly delayed and watered down climate regulations, even as emissions from commercial shipping continue to rise, a trend that threatens to undermine the goals of the 2016 Paris climate accord.

One reason for the lack of progress is that the I.M.O. is a regulatory body that is run in concert with the industry it regulates. Shipbuilders, oil companies, miners, chemical manufacturers and others with huge financial stakes in commercial shipping are among the delegates appointed by many member nations. They sometimes even speak on behalf of governments, knowing that public records are sparse, and that even when the organization allows journalists into its meetings, it typically prohibits them from quoting people by name.

Homes are washing away. Much of the nation could become unlivable in the coming decade.

was almost denied a seat. International Registries, which represented the Marshall Islands on the I.M.O., initially refused to yield to the foreign minister, Mr. Woodroofe recalled.

United Nations climate meetings, countries are typically represented by senior politicians and delegations of government officials. At the maritime organization’s environmental committee, however, one in four delegates comes from industry, according to separate analyses by The New York Times and the nonprofit group Influence Map.

Representatives of the Brazilian mining company Vale, one of the industry’s heaviest carbon polluters and a major sea-based exporter, sit as government advisers. So does the French oil giant Total, along with many shipowner associations. These arrangements allow companies to influence policy and speak on behalf of governments.

Connections can be hard to spot. Luiz Gylvan Meira Filho sat on the Brazilian delegation in 2017 and 2018 as a University of Sao Paulo scientist. But he also worked at a Vale-funded research organization and, during his second year, was a paid Vale consultant. In an interview, he described his role as mutually beneficial: Brazilian officials relied on his expertise, and Vale covered his costs.

“Sometimes you cannot tell the difference. Is this actually the position of a nation or the position of the industry?” said David Paul, a Marshallese senator who attended an I.M.O. meeting in 2018.

Hundreds of other industry representatives are accredited observers and can speak at meetings. Their numbers far exceed those of the approved environmental groups. The agency rejected an accreditation request by the Environmental Defense Fund in 2018.

Industry officials and the maritime organization say such arrangements give a voice to the experts. “If you don’t involve the people who are actually going to have to deliver, then you’re going to get a poor outcome,” said Guy Platten, secretary general of the International Chamber of Shipping.

openly opposed strict emissions regulation as a hindrance to economic growth. And an informal bloc of countries and industry groups helped drag out the goal-setting process for three years.

Documents show that China, Brazil and India, in particular, threw up repeated roadblocks: In 2015, it was too soon to consider a strategy. In 2016, it was premature to discuss setting targets. In 2017, they lacked the data to discuss long-term goals.

a Cook Islands diplomat.

The I.M.O. almost never puts environmental policies to a vote, favoring instead an informal consensus-building. That effectively gives vocal opponents blocking power, and even some of the agency’s defenders acknowledge that it favors minimally acceptable steps over decisive action.

So, when delegates finally set goals in 2018, Mr. de Brum’s ambition had been whittled away.

The Marshall Islands suggested a target of zero emissions “by the second half of the century” — meaning by 2050. Industry representatives offered a slightly different goal: Decarbonization should occur “within” the second half of the century, a one-word difference that amounted to a 50-year extension.

Soon, though, the delegates agreed, without a vote, to eliminate zero-emissions targets entirely.

What remained were two key goals:

First, the industry would try to improve fuel efficiency by at least 40 percent. This was largely a mirage. The target was set so low that, by some calculations, it was reached nearly the moment it was announced.

Second, the agency aimed to cut emissions at least in half by 2050. But even this watered-down goal is proving unreachable. The agency’s own data say emissions may rise by 30 percent.

When delegates met last October — five years after Mr. de Brum’s speech — the organization had not taken any action. Proposals like speed limits had been debated and rejected.

What remained was what several delegates called the “refrigerator rating” — a score that, like those on American appliances, identified the clean and dirty ships.

European delegates insisted that, for the system to work, low-scoring ships must eventually be prohibited from sailing.

China and its allies wanted no such consequence.

So Sveinung Oftedal of Norway, the group’s chairman, told France and China to meet separately and compromise.

Delegates worked across time zones, meeting over teleconferences because of the Covid-19 pandemic. Shipping industry officials said they weighed in through the night.

The Marshallese were locked out.

“We’re always being told ‘We hear you,’” Mr. Ishoda said. “But when it comes to the details of the conversation, we’re told ‘We don’t need you to contribute.’”

Ultimately, France ceded to nearly all of China’s requests, records show. The dirtiest ships would not be grounded. Shipowners would file plans saying they intended to improve, would not be required to actually improve.

German delegates were so upset that they threatened to oppose the deal, likely triggering a cascade of defections, according to three people involved in the talks. But European Union officials rallied countries behind the compromise, arguing that Europe could not be seen as standing in the way of even limited progress.

“At I.M.O., that is as always the choice,” said Damien Chevallier, the French negotiator. “We have the choice to have nothing, or just to have a first step.”

All of this happened in secret. The I.M.O.’s summary of the meeting called it a “major step forward.” Natasha Brown, a spokeswoman, said it would empower customers and advocacy groups. “We know from consumer goods that the rating system works,” she said.

But the regulation includes another caveat: The I.M.O. will not publish the scores, letting shipping companies decide whether to say how dirty their ships are.

