The share of people living in poverty in the United States fell to a record low last year as an enormous government relief effort helped offset the worst economic contraction since the Great Depression.
In the latest and most conclusive evidence that poverty fell because of the aid, the Census Bureau reported on Tuesday that 9.1 percent of Americans were living below the poverty line last year, down from 11.8 percent in 2019. That figure — the lowest since records began in 1967, according to calculations from researchers at Columbia University — is based on a measure that accounts for the impact of government programs. The official measure of poverty, which leaves out some major aid programs, rose to 11.4 percent of the population.
The new data will almost surely feed into a debate in Washington about efforts by President Biden and congressional leaders to enact a more lasting expansion of the safety net that would extend well beyond the pandemic. Democrats’ $3.5 trillion plan, which is still taking shape, could include paid family and medical leave, government-supported child care and a permanent expansion of the Child Tax Credit.
Liberals cited the success of relief programs, which were also highlighted in an Agriculture Department report last week that showed that hunger did not rise in 2020, to argue that such policies ought to be expanded. But conservatives argue that higher federal spending is not needed and would increase the federal debt while discouraging people from working.
difficult to assess changes in health coverage last year. Census estimates conflicted with other government counts, and officials acknowledged problems with data collection during the pandemic.
federal supplement to state unemployment benefits lapsed. She fell behind on bills, setting in motion events that ultimately left her family homeless for two months this year.
New aid programs adopted this year, including the expanded Child Tax Credit, helped Ms. Long, who moved into a new home last month. She said she had noticed improvements in her children, particularly her 5-year-old son.
“It was bad, but it could have been so much worse, and we have come out the other side once again unbroken,” Ms. Long said.
By the government’s official definition, the number of people living in poverty jumped by 3.3 million in 2020, to 37.2 million, among the biggest annual increases on record. But economists have long criticized that definition, which dates to the 1960s, and said it did a particularly poor job of reflecting reality last year.
7.5 million people lost unemployment benefits this month after Congress allowed expansions of the program to lapse.
Jen Dessinger, a photographer who lives in New York City and Los Angeles, said work dried up abruptly at the start of the pandemic. A freelancer, she didn’t qualify for traditional unemployment benefits but eventually received help under a federal program created last year to help people who fell outside the regular system.
Now that program has ended in the middle of another surge in coronavirus cases. Ms. Dessinger said a single positive coronavirus case could shut down a photo shoot. “It’s made it a more desperate situation,” she said.
Democrats on Tuesday said experiences like Ms. Dessinger’s showed both the potential for government aid to protect people from financial ruin, and the need for a more expansive, permanent safety net that can support people in bad and good times.
A White House economist, Jared Bernstein, said on Tuesday that the new poverty data should encourage lawmakers to enact the $3.5 trillion Democratic measure that includes much of Mr. Biden’s economic agenda, which the administration argues will create more and better-paying jobs.
“It’s one thing to temporarily lift people out of poverty — hugely important — but you can’t stop there,” said Mr. Bernstein, a member of Mr. Biden’s Council of Economic Advisers. “We have to make sure that people don’t fall back into poverty after these temporary measures abate.”
“reckless taxing and spending spree.”
Conservative policy experts said that although some expansion of government aid was appropriate during the pandemic, those programs should be wound down, not expanded, as the economy healed.
“Policymakers did a remarkable job last March enacting CARES and other legislation, lending to businesses, providing loan forbearance, expanding the safety net,” Scott Winship, a senior fellow and the director of poverty studies at the American Enterprise Institute, a conservative group, wrote in reaction to the data, referring to an early pandemic aid bill, which included around $2 trillion in spending. “But we should have pivoted to other priorities thereafter.”
Jason DeParle and Margot Sanger-Katz contributed reporting.
DALLAS–(BUSINESS WIRE)–Invitation Homes Inc. (NYSE: INVH)(“Invitation Homes” or the “Company”) , the nation’s premier single-family home leasing company, and PulteGroup, Inc. (NYSE: PHM), the nation’s third largest homebuilder, announced today the formation of an innovative strategic relationship. As part of this relationship, Invitation Homes expects to purchase approximately 7,500 new homes over the next five years that PulteGroup will design and build expressly for this purpose.
The companies have already reached agreement on the construction and sale of over 1,000 homes across seven communities over the next several years, with the first sales expected to close in 2022. Initial projects are scheduled for delivery in Florida, Georgia, Southern California, North Carolina and Texas.
“At Invitation Homes, we’re committed to serving the growing share of Americans who are opting not to buy a house by providing high-quality homes with valued features such as close proximity to jobs and access to good schools,” said Dallas Tanner, President and CEO of Invitation Homes. “We’re thrilled that this strategic relationship with PulteGroup further strengthens that commitment while also enhancing our multichannel acquisition approach to growth.”
“We have been evaluating potential structures for participating in the single-family rental market that would seek to capitalize on our strengths in community development and new-home construction while delivering high returns,” said Ryan Marshall, PulteGroup President and CEO. “We are excited to be working with an industry leader in Invitation Homes, and believe this relationship will allow us to increase our scale in our existing markets, make investing in larger land parcels more practical, and generate attractive risk adjusted returns.”
About Invitation Homes
Invitation Homes is the nation’s premier single-family home leasing company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The company’s mission, “Together with you, we make a house a home,” reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents’ living experiences.
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America’s largest homebuilding companies with operations in more than 40 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes, American West and John Wieland Homes and Neighborhoods, the company is one of the industry’s most versatile homebuilders able to meet the needs of multiple buyer groups and respond to changing consumer demand. PulteGroup’s purpose is building incredible places where people can live their dreams.
For more information about PulteGroup, Inc. and PulteGroup brands, go to pultegroup.com; www.pulte.com; www.centex.com; www.delwebb.com; www.divosta.com; www.jwhomes.com; and www.americanwesthomes.com. Follow PulteGroup, Inc. on Twitter: @PulteGroupNews.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to the Company’s expectations regarding the performance of the Company’s business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company’s business model, macroeconomic factors beyond the Company’s control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association (“HOA”) fees, and insurance costs, the Company’s dependence on third parties for key services, risks related to the evaluation of properties, poor resident selection and defaults and non-renewals by the Company’s residents, performance of the Company’s information technology systems, risks related to the Company’s indebtedness, and risks related to the potential negative impact of the ongoing COVID-19 pandemic on the Company’s financial condition, results of operations, cash flows, business, associates, and residents. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Moreover, many of these factors have been heightened as a result of the ongoing and numerous adverse impacts of COVID-19. The Company believes these factors include, but are not limited to, those described under Part I. Item 1A. “Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s other periodic filings. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.
There were two weeks left in the Trump administration when the Treasury Department handed down a set of rules governing an obscure corner of the tax code.
Overseen by a senior Treasury official whose previous job involved helping the wealthy avoid taxes, the new regulations represented a major victory for private equity firms. They ensured that executives in the $4.5 trillion industry, whose leaders often measure their yearly pay in eight or nine figures, could avoid paying hundreds of millions in taxes.
The rules were approved on Jan. 5, the day before the riot at the U.S. Capitol. Hardly anyone noticed.
The Trump administration’s farewell gift to the buyout industry was part of a pattern that has spanned Republican and Democratic presidencies and Congresses: Private equity has conquered the American tax system.
one recent estimate, the United States loses $75 billion a year from investors in partnerships failing to report their income accurately — at least some of which would probably be recovered if the I.R.S. conducted more audits. That’s enough to roughly double annual federal spending on education.
It is also a dramatic understatement of the true cost. It doesn’t include the ever-changing array of maneuvers — often skating the edge of the law — that private equity firms have devised to help their managers avoid income taxes on the roughly $120 billion the industry pays its executives each year.
Private equity’s ability to vanquish the I.R.S., Treasury and Congress goes a long way toward explaining the deep inequities in the U.S. tax system. When it comes to bankrolling the federal government, the richest of America’s rich — many of them hailing from the private equity industry — play by an entirely different set of rules than everyone else.
The result is that men like Blackstone Group’s chief executive, Stephen A. Schwarzman, who earned more than $610 million last year, can pay federal taxes at rates similar to the average American.
Lawmakers have periodically tried to force private equity to pay more, and the Biden administration has proposed a series of reforms, including enlarging the I.R.S.’s enforcement budget and closing loopholes. The push for reform gained new momentum after ProPublica’s recent revelation that some of America’s richest men paid little or no federal taxes.
nearly $600 million in campaign contributions over the last decade, has repeatedly derailed past efforts to increase its tax burden.
Taylor Swift’s back music catalog.
The industry makes money in two main ways. Firms typically charge their investors a management fee of 2 percent of their assets. And they keep 20 percent of future profits that their investments generate.
That slice of future profits is known as “carried interest.” The term dates at least to the Renaissance. Italian ship captains were compensated in part with an interest in whatever profits were realized on the cargo they carried.
The I.R.S. has long allowed the industry to treat the money it makes from carried interests as capital gains, rather than as ordinary income.
article highlighting the inequity of the tax treatment. It prompted lawmakers from both parties to try to close the so-called carried interest loophole. The on-again, off-again campaign has continued ever since.
Whenever legislation gathers momentum, the private equity industry — joined by real estate, venture capital and other sectors that rely on partnerships — has pumped up campaign contributions and dispatched top executives to Capitol Hill. One bill after another has died, generally without a vote.
An Unexpected Email
One day in 2011, Gregg Polsky, then a professor of tax law at the University of North Carolina, received an out-of-the-blue email. It was from a lawyer for a former private equity executive. The executive had filed a whistle-blower claim with the I.R.S. alleging that their old firm was using illegal tactics to avoid taxes.
The whistle-blower wanted Mr. Polsky’s advice.