Ms. Kabua, the Marshallese minister, is under no illusions that reclaiming the diplomatic seat will lead to a climate breakthrough.

But if it works, she said, it might inspire other countries with private registries to do the same. Countries could speak for themselves rather than through a corporate filter.

Regardless of the outcome, the political winds are shifting. The European Union is moving to include shipping in its emissions-trading system. The United States, after years of being minor players at the agency, is re-engaging under President Biden and recently suggested it may tackle shipping emissions itself.

Both would be huge blows to the I.M.O., which has long insisted that it alone regulate shipping.

Suddenly, industry officials say they are eager to consider things like fuel taxes or carbon.

“There’s much more of a sense of momentum and crisis,” said Mr. Platten, the industry representative. “You can argue about, ‘Are we late to it,’ and all the rest. But it is palpable.”

Behind closed doors, though, resistance remains. At a climate meeting last winter, recordings show that the mere suggestion that shipping should become sustainable sparked an angry response.

“Such statements show a lack of respect for the industry,” said Kostas G. Gkonis, the director of the trade group Intercargo.

And just last week, delegates met in secret to debate what should constitute a passing grade under the new rating system. Under pressure from China, Brazil and others, the delegates set the bar so low that emissions can continue to rise — at roughly the same pace as if there had been no regulation at all.

Delegates agreed to revisit the issue in five years.

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Global Shortages During Coronavirus Reveal Failings of Just in Time Manufacturing

In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.

Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.

But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing.

In a time of extraordinary upheaval in the global economy, Just In Time is running late.

“It’s sort of like supply chain run amok,” said Willy C. Shih, an international trade expert at Harvard Business School. “In a race to get to the lowest cost, I have concentrated my risk. We are at the logical conclusion of all that.”

shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.

But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.

a shortage of lumber that has stymied home building in the United States.

Suez Canal this year, closing the primary channel linking Europe and Asia.

“People adopted that kind of lean mentality, and then they applied it to supply chains with the assumption that they would have low-cost and reliable shipping,” said Mr. Shih, the Harvard Business School trade expert. “Then, you have some shocks to the system.”

presentation for the pharmaceutical industry. It promised savings of up to 50 percent on warehousing if clients embraced its “lean and mean” approach to supply chains.

Such claims have panned out. Still, one of the authors of that presentation, Knut Alicke, a McKinsey partner based in Germany, now says the corporate world exceeded prudence.

“We went way too far,” Mr. Alicke said in an interview. “The way that inventory is evaluated will change after the crisis.”

Many companies acted as if manufacturing and shipping were devoid of mishaps, Mr. Alicke added, while failing to account for trouble in their business plans.

“There’s no kind of disruption risk term in there,” he said.

Experts say that omission represents a logical response from management to the incentives at play. Investors reward companies that produce growth in their return on assets. Limiting goods in warehouses improves that ratio.

study. These savings helped finance another shareholder-enriching trend — the growth of share buybacks.

In the decade leading up to the pandemic, American companies spent more than $6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, Britain, France, Canada and China increased their buybacks fourfold, though their purchases were a fraction of their American counterparts.

Repurchasing stock reduces the number of shares in circulation, lifting their value. But the benefits for investors and executives, whose pay packages include hefty allocations of stock, have come at the expense of whatever the company might have otherwise done with its money — investing to expand capacity, or stockpiling parts.

These costs became conspicuous during the first wave of the pandemic, when major economies including the United States discovered that they lacked capacity to quickly make ventilators.

“When you need a ventilator, you need a ventilator,” Mr. Sodhi said. “You can’t say, ‘Well, my stock price is high.’”

When the pandemic began, car manufacturers slashed orders for chips on the expectation that demand for cars would plunge. By the time they realized that demand was reviving, it was too late: Ramping up production of computer chips requires months.

stock analysts on April 28. The company said the shortages would probably derail half of its production through June.

The automaker least affected by the shortage is Toyota. From the inception of Just In Time, Toyota relied on suppliers clustered close to its base in Japan, making the company less susceptible to events far away.

In Conshohocken, Pa., Mr. Romano is literally waiting for his ship to come in.

He is vice president of sales at Van Horn, Metz & Company, which buys chemicals from suppliers around the world and sells them to factories that make paint, ink and other industrial products.

In normal times, the company is behind in filling perhaps 1 percent of its customers’ orders. On a recent morning, it could not complete a tenth of its orders because it was waiting for supplies to arrive.

The company could not secure enough of a specialized resin that it sells to manufacturers that make construction materials. The American supplier of the resin was itself lacking one element that it purchases from a petrochemical plant in China.

One of Mr. Romano’s regular customers, a paint manufacturer, was holding off on ordering chemicals because it could not locate enough of the metal cans it uses to ship its finished product.

“It all cascades,” Mr. Romano said. “It’s just a mess.”

No pandemic was required to reveal the risks of overreliance on Just In Time combined with global supply chains. Experts have warned about the consequences for decades.

In 1999, an earthquake shook Taiwan, shutting down computer chip manufacturing. The earthquake and tsunami that shattered Japan in 2011 shut down factories and impeded shipping, generating shortages of auto parts and computer chips. Floods in Thailand the same year decimated production of computer hard drives.

Each disaster prompted talk that companies needed to bolster their inventories and diversify their suppliers.

Each time, multinational companies carried on.