Mr. Polsky had previously served as the I.R.S.’s “professor in residence,” and in that role he had developed an expertise in how private equity firms’ vast profits were taxed. Back in academia, he had published a research paper detailing a little-known but pervasive industry tax-dodging technique.
$89 billion in private equity assets — as being “abusive” and a “thinly disguised way of paying the management company its quarterly paycheck.”
Apollo said in a statement that the company stopped using fee waivers in 2012 and is “not aware of any I.R.S. inquiries involving the firm’s use of fee waivers.”
floated the idea of cracking down on carried interest.
Private equity firms mobilized. Blackstone’s lobbying spending increased by nearly a third that year, to $8.5 million. (Matt Anderson, a Blackstone spokesman, said the company’s senior executives “are among the largest individual taxpayers in the country.” He wouldn’t disclose Mr. Schwarzman’s tax rate but said the firm never used fee waivers.)
Lawmakers got cold feet. The initiative fizzled.
In 2015, the Obama administration took a more modest approach. The Treasury Department issued regulations that barred certain types of especially aggressive fee waivers.
But by spelling that out, the new rules codified the legitimacy of fee waivers in general, which until that point many experts had viewed as abusive on their face.
So did his predecessor in the Obama administration, Timothy F. Geithner.
Inside the I.R.S. — which lost about one-third of its agents and officers from 2008 to 2018 — many viewed private equity’s webs of interlocking partnerships as designed to befuddle auditors and dodge taxes.
One I.R.S. agent complained that “income is pushed down so many tiers, you are never able to find out where the real problems or duplication of deductions exist,” according to a U.S. Government Accountability Office investigation of partnerships in 2014. Another agent said the purpose of large partnerships seemed to be making “it difficult to identify income sources and tax shelters.”
The Times reviewed 10 years of annual reports filed by the five largest publicly traded private equity firms. They contained no trace of the firms ever having to pay the I.R.S. extra money, and they referred to only minor audits that they said were unlikely to affect their finances.
Current and former I.R.S. officials said in interviews that such audits generally involved issues like firms’ accounting for travel costs, rather than major reckonings over their taxable profits. The officials said they were unaware of any recent significant audits of private equity firms.
No Money Owed
For a while, it looked as if there would be an exception to this general rule: the I.R.S.’s reviews of the fee waivers spurred by the whistle-blower claims. But it soon became clear that the effort lacked teeth.
Kat Gregor, a tax lawyer at the law firm Ropes & Gray, said the I.R.S. had challenged fee waivers used by four of her clients, whom she wouldn’t identify. The auditors struck her as untrained in the thicket of tax laws governing partnerships.
“It’s the equivalent of picking someone who was used to conducting an interview in English and tell them to go do it in Spanish,” Ms. Gregor said.
The audits of her clients wrapped up in late 2019. None owed any money.
The Mnuchin Compromise
As a presidential candidate, Mr. Trump vowed to “eliminate the carried interest deduction, well-known deduction, and other special-interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.”
wanted to close the loophole, congressional Republicans resisted. Instead, they embraced a much milder measure: requiring private equity officials to hold their investments for at least three years before reaping preferential tax treatment on their carried interests. Steven Mnuchin, the Treasury secretary, who had previously run an investment partnership, signed off.
McKinsey, typically holds investments for more than five years. The measure, part of a $1.5 trillion package of tax cuts, was projected to generate $1 billion in revenue over a decade.
credited Mr. Mnuchin, hailing him as “an all-star.”
Mr. Fleischer, who a decade earlier had raised alarms about carried interest, said the measure “was structured by industry to appear to do something while affecting as few as possible.”
Months later, Mr. Callas joined the law and lobbying firm Steptoe & Johnson. The private equity giant Carlyle is one of his biggest clients.
‘The Government Caved’
It took the Treasury Department more than two years to propose rules spelling out the fine print of the 2017 law. The Treasury’s suggested language was strict. One proposal would have empowered I.R.S. auditors to more closely examine internal transactions that private equity firms might use to get around the law’s three-year holding period.
The industry, so happy with the tepid 2017 law, was up in arms over the tough rules the Treasury’s staff was now proposing. In a letter in October 2020, the American Investment Council, led by Drew Maloney, a former aide to Mr. Mnuchin, noted how private equity had invested in hundreds of companies during the coronavirus pandemic and said the Treasury’s overzealous approach would harm the industry.
The rules were the responsibility of Treasury’s top tax official, David Kautter. He previously was the national tax director at EY, formerly Ernst & Young, when the firm was marketing illegal tax shelters that led to a federal criminal investigation and a $123 million settlement. (Mr. Kautter has denied being involved with selling the shelters but has expressed regret about not speaking up about them.)
On his watch at Treasury, the rules under development began getting softer, including when it came to the three-year holding period.
Monte Jackel, a former I.R.S. attorney who worked on the original version of the proposed regulations.
Mr. Mnuchin, back in the private sector, is starting an investment fund that could benefit from his department’s weaker rules.
A Charmed March
Even during the pandemic, the charmed march of private equity continued.
The top five publicly traded firms reported net profits last year of $8.6 billion. They paid their executives $8.3 billion. In addition to Mr. Schwarzman’s $610 million, the co-founders of KKR each made about $90 million, and Apollo’s Leon Black received $211 million, according to Equilar, an executive compensation consulting firm.
now advising clients on techniques to circumvent the three-year holding period.
The most popular is known as a “carry waiver.” It enables private equity managers to hold their carried interests for less than three years without paying higher tax rates. The technique is complicated, but it involves temporarily moving money into other investment vehicles. That provides the industry with greater flexibility to buy and sell things whenever it wants, without triggering a higher tax rate.
Private equity firms don’t broadcast this. But there are clues. In a recent presentation to a Pennsylvania retirement system by Hellman & Friedman, the California private equity giant included a string of disclaimers in small font. The last one flagged the firm’s use of carry waivers.
The Biden administration is negotiating its tax overhaul agenda with Republicans, who have aired advertisements attacking the proposal to increase the I.R.S.’s budget. The White House is already backing down from some of its most ambitious proposals.
Even if the agency’s budget were significantly expanded, veterans of the I.R.S. doubt it would make much difference when it comes to scrutinizing complex partnerships.
“If the I.R.S. started staffing up now, it would take them at least a decade to catch up,” Mr. Jackel said. “They don’t have enough I.R.S. agents with enough knowledge to know what they are looking at. They areso grossly overmatched it’s not funny.”
Republican lawmakers in nearly a dozen states have tried to shape how racism and slavery can be taught in schools, with some bills explicitly targeting the 1619 Project. This month, Tennessee passed a law to withhold funding from schools that teach critical race theory, following a similar law in Idaho. Similar legislative proposals are underway in Texas, New Hampshire and Louisiana.
Today in Business
Tuesday’s letter added that the same “anti-democratic thinking” behind the failure to offer Ms. Hannah-Jones tenure was evident in efforts by the state lawmakers to ban the 1619 Project from schools.
“We, the undersigned, believe this country stands at a crucial moment that will define the democratic expression and exchange of ideas for our own and future generations,” the letter said.
The University of North Carolina’s trustees are overseen by the university system’s board of governors, which is appointed by the Republican-controlled legislature. Ms. Hannah-Jones, who earned a master’s degree from the University of North Carolina in 2003, is scheduled to start in July, while continuing to write for The Times Magazine.
A university spokeswoman said university leaders would respond privately to the letter of support. Ms. Hannah-Jones declined to comment.
“That so many distinguished historians have signed this letter is yet further testament to the impact she has had in sparking an important conversation about American history,” Jake Silverstein, the editor in chief of The Times Magazine, said in a statement. He added that Ms. Hannah-Jones’s work was “in the best tradition of New York Times reporters who have deepened our understanding of the world with rigorous journalism that challenges the status quo and forces readers to think critically.”
Previous Knight Chairs at the University of North Carolina were tenured.
“It is not our place to tell U.N.C. or U.N.C./Hussman who they should appoint or give tenure to,” Alberto Ibargüen, the president of Knight Foundation, which funds the positions, said in a statement last week. “It is, however, clear to us that Hannah-Jones is eminently qualified for the appointment, and we would urge the trustees of the University of North Carolina to reconsider their decision within the time frame of our agreement.”
In an email on Sunday to faculty members that was reviewed by The Times, Susan King, the dean of the Hussman School, suggested that the board could reconsider the tenure recommendation at a future meeting. “So that this won’t linger on,” she wrote, “we’ve asked for a date certain by which a decision about a board vote will be made.”
Nikole Hannah-Jones, a Pulitzer Prize-winning writer for The New York Times Magazine, was denied a tenured position at the University of North Carolina, after the university’s board of trustees took the highly unusual step of failing to approve the journalism department’s recommendation.
The decision drew criticism from faculty members on Wednesday, who said that the last two people in the position Ms. Hannah-Jones will hold were granted tenure upon their appointment.
In late April, the university announced that Ms. Hannah-Jones was being appointed to the Knight Chair in Race and Investigative Journalism at U.N.C.’s Hussman School of Journalism and Media. She will start as a professor in July, while continuing to write for The Times Magazine. Instead of tenure, Ms. Hannah-Jones was offered a five-year contract as a professor, with an option for review.
In the April announcement, the dean of the journalism school, Susan King, said: “Now one of the most respected investigative journalists in America will be working with our students on projects that will move their careers forward and ignite critically important conversations.”
MacArthur fellowship in 2017, brought a backlash from conservative groups concerned about her involvement in The Times Magazine’s 1619 Project, which was named for the year that slavery began in the colonies that would become the United States. (Ms. Hannah-Jones won the 2020 Pulitzer Prize for commentary for her introductory essay.)
The 1619 Project ignited acontinuing debate about the legacy of slavery, but has faced criticism from some historians over certain claims, and from conservatives who have labeled it “propaganda.” The Republican-controlled North Carolina Legislature appoints the university system’s Board of Governors, which has significant control over the university’s board of trustees.