The same consultants who promoted the virtues of lean inventories now evangelize about supply chain resilience — the buzzword of the moment.

Simply expanding warehouses may not provide the fix, said Richard Lebovitz, president of LeanDNA, a supply chain consultant based in Austin, Texas. Product lines are increasingly customized.

“The ability to predict what inventory you should keep is harder and harder,” he said.

Ultimately, business is likely to further its embrace of lean for the simple reason that it has yielded profits.

“The real question is, ‘Are we going to stop chasing low cost as the sole criteria for business judgment?’” said Mr. Shih, from Harvard Business School. “I’m skeptical of that. Consumers won’t pay for resilience when they are not in crisis.”

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The Small Business Administration’s Gaffes Are Now Her Job to Fix

Isabella Casillas Guzman, President Biden’s choice to run the Small Business Administration, inherited a portfolio of nearly $1 trillion in emergency aid and an agency plagued by controversy when she took over in March. She has been sprinting from crisis to crisis ever since.

Some new programs have been mired in delays and glitches, while the S.B.A.’s best-known pandemic relief effort, the Paycheck Protection Program, nearly ran out of money for its loans this month, confusing lenders and stranding millions of borrowers. Angry business owners have deluged the agency with criticism and complaints.

Now, it’s Ms. Guzman’s job to turn the ship around. “It’s the largest S.B.A. portfolio we’ve ever had, and clearly there’s going to need to be some changes in how we do business,” she said in a recent interview.

When the coronavirus crisis struck and the economy went into a free fall last year, Congress and the Trump administration pushed the Small Business Administration to the forefront, putting it in charge of huge sums of relief money and complicated new programs.

confusing, often-revised loan terms and several technical meltdowns — the program enjoyed some success. Millions of business owners credit it with helping them survive the pandemic and keep more workers employed.

Economists are skeptical about whether the program’s results justify its huge cost, but Mr. Trump and Mr. Biden both embraced the effort as a centerpiece of their economic rescue plans. As the pandemic stretched on and the economy plunged into a recession, the Paycheck Protection Program morphed into the largest business bailout in American history. More than eight million companies got forgivable loans, totaling $788 billion — nearly as much money as the government spent on its three rounds of direct payments to taxpayers.

Fraud is a major concern. Thousands of people took advantage of the rushed program’s minimal documentation requirements and sought illicit loans, according to prosecutors, to fund gambling sprees, Lamborghinis, luxury watches, an alpaca farm and a Medicare fraud scheme. The Justice Department has charged hundreds of people with stealing more than $440 million, and scores of federal investigations are active. (During her confirmation hearing, Ms. Guzman promised that she would “prioritize the reduction of fraud, waste and abuse.”)

There were other problems. Female and minority business owners were disproportionately left out of the relief effort. A last-minute attempt by Mr. Biden to make the program more generous for solo business owners came too late to help many of them. This month, a new emergency popped up: The program ran short of money and abruptly closed to most new applicants.

“There was no warning,” Toby Scammell, the chief executive of Womply, a company that helps borrowers get loans, said of the latest debacle. His company alone has more than 1.6 million applicants caught in limbo.

low-interest disaster loans of up to $500,000 and new grant funds, created by Congress, for two of the hardest-hit industries: the Shuttered Venue Operators Grant for live-event businesses and the Restaurant Revitalization Fund. (The hotel industry is pushing for its own version.)

Each required the agency to create policies and technology systems from scratch. The venue program has been especially rocky. On its scheduled start day, in early April, the application system completely failed, leaving desperate applicants hitting refresh and relying on social media posts for information and updates.

“I turned to my associate director and said, ‘I figured something like this would happen,’” said Chris Zacher, the executive director of Levitt Pavilion, a nonprofit performing arts center in Denver. The Small Business Administration revived the system three weeks later and has received 12,200 applications, but it does not anticipate awarding grants until late May.

have turned into primal screams of pain. (“I SERIOUSLY CANNOT TAKE THIS WITH SBA ANY LONGER” is one of the milder replies.) She said she understood the urgency.

“It’s definitely unprecedented — across the board, across the nation — and we are seeing multiple disasters at the same time,” she said. “The agency is highly focused on just still responding to disaster and implementing this relief as quickly as possible.”

This is Ms. Guzman’s second tour at the Small Business Administration. When President Barack Obama picked Maria Contreras-Sweet in 2014 to take over the agency, Ms. Guzman went along as a senior adviser and deputy chief of staff. The women had met in the mid-1990s. Ms. Guzman, a California native with an undergraduate degree from the University of Pennsylvania’s Wharton School of Business, was hired at 7Up/RC Bottling by Ms. Contreras-Sweet, an executive there.

“I was always impressed with her ability to handle jobs with steep learning curves — she has a quick grasp of complex concepts,” Ms. Contreras-Sweet said.

Ms. Guzman spent her first stint at the agency focused on traditional projects like its flagship lending program, which normally facilitates around $28 billion a year in loans. The time, the job is radically different.

community navigators” program, which will fund local organizations, including nonprofits and government groups, to work closely with businesses owned by people with disabilities or in underserved rural, minority and immigrant communities. It’s an expansion of a grass-roots effort by several nonprofits to get vulnerable businesses access to Paycheck Protection Program loans.

Ms. Guzman said she was bullish about that effort and other agency priorities, like expanding Black and other minority entrepreneurs’ access to capital — but first, like the clients it serves, the Small Business Administration has to weather the pandemic.