The website NC Policy Watch reported on Wednesday that U.N.C.’s board of trustees had declined to approve Ms. Hannah-Jones’s application for tenure. A spokeswoman for the university, Joanne Peters Denny, said in a statement that “details of individual faculty hiring processes are personnel protected information.”
Today in Business
Ms. Hannah-Jones declined to comment. On Twitter on Wednesday evening, she wrote, “I’ve been staying off of here today, but just know I see you all and I am grateful.”
Nearly 40 faculty members from the journalism school signed an online statement on Wednesday calling for the decision to be reversed, saying the failure to grant tenure to Ms. Hannah-Jones “unfairly moves the goal posts and violates longstanding norms and established processes.” The statement added, “This failure is especially disheartening because it occurred despite the support for Hannah-Jones’s appointment as a full professor with tenure by the Hussman dean, Hussman faculty and university.”
It continued, “Hannah-Jones’s distinguished record of more than 20 years in journalism surpasses expectations for a tenured position as the Knight Chair in Race and Investigative Journalism.”
Alberto Ibargüen, the president of Knight Foundation, said that while the foundation funds the Knight Chair position at U.N.C., it has no role in appointments. The agreement calls for a five-year appointment, with tenure review within that period, he said.
“It is not our place to tell U.N.C. or U.N.C./Hussman who they should appoint or give tenure to,” Mr. Ibargüen said in a statement. “It is, however, clear to us that Hannah-Jones is eminently qualified for the appointment and we would urge the trustees of the University of North Carolina to reconsider their decision within the time frame of our agreement.”
Ms. Hannah-Jones’s editors voiced their support on Wednesday. “Nikole is a remarkable investigative journalist whose work has helped change the national conversation about race,” said Dean Baquet, executive editor of The New York Times.
Jake Silverstein, editor of The Times Magazine, strongly defended her and her work.
“Nikole’s journalism, whether she’s writing about school segregation or American history, has always been bold, unflinching and dedicated to telling uncomfortable truths that some people just don’t want to hear,” Mr. Silverstein said. “It doesn’t always make her popular, but it’s part of why hers is a necessary voice.”
In a separate ransomware attack on the Washington, D.C., Metropolitan Police Department, hackers said the price the police offered to pay was “too small” and dumped 250 gigabytes of the department’s data online this week, including databases that track gang members.
In his remarks on Thursday, Mr. Biden seized on the Colonial Pipeline hack as further proof that the United States needed to improve its critical infrastructure, and he urged lawmakers to back his $2.3 trillion proposal to rebuild roads, bridges, pipelines and other projects.
Republicans have balked at the size of Mr. Biden’s proposals, accusing the president of wanting to raise taxes to pay for things that they do not consider infrastructure, like programs for home health aides. Mr. Biden has proposed to increase taxes on wealthy people and corporations to pay for his spending, but has said he is open to other ideas.
“I’m willing to negotiate, as I indicated yesterday to the House members and to the leadership,” Mr. Biden said. “But it’s clearer than ever that doing nothing is not an option.”
Gasoline prices rose by roughly 3 cents in South Carolina and Georgia from Wednesday to Thursday, about half the amount of the increases of the previous few days. But prices in Tennessee, which depends on an offshoot of the pipeline, rose by 6 cents, to $2.87 for a gallon of regular. Nationwide, the average price for a gallon of regular increased by 2 cents, to $3.03, according to the AAA auto club.
Gasoline supplies vary from state to state along the pipeline, in part because some places have more storage than others. In New Jersey, only 1 percent of gasoline stations lacked fuel early Thursday morning, while more than half of the stations in Virginia, North Carolina and South Carolina were out of fuel, according to GasBuddy, an app that monitors fuel supplies. Friday is traditionally the biggest day for gasoline sales.
It is likely to take at least through the weekend for supply at all gasoline stations to return to normal functioning because it takes time for fuel to pass through the pipeline.
Gasoline prices continued to rise across the Southeast on Thursday, but at a slower pace generally than in recent days, as the operator of Colonial Pipeline said it had made “substantial progress” in resuming the delivery of fuel along the East Coast.
“Product delivery has commenced to all markets we serve,” the pipeline’s operator said Thursday afternoon. “It will take several days for the product delivery supply chain to return to normal. Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions.”
The pipeline, which stretches from Texas to New Jersey and delivers nearly half of the transport fuels for the Atlantic Coast, was shut down because of a ransomware cyberattack on Friday. Operations have gathered momentum since the pipeline partially restarted late Wednesday.
Gasoline prices rose by roughly 3 cents in South Carolina and Georgia from Wednesday to Thursday, about half the amount of the increases of the previous few days. But prices in Tennessee, which depends on an offshoot of the pipeline, rose by 6 cents, to $2.87 for a gallon of regular. Nationwide, the average price for a gallon of regular increased by 2 cents to $3.03, according to the AAA auto club.