And to do that, it has to stop shooting itself in the foot.

The much-awaited second attempt at opening the Shuttered Venue Operators Grant fund was preceded by one final debacle: The agency announced — and then, less than a day before the date, abandoned — a plan to open the first-come-first-served fund on a Saturday. For those seeking aid that has not yet arrived, the incident felt like yet another kick in the teeth.

Ms. Guzman said she was aware of the need for her agency to overcome its limitations and rebuild its checkered reputation.

“This is a pivotal moment in time where we can leverage the interest in small business to really deliver a remarkable agency to them,” she said. “I value being the voice for the 30 million small and innovative start-ups around the country. What I always say to my staff is that I want these businesses to feel like the giants that they are in our economy.”

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Amazon Accused of Manipulating Prices by D.C. Attorney General

The District of Columbia sued Amazon on Tuesday, accusing it of artificially raising prices for products in its ubiquitous online marketplace and around the web by abusing its monopoly power, a sign that regulators in the United States are increasingly turning their attention to the company’s dominance across the economy.

In the lawsuit, the D.C. government said that Amazon had effectively prohibited merchants that use its platform from charging lower prices for the same products elsewhere online. That, in turn, raised prices for those products not just on Amazon’s website but in other marketplaces as well, it said.

“Amazon has used its dominant position in the online retail market to win at all costs,” said Karl Racine, the attorney general for the District of Columbia. “It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor.”

Jodi Seth, a spokeswoman for Amazon, said in a statement that Mr. Racine “has it exactly backwards — sellers set their own prices for the products they offer in our store.” She added that Amazon reserved the right “not to highlight offers to customers that are not priced competitively.”

others raise their prices elsewhere or choose to list solely on Amazon, the largest e-commerce site in the country, to avoid losing their listings. The complaint said “Walmart routinely fields requests from merchants to raise prices on Walmart’s online retail sales platform because the merchants worry that a lower price on Walmart will jeopardize their status on Amazon.”

Absent the policing, sellers “would be able to sell their products on their own or other online retail sales platforms for less than they sell them on Amazon’s platform,” it said.

“Most favored nation” contracts are common across industries, including the cable industry with media business partners. Mr. Racine’s office will have to prove how the price agreements harmed other sellers and were anticompetitive.

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Republicans Push Biden to Divert Federal Aid for Infrastructure

WASHINGTON — From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents.

That turnaround is partly the product of strong income tax receipts, particularly in states that heavily tax high earners and the wealthy, whose finances have fared well in the crisis. The unexpectedly rosy picture is raising pressure on President Biden to repurpose hundreds of billions of dollars of federal aid approved this year, in order to help fund a potential bipartisan infrastructure deal.

Last week, Senator Mitt Romney, Republican of Utah, suggested that Mr. Biden and Republican negotiators look to “some of the funding that’s been sent to states already under the last few bills” to help pay for that agreement. “They don’t know how to use it,” Mr. Romney said. “They could use that money to finance part of the infrastructure relating to roads and bridges and transit.”

Some economists and budget experts support that push, arguing that the money could be better spent elsewhere and that states’ spending plans could add to a risk of rapid inflation breaking out across the country. Other researchers and local budget officials say that the federal aid is rescuing harder-hit cities and states, like New York City and Hawaii, from a cascade of layoffs and spending cuts.

$1.9 trillion economic assistance package that Mr. Biden signed in March. They say the aid will help ensure that the economic rebound does not repeat the years of state and local budget cutting that followed the 2008 financial crisis, which slowed the recovery from recession and contributed to millions of Americans waiting years to reap its benefits.

“We still feel strongly that the state and local plan is critical to ensuring we have a strong insurance policy for the type of strong growth we want, the type of equitable recovery the country deserves,” Gene Sperling, a senior adviser to Mr. Biden who oversees fulfillment of the March assistance package, said in an interview, “and to coming back from the 1.3 million jobs lost at the state and local level.”

Even if the administration wanted to recoup or divert the funds, it is unlikely that it could repurpose the money or make significant changes to how it is used without congressional action.

The debate over the state and local funding comes as Mr. Biden navigates a critical week of negotiations with Republicans over infrastructure in search of a deal, and as he prepares to travel to Cleveland on Thursday to speak about the economy. How to pay for any new spending is a primary hurdle in the talks, with Mr. Biden pushing to raise taxes on corporations and Republicans preferring increased user fees like the gas tax.

Repurposing unspent funds could help advance an agreement, particularly given Republican opposition to bankrolling state aid in previous rescue packages. Democrats pushed hard to include lucrative financial assistance for states, cities and tribes in Mr. Biden’s rescue bill. Republicans fought those efforts, warning they would serve as a “bailout” to high-tax, high-spend liberal states. They also cited a series of projections from Wall Street firms and other analysts suggesting that many states’ revenues were faring better than officials had feared in the early months of the pandemic.

do not need more federal money. That is particularly true in states that do not rely primarily on the tourism or hospitality industries for tax revenues. Those with progressive tax systems that have caught surging revenues from investment income enjoyed by wealthy residents — like Silicon Valley moguls — are also faring well.