Gasoline supplies vary from state to state along the pipeline, in part because some places have more storage than others. In New Jersey, only 1 percent of gasoline stations lacked fuel early Thursday morning, while more than half of the stations in Virginia, North Carolina and South Carolina were out of fuel, according to GasBuddy, an app that monitors fuel supplies.
It is likely to take at least through the weekend for supply at all gasoline stations to return to normal functioning, because it takes time for fuel to pass through the pipeline.
President Biden, speaking on national television, urged motorists not to panic.
“They should be reaching full operational capacity as we speak, as I speak to you right now,” Mr. Biden said at the White House. “That is good news. But we want to be clear, we will not feel the effects at the pump immediately. This is not like flicking on a light switch.”
An internal assessment by the Departments of Energy and Homeland Security noted that the fuel “travels through the pipeline at 5 miles per hour” and would take “approximately two weeks to travel from the Gulf Coast to New York.” Supplemental supplies transported in tanker trucks and tanker vessels connecting the Gulf and Atlantic coasts also can take up to a week or more.
The Biden administration has temporarily eased the Jones Act, which prohibits foreign vessels from delivering goods from one domestic port to another. The administration said Thursday that a waiver had been granted to one company and that it would consider other waiver requests.
“This waiver will enable the transport of additional gas and jet fuel to ease supply constraints,” Jen Psaki, the White House press secretary, said in a statement. The Jones Act, which is over a century old and is designed to protect American shipping, is usually waived to compensate for supply interruptions during hurricanes.
Panic buying contributed to the fuel shortages. At some stations, people were filling up gasoline cans, forcing others to wait longer and causing shouting matches.
Friday is traditionally the biggest day for gasoline sales. But energy analysts were optimistic that the crisis would soon pass.
“The restart of the pipeline is very positive news for motorists,” said Jeanette McGee, the director for external communications for AAA. “While impact won’t be seen immediately and motorists in affected areas can expect to see a few more days of limited fuel supply, relief is coming.”
She said station pumps will be full in “several days,” ahead of the Memorial Day weekend, a heavy driving time.
The Federal Bureau of Investigation has identified an organized crime group called DarkSide as the attacker. The group is believed to operate from Eastern Europe, possibly Russia. While the attack was not on the pipeline itself, Colonial shut down both its information systems and the pipeline until it was sure it could safely manage the flow of fuel.
David E. Sanger and Michael D. Shear contributed reporting.
A group of 18 scientists stated Thursday in a letter published in the journal Science that there is not enough evidence to decide whether a natural origin or an accidental laboratory leak caused the Covid-19 pandemic.
They argued, as the U.S. government and other countries have, for a new investigation to explore where the virus came from.
The organizers of the letter, Jesse Bloom, who studies the evolution of viruses at the Fred Hutchinson Cancer Research Center in Seattle, and David Relman, a microbiologist at Stanford University, said they strove to articulate a wait-and-see viewpoint that they believe is shared by many scientists. Many of the signers have not spoken out before.
“Most of the discussion you hear about SARS-CoV-2 origins at this point is coming from, I think, the relatively small number of people who feel very certain about their views,” Dr. Bloom said.
issued a report claiming that such a leak was extremely unlikely, even though the mission never investigated any Chinese labs. The team did visit the Wuhan lab, but did not investigate it. A lab investigation was never part of their mandate. The report, produced in a mission with Chinese scientists, drew extensive criticism from the U.S. government and others that the Chinese government had not cooperated fully and had limited the international scientists’ access to information.
The new letter argued for a new and more rigorous investigation of virus origins that would involve a broader range of experts and safeguard against conflicts of interest.
Recent letters by another group of scientists and international affairs experts argued at length for the relative likelihood of a laboratory leak. Previous statements from other scientists and the W.H.O. report both asserted that a natural origin was by far the most plausible.
Michael Worobey, an evolutionary biologist at the University of Arizona, said he signed the new letter because “the recent W.H.O. report on the origins of the virus, and its discussion, spurred several of us to get in touch with each other and talk about our shared desire for dispassionate investigation of the origins of the virus.”
“I certainly respect the opinion of others who may disagree with what we’ve said in the letter, but I felt I had no choice but to put my concerns out there,” he said.
Another signer, Sarah E. Cobey, an epidemiologist and evolutionary biologist at the University of Chicago, said, “I think it is more likely than not that SARS-CoV-2 emerged from an animal reservoir rather than a lab.”
But “lab accidents do happen and can have disastrous consequences,” she added. “I am concerned about the short- and long-term consequences of failing to evaluate the possibility of laboratory escape in a rigorous way. It would be a troublesome precedent.”
The list of signers includes researchers with deep knowledge of the SARS family of viruses, such as Ralph Baric at the University of North Carolina, who had collaborated with the Chinese virologist Shi Zhengli in research done at the university on the original SARS virus. Dr. Baric did not respond to attempts to reach him by email and telephone.
often cited paper in March 2020 that dismissed the likelihood of a laboratory origin based largely on the genome of the SARS-CoV-2 virus that causes Covid-19. “We do not believe any type of laboratory-based scenario is plausible,” that paper stated.