California officials expect a $15 billion surplus this fiscal year, after fearing a $54 billion shortfall. Virginia has seen nearly $2 billion in unanticipated revenues. As has Oregon, where economists recently upgraded the state’s revenue forecasts — moving it from projected deficits to surplus — in a report that surprised and delighted many lawmakers.

“It’s extremely surprising,” said Mark McMullen, the Oregon state economist.

“Obviously, when the shutdowns first set in and we saw these catastrophic employment losses, we treated them as a normal recession in our forecasts,” he said.

But surging income tax revenues and several rounds of federal assistance have now put the state “above our prepandemic forecasts,” Mr. McMullen added.

The strong revenue figures come as more federal relief money is just beginning to roll out the door. The Treasury Department began sending funds to states this month and has so far distributed more than $100 billion — about half of what is available to be disbursed immediately. Local governments are expected to receive the rest next year, although states still experiencing a sharp rise in unemployment will get a lump sum right away.

as a much lower risk than Mr. Summers does.

Other analysts warn that state budget situations could sour if the stock market dips sharply or economic growth fizzles. Many cities, like New York, have struggled with sluggish tax revenues and still are reliant on federal to help avoid further layoffs.

New York expects to receive more than $22 billion in Covid-19 federal aid, according to the nonpartisan Citizens Budget Commission. Despite the funds, the city is still anticipating budget gaps in the coming years, the result of declining revenues like property taxes.

In retrospect, said Lucy Dadayan, a senior research associate at the Tax Policy Center, the March law should have included “more targeted funding” for the states and cities that need it most.

$8.8 billion from the federal government. Ben Watkins, the director of the Florida Division of Bond Finance, said the state was using the relief money to invest in infrastructure and water quality projects and directing some of its surplus funds to hurricane preparedness.

He described the windfall as staggering.

“It’s a good problem to have,” Mr. Watkins said, “but that doesn’t mean that it’s not excessive.”

States have substantial leeway in how they use the money, though they are prohibited from using the funds to subsidize tax cuts. Several Republican-led states have sued the Treasury Department, arguing that the restriction infringes on state sovereignty.

The lawsuits do not appear to be slowing the delivery of the funds. Ohio failed to win an injunction blocking the restrictions from being enforced this month, and Missouri had its case thrown out of court after a federal judge said the state did not demonstrate that the law caused it harm.

$26 million corporate tax cut last week, and lawmakers have told The Omaha World-Herald that they believe that by keeping the federal funds in a separate account from the state’s general fund, they will be in compliance with the law.

Nicholas Fandos and Dana Goldstein contributed reporting.

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Defying Critics, Biden and Federal Reserve Insist Economic Recovery Remains on Track

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“We should be on track for a fantastic American comeback summer, full steam ahead,” Senator Mitch McConnell of Kentucky, the Republican leader, said this month on the chamber floor. “From vaccinations to job growth, the new Biden administration inherited favorable trends in every direction.”

“But in several important ways, the decisions of elected Democrats have contributed to slowing the return to normalcy,” he added.

Critics have also questioned the wisdom of the Fed’s commitment to keeping interest rates low and buying bonds even as prices begin to rise. Senator Patrick J. Toomey, Republican of Pennsylvania, said last month that while the Fed “maintains that this bout of inflation will be mild and temporary,” it “may be time for the central bank to consider the alternative.”

Mr. Biden’s aides say they continue to monitor the threat that consumer prices could spiral upward, forcing a rapid policy response that could slam the brakes on economic growth. They say that those risks remain low, and that they see no reason to change course on the president’s agenda, including proposed infrastructure and social programs that the president asserts will bolster the economy for years to come. That agenda could prove a more difficult sell, even among congressional Democrats, if job growth continues to disappoint and inflation soars higher than expected.

Fed officials also remain undaunted. They show no sign of raising interest rates soon and are continuing to buy $120 billion in government-backed bonds each month. Officials have given only the earliest hints that they might begin to tiptoe away from that emergency policy setting. They argue that their job is to manage risks, and the risk of withdrawing help early is bigger than the risk that the economy will overheat.

“I don’t think it would be good for the industries we want to see thriving as the recovery continues for us to close off that recovery prematurely,” Randal K. Quarles, the Fed’s vice chair for supervision, said at a House committee hearing this week as lawmakers pressed him on the threat of inflation. The Fed is independent of the White House, but responsible for keeping prices in check.

Voters give Mr. Biden high marks for his economic stewardship thus far. A solid majority of Americans — including many Republicans — approve of the president’s plans to raise taxes on high earners and corporations to fund new spending on water pipes, electric vehicles, education, child care assistance, paid leave and other programs, according to polling for The New York Times conducted by the online research firm Survey Monkey from May 3 to 9.

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Yes, Pot Is Legal. But It’s Also in Short Supply.

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In New York and New Jersey, the race is on to grow legal weed.

In Orange County, N.Y., there are plans to build a large cannabis cultivation and processing plant on the grounds of a defunct state prison.

About 25 miles south, over the border in New Jersey, an industrial complex once owned by the pharmaceutical giant Merck will be converted into an even bigger marijuana-growing hub.

In Winslow, N.J., about 30 miles outside Philadelphia, a new indoor cultivation complex just celebrated its first harvest.

The advent of legalized adult-use marijuana in New York and New Jersey is an entrepreneur’s dream, with some estimating that the potential market in the densely populated region will soar to more than $6 billion within five years.

medical marijuana market, the supply of dried cannabis flower, the most potent part of a female plant, has rarely met the demand, according to industry lobbyists and state officials. At the start of the pandemic, as demand exploded, it grew even more scarce, patients and business owners said.