Speaking for himself only, Dr. Relman said in an interview that “the piece that Kristian Anderson and four others wrote last March in my view simply fails to provide evidence to support their conclusions.”
Dr. Andersen, who reviewed the letter in Science, said that both explanations were theoretically possible. But, “the letter suggests a false equivalence between the lab escape and natural origin scenarios,” he said. “To this day, no credible evidence has been presented to support the lab leak hypothesis, which remains grounded in speculation.”
Instead, he said, available data “are consistent with a natural emergence of a novel virus from a zoonotic reservoir, as has been observed so many times in the past.” He said he supported further inquiry into the origin of the virus.
Angela Rasmussen, a virologist at University of Saskatchewan’s Vaccine and Infectious Disease Organization, has criticized the politicization of the laboratory leak theory.
She supports further investigation, but said that “there is more evidence (both genomic and historical precedent) that this was the result of zoonotic emergence rather than a laboratory accident.”
HOUSTON — Panicked drivers scrambled to fuel their vehicles across the Southeast on Tuesday, leaving thousands of stations without gasoline as a vital fuel pipeline remained largely shut down after a ransomware attack.
The disruption to the Colonial Pipeline, which stretches 5,500 miles from Texas to New Jersey, also left airlines vulnerable, with several saying they would send jet fuel to the region by air to ensure that service would not be disrupted.
Gasoline in Georgia and a few other states rose 3 to 10 cents a gallon on Tuesday, a jump typically seen only when hurricanes interrupt refinery and pipeline operations along the Gulf Coast.
The national average for a gallon of regular gasoline rose 2 cents on Tuesday, with higher prices reported in the Southeast, according to the AAA motor club. The average increase was nearly 7 cents in South Carolina, 6 cents in North Carolina and 3 cents in Virginia.
Gas Buddy, a service that tracks gas prices, reported.
“There’s no gas, and people are getting frustrated,” said Ariyana Ward, a 19-year-old college student in Virginia Beach who waited 45 minutes to fill up. With some motorists taking time to fill cans as well as cars, she said, “people are getting into shouting matches.”
State leaders responded with measures intended to keep the flow of fuel steady and stabilize prices.
suspend some fuel transport rules. Governor DeSantis also activated the National Guard to cope with the emergency.
South Carolina’s attorney general, Alan Wilson, announced that he was ready to invoke the state’s price-gouging law, making excessive overcharging a criminal offense. “I’m urging everyone to be careful and be patient,” Mr. Wilson said.
At the White House, Energy Secretary Jennifer M. Granholm told reporters, “We know we have gasoline; we just need to get it to the right places.” But she made no promises about when the pipeline, which was shut down to prevent the cyberattack from spreading, would resume operations, saying the company will decide on Wednesday whether it is ready to do so.
She said she expected gas station operators to act “responsibly,” adding, “We have no tolerance for price gouging.”
The administration considered other steps that might alleviate shortages, including moving gasoline, diesel and jet fuel by train, or issuing a waiver for a 1920 law known as the Jones Act, which requires that maritime shipments be on vessels owned and staffed by Americans. But it was unclear if the right kind of either rail cars or foreign-registered ships were available.
“There are no easy solutions,’’ Ms. Granholm said.
The Environmental Protection Agency administrator, Michael Regan, issued an emergency waiver for fuel air emissions on Tuesday to help alleviate fuel shortages in places affected by the pipeline shutdown, including the District of Columbia, Maryland, Pennsylvania and Virginia. The waiver will continue through next Tuesday.
Colonial Pipeline, the company that operates the pipeline, has said it hopes to restore most operations by the end of the week. The attack, which the Federal Bureau of Investigation said had been carried out by an organized-crime group called DarkSide, has highlighted the vulnerability of the American energy system. The pipeline provides the Eastern United States with nearly half its transportation fuel.
Colonial has remained largely silent, answering no questions about the kind of protections it had in place on both its computer networks and the industrial controls that run the pipeline.
In a statement late in the day on Tuesday, Colonial said it had manually started one part of the pipeline and delivered about 41 million gallons of fuel to various locations on its system, from Atlanta, through the Carolinas and to Linden, N.J.
But the company said nothing about what factors will play into its decision on when to restart the pipeline. And it has not explained whether it found any evidence that the malware placed in its data systems could migrate to the operations of the pipeline.
Several experts noted that while the two networks are described as separate entities, they have considerable crossover. For example, one of the systems the ransomware group tied up tracks how much fuel each customer uses. Without that running, Colonial would not know how much fuel any of its customers were receiving — or how to get paid for it.
Industry analysts said the impact of the hacking would remain relatively minor as long as the artery was fully restored soon. “With a resolution to the shutdown in sight, the cyberattack is now treated as a small disturbance by the market, and prices are trimming Monday’s panic-gains,” said Louise Dickson, an oil markets analyst for Rystad Energy.
a 2018 report, the group argued that the interstate pipeline system used to supply jet fuel to airports had grown increasingly vulnerable to costly disruptions. And when disruptions occur, airlines have few good options beyond flying in extra fuel, adding stops to flights, or canceling and rerouting flights.
After the disruption last weekend, American Airlines said it had added stops to two daily flights out of Charlotte, N.C. One, to Honolulu, will stop in Dallas, where customers will change planes. The other, to London, will stop in Boston to refuel. The flights are expected to return to their original schedules on Saturday.
Southwest Airlines said it was flying in supplemental fuel to Nashville, and United Airlines said it was flying extra fuel to Baltimore; Nashville; Savannah, Ga.; and Greenville-Spartanburg International Airport in South Carolina. United, Southwest and Delta Air Lines said they had not experienced any disruptions to their operations so far.
When the Centers for Disease Control and Prevention released new guidelines last month for mask wearing, it announced that “less than 10 percent” of Covid-19 transmission was occurring outdoors. Media organizations repeated the statistic, and it quickly became a standard description of the frequency of outdoor transmission.
But the number is almost certainly misleading.
It appears to be based partly on a misclassification of some Covid transmission that actually took place in enclosed spaces (as I explain below). An even bigger issue is the extreme caution of C.D.C. officials, who picked a benchmark — 10 percent — so high that nobody could reasonably dispute it.
That benchmark “seems to be a huge exaggeration,” as Dr. Muge Cevik, a virologist at the University of St. Andrews, said. In truth, the share of transmission that has occurred outdoors seems to be below 1 percent and may be below 0.1 percent, multiple epidemiologists told me. The rare outdoor transmission that has happened almost all seems to have involved crowded places or close conversation.
Saying that less than 10 percent of Covid transmission occurs outdoors is akin to saying that sharks attack fewer than 20,000 swimmers a year. (The actual worldwide number is around 150.) It’s both true and deceiving.
struggling to communicate effectively, and leaving many people confused about what’s truly risky. C.D.C. officials have placed such a high priority on caution that many Americans are bewildered by the agency’s long list of recommendations. Zeynep Tufekci of the University of North Carolina, writing in The Atlantic, called those recommendations “simultaneously too timid and too complicated.”
They continue to treat outdoor transmission as a major risk. The C.D.C. says that unvaccinated people should wear masks in most outdoor settings and vaccinated people should wear them at “large public venues”; summer camps should require children to wear masks virtually “at all times.”
These recommendations would be more grounded in science if anywhere close to 10 percent of Covid transmission were occurring outdoors. But it is not. There is not a single documented Covid infection anywhere in the world from casual outdoor interactions, such as walking past someone on a street or eating at a nearby table.
Today’s newsletter will be a bit longer than usual, so I can explain how the C.D.C. ended up promoting a misleading number.
The Singapore mystery
If you read the academic research that the C.D.C. has cited in defense of the 10 percent benchmark, you will notice something strange. A very large share of supposed cases of outdoor transmission have occurred in a single setting: construction sites in Singapore.
one study, 95 of 10,926 worldwide instances of transmission are classified as outdoors; all 95 are from Singapore construction sites. In another study, four of 103 instances are classified as outdoors; again, all four are from Singapore construction sites.
This obviously doesn’t make much sense. It instead appears to be a misunderstanding that resembles the childhood game of telephone, in which a message gets garbled as it passes from one person to the next.
The Singapore data originally comes from a government database there. That database does not categorize the construction-site cases as outdoor transmission, Yap Wei Qiang, a spokesman for the Ministry of Health, told my colleague Shashank Bengali. “We didn’t classify it according to outdoors or indoors,” Yap said. “It could have been workplace transmission where it happens outdoors at the site, or it could also have happened indoors within the construction site.”
As Shashank did further reporting, he discovered reasons to think that many of the infections may have occurred indoors. At some of the individual construction sites where Covid spread — like a complex for the financial firm UBS and a skyscraper project called Project Glory — the concrete shells for the buildings were largely completed before the pandemic began. (This video of Project Glory was shot more than four months before Singapore’s first reported Covid case.)
Because Singapore is hot year-round, the workers would have sought out the shade of enclosed spaces to hold meetings and eat lunch together, Alex Au of Transient Workers Count Too, an advocacy group, told Shashank. Electricians and plumbers would have worked in particularly close contact.
one of the papers analyzing Singapore, told me, “and ultimately decided on a conservative outdoor definition.” Another paper, published in the Journal of Infection and Public Health, counted only two settings as indoors: “mass accommodation and residential facilities.” It defined all of these settings as outdoors: “workplace, health care, education, social events, travel, catering, leisure and shopping.”
I understand why the researchers preferred a broad definition. They wanted to avoid missing instances of outdoor transmission and mistakenly suggesting that the outdoors was safer than it really was. But the approach had a big downside. It meant that the researchers counted