The supply gap has narrowed as the statewide inventory of flower and products made from a plant’s extracted oils more than doubled between March of last year and this spring. Still, patients and owners say dispensaries often sell out of popular strains.

“There’s very little stock,” said Shaya Brodchandel, the chief executive of Harmony Foundation in Secaucus, N.J., and president of the New Jersey Cannabis Trade Association. “Almost no wholesale. As we harvest we’re putting it straight into retail.”

Harmony purchased the former Merck site in Lafayette, N.J., late last year and is awaiting permits to begin construction, Mr. Brodchandel said.

Oregon, which issued thousands of cultivation licenses after legalizing marijuana six years ago, has an overabundance of cannabis. But many of the other 16 states where nonmedical marijuana is now legal have faced supply constraints similar to those in New York and New Jersey as production slowly scaled up to meet demand.

“There’s always a dearth of flower in a new market,” said Greg Rochlin, chief executive of the Northeast division of TerrAscend, a cannabis company that operates in Canada and the United States and this month opened New Jersey’s 17th medical marijuana dispensary.

In New York, where the medical marijuana program is smaller and more restrictive than New Jersey’s, the menu of products includes oils, tinctures and finely ground flower suitable for vaping. But the sale of loose marijuana buds for smoking is prohibited, and only 150,000 of the state’s 13.5 million adults who are 21 or older are registered as patients.

With modest demand, there has been little incentive to boost supply. Until now.

Adult-use marijuana sales could begin within a year in New Jersey and in early 2023 in New York, industry experts predict.

Mid-Orange Correctional Facility, which was closed in 2011.

Citiva, a competitor, is also building a new production hub there. A cannabis testing lab and a CBD extract facility, urbanXtracts, are already there.

“We’re calling it a cannabis cluster,” said Michael Sweeton, Warwick’s town supervisor.

“It is the definition of irony,” he added about the reinvented role for a correctional facility that boomed during the war on drugs, imprisoning 750 men at a time and providing 450 jobs.

hemp farmers will play an important role in the effort to generate enough cannabis to satisfy what is quickly expected to become one of the country’s largest marijuana markets.

THC, is used to make CBD oil.

New York’s law also permits individuals to grow as many as six marijuana plants for personal use; New Jersey’s legislation does not allow so-called home grow.

In the coming months, both states are expected to issue regulations to govern the new industry. Each has framed legalization as a social justice imperative and has dedicated a large share of the anticipated tax revenue to communities of color disproportionately harmed by inequities in the criminal justice system.

Trying to balance the goal of building markets focused on social and racial equity against the inherent dominance of multistate corporations with early toeholds in the region will be crucial, officials in New York and New Jersey said.

“They should have that ability to help jump start the market,” Norman Birenbaum, New York’s director of cannabis programs, said about the 10 medical marijuana companies already licensed to operate in the state. But it should not come “at the expense of new entrants,” he said.

Jeff Brown, who runs New Jersey’s cannabis programs, said the market has room — and a crucial need — for newcomers.

The state’s current operators, he said, “are not by themselves going to be able to supply the personal-use market.”

court challenge, and some of the 12 current operators, Mr. Brown said, have been slow to take full advantage of their ability to expand.

This has resulted in caps on the amount of cannabis that can be sold to patients in a single visit. Lines to enter stores, intensified by Covid-19 regulations, are common.

“You can’t always find the strain that you may have found works best for your condition,” said Ken Wolski, a retired nurse who now leads the Coalition for Medical Marijuana, a nonprofit advocacy group. “And that’s a very frustrating thing for patients.”

expansion of a medical marijuana program that had languished under his predecessor, Chris Christie, a Republican.

price of flower in New Jersey hovers between $350 and $450 an ounce before discounts. In California, the average price of an ounce of premium marijuana was about $260, according to priceofweed.com, a frequently cited price directory.

“Popular products run out and prices are still higher than we’d like to see them,” Mr. Brown said. “The key to all that is more competition.”

Last month, Curaleaf, which operates a dispensary and two cultivation facilities in New Jersey, eliminated its half-ounce limit on sales of flower after a strong yield at its new indoor-grow facility in Winslow, said Patrik Jonsson, the company’s regional president responsible for seven Northeast states.

large cultivation facility in Boonton, N.J., operated by TerrAscend, put hundreds of plants into bundles of coconut coir in early 2021 to begin a four-month growing and drying process. Tiered platforms are now filled with rows of pale green and purple-hued plants.

TerrAscend’s new dispensary, in Maplewood, N.J., drew a line of customers within hours of opening earlier this month.

Stuart Zakim, one of the first people in line, talked to a cashier — the “budtender” — about alternatives to the product he originally requested but was told was not in stock.

“You’re not waiting in the dark for your dealer anymore,” said Mr. Zakim, a longtime medical marijuana patient. “You’re walking into a beautiful facility.”

“The supply issue,” he added, “is really the biggest issue.”

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Yes, Pot Is Legal. But It’s Also in Short Supply in NY and NJ

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In New York and New Jersey, the race is on to grow legal weed.

In Orange County, N.Y., there are plans to build a large cannabis cultivation and processing plant on the grounds of a defunct state prison.

About 25 miles south, over the border in New Jersey, an industrial complex once owned by the pharmaceutical giant Merck will be converted into an even bigger marijuana-growing hub.

In Winslow, N.J., about 30 miles outside Philadelphia, a new indoor cultivation complex just celebrated its first harvest.

The advent of legalized adult-use marijuana in New York and New Jersey is an entrepreneur’s dream, with some estimating that the potential market in the densely populated region will soar to more than $6 billion within five years.

medical marijuana market, the supply of dried cannabis flower, the most potent part of a female plant, has rarely met the demand, according to industry lobbyists and state officials. At the start of the pandemic, as demand exploded, it grew even more scarce, patients and business owners said.

The supply gap has narrowed as the statewide inventory of flower and products made from a plant’s extracted oils more than doubled between March of last year and this spring. Still, patients and owners say dispensaries often sell out of popular strains.

“There’s very little stock,” said Shaya Brodchandel, the chief executive of Harmony Foundation in Secaucus, N.J., and president of the New Jersey Cannabis Trade Association. “Almost no wholesale. As we harvest we’re putting it straight into retail.”

Harmony purchased the former Merck site in Lafayette, N.J., late last year and is awaiting permits to begin construction, Mr. Brodchandel said.

Oregon, which issued thousands of cultivation licenses after legalizing marijuana six years ago, has an overabundance of cannabis. But many of the other 16 states where nonmedical marijuana is now legal have faced supply constraints similar to those in New York and New Jersey as production slowly scaled up to meet demand.

“There’s always a dearth of flower in a new market,” said Greg Rochlin, chief executive of the Northeast division of TerrAscend, a cannabis company that operates in Canada and the United States and this month opened New Jersey’s 17th medical marijuana dispensary.

In New York, where the medical marijuana program is smaller and more restrictive than New Jersey’s, the menu of products includes oils, tinctures and finely ground flower suitable for vaping. But the sale of loose marijuana buds for smoking is prohibited, and only 150,000 of the state’s 13.5 million adults who are 21 or older are registered as patients.

With modest demand, there has been little incentive to boost supply. Until now.

Adult-use marijuana sales could begin within a year in New Jersey and in early 2023 in New York, industry experts predict.

Mid-Orange Correctional Facility, which was closed in 2011.

Citiva, a competitor, is also building a new production hub there. A cannabis testing lab and a CBD extract facility, urbanXtracts, are already there.

“We’re calling it a cannabis cluster,” said Michael Sweeton, Warwick’s town supervisor.

“It is the definition of irony,” he added about the reinvented role for a correctional facility that boomed during the war on drugs, imprisoning 750 men at a time and providing 450 jobs.

hemp farmers will play an important role in the effort to generate enough cannabis to satisfy what is quickly expected to become one of the country’s largest marijuana markets.

THC, is used to make CBD oil.

New York’s law also permits individuals to grow as many as six marijuana plants for personal use; New Jersey’s legislation does not allow so-called home grow.

In the coming months, both states are expected to issue regulations to govern the new industry. Each has framed legalization as a social justice imperative and has dedicated a large share of the anticipated tax revenue to communities of color disproportionately harmed by inequities in the criminal justice system.

Trying to balance the goal of building markets focused on social and racial equity against the inherent dominance of multistate corporations with early toeholds in the region will be crucial, officials in New York and New Jersey said.

“They should have that ability to help jump start the market,” Norman Birenbaum, New York’s director of cannabis programs, said about the 10 medical marijuana companies already licensed to operate in the state. But it should not come “at the expense of new entrants,” he said.

Jeff Brown, who runs New Jersey’s cannabis programs, said the market has room — and a crucial need — for newcomers.

The state’s current operators, he said, “are not by themselves going to be able to supply the personal-use market.”

court challenge, and some of the 12 current operators, Mr. Brown said, have been slow to take full advantage of their ability to expand.

This has resulted in caps on the amount of cannabis that can be sold to patients in a single visit. Lines to enter stores, intensified by Covid-19 regulations, are common.

“You can’t always find the strain that you may have found works best for your condition,” said Ken Wolski, a retired nurse who now leads the Coalition for Medical Marijuana, a nonprofit advocacy group. “And that’s a very frustrating thing for patients.”

expansion of a medical marijuana program that had languished under his predecessor, Chris Christie, a Republican.

price of flower in New Jersey hovers between $350 and $450 an ounce before discounts. In California, the average price of an ounce of premium marijuana was about $260, according to priceofweed.com, a frequently cited price directory.

“Popular products run out and prices are still higher than we’d like to see them,” Mr. Brown said. “The key to all that is more competition.”

Last month, Curaleaf, which operates a dispensary and two cultivation facilities in New Jersey, eliminated its half-ounce limit on sales of flower after a strong yield at its new indoor-grow facility in Winslow, said Patrik Jonsson, the company’s regional president responsible for seven Northeast states.

large cultivation facility in Boonton, N.J., operated by TerrAscend, put hundreds of plants into bundles of coconut coir in early 2021 to begin a four-month growing and drying process. Tiered platforms are now filled with rows of pale green and purple-hued plants.

TerrAscend’s new dispensary, in Maplewood, N.J., drew a line of customers within hours of opening earlier this month.

Stuart Zakim, one of the first people in line, talked to a cashier — the “budtender” — about alternatives to the product he originally requested but was told was not in stock.

“You’re not waiting in the dark for your dealer anymore,” said Mr. Zakim, a longtime medical marijuana patient. “You’re walking into a beautiful facility.”

“The supply issue,” he added, “is really the biggest issue.”

View Source

Republicans Reject Biden’s Bipartisan Infrastructure Deal

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WASHINGTON — The Biden administration sent Senate Republicans an offer on Friday for a bipartisan infrastructure agreement that sliced more than $500 billion off the president’s initial proposal, a move that White House officials hoped would jump-start the talks but that Republicans swiftly rejected.

The lack of progress emboldened liberals in Congress to call anew for Mr. Biden to abandon his hopes of forging a compromise with a Republican conference that has denounced his $4 trillion economic agenda as too expensive and insufficiently targeted. They urged the president instead to begin an attempt to move his plans on a party-line vote through the same process that produced his economic stimulus legislation this year.

Mr. Biden has said repeatedly that he wants to move his infrastructure plans with bipartisan support, which key centrist Democrats in the Senate have also demanded. But the president has insisted that Republicans spend far more than they have indicated they are willing to.

He also says that the bill must contain a wide-ranging definition of “infrastructure” that includes investments in fighting climate change and providing home health care, which Republicans have called overly expansive.

countered with a $568 billion plan, though many Democrats consider that offer even smaller because it includes extensions of some federal infrastructure spending at expected levels. In a memo on Friday to Republicans, obtained by The New York Times, Biden administration officials assessed the Republican offer as no more than $225 billion “above current levels Congress has traditionally funded.”

The president’s new offer makes no effort to resolve the even thornier problem dividing the parties: how to pay for that spending. Mr. Biden wants to raise taxes on corporations, which Republicans oppose. Republicans want to repurpose money from Mr. Biden’s $1.9 trillion economic aid package, signed in March, and to raise user fees like the gas tax, which the president opposes.

Mr. Biden “fundamentally disagrees with the approach of increasing the burden on working people through increased gas taxes and user fees,” administration officials wrote in their memo to Republican negotiators. “As you know, he made a commitment to the American people not to raise taxes on those making less than $400,000 per year, and he intends to honor that commitment.”

Still, the new proposal shows some movement from the White House. It cuts out a major provision of Mr. Biden’s “American Jobs Plan”: hundreds of billions of dollars for advanced manufacturing and research and development efforts meant to position the United States to compete with China for dominance in emerging industries like advanced batteries. Lawmakers have included some, but not all, of the administration’s proposals in those areas in a bipartisan bill currently working its way through the Senate.

Mr. Biden’s counteroffer would also reduce the amount of money he wants to spend on broadband internet and on highways and other road projects. He would essentially accept the Republicans’ offer of $65 billion for broadband, down from $100 billion, and reduce his highway spending plans by $40 billion to meet them partway. And it would create a so-called infrastructure bank, which seeks to use public seed capital to leverage private infrastructure investment — and which Republicans have pushed for.

Republican senators who were presented the offer in a conference call with administration officials on Friday expressed disappointment in it, even as they vowed to continue talks.

“During today’s call, the White House came back with a counteroffer that is well above the range of what can pass Congress with bipartisan support,” said Kelley Moore, a spokeswoman for Senator Shelley Moore Capito of West Virginia, who is leading the Republican negotiating group.

“There continue to be vast differences between the White House and Senate Republicans when it comes to the definition of infrastructure, the magnitude of proposed spending, and how to pay for it,” Ms. Moore said. “Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden.”

The updated White House offer drew immediate pushback from progressives as well, illustrating the extent to which the forces pushing against a deal are bipartisan. Senator Edward J. Markey, Democrat of Massachusetts, urged his party not to “waste time” haggling over details with Republicans who do not share their vision for what the country needs.

“A smaller infrastructure package means fewer jobs, less justice, less climate action, and less investment in America’s future,” Mr. Markey said in a news release.

Democratic leaders on Capitol Hill have watched the talks skeptically, wary that Republicans will eat up valuable time on the legislative calendar and ultimately refuse to agree to a deal large enough to satisfy liberals. While they have given the White House and Republican senators latitude to pursue an alternative, party leaders are under increasing pressure from progressives to move a bill unilaterally through the budget reconciliation process in the Senate.

They have quietly taken steps to make that possible in case the talks collapse. Aides to Senators Chuck Schumer, Democrat of New York and the majority leader, and Bernie Sanders, independent of Vermont and the chairman of the Budget Committee, met on Thursday with the Senate parliamentarian to discuss options of proceeding without Republicans under the rules.

Biden administration officials were frustrated that Republicans did not move more toward the president in a new offer they presented this week in negotiations on Capitol Hill. They made clear to Republicans on Friday that they expected to see significant movement in the next counteroffer, and that the timeline for negotiations was growing short, a person familiar with the discussions said.

The administration may soon find itself negotiating with multiple groups of senators. A different, bipartisan group plans to meet on Monday night to discuss spending levels and proposals to pay for them. Members of the group — which includes Mitt Romney of Utah, Susan Collins of Maine, Bill Cassidy of Louisiana and Rob Portman of Ohio, all Republicans, as well as Kyrsten Sinema of Arizona and Joe Manchin III of West Virginia, both Democrats — helped draft a bipartisan coronavirus relief bill in December.

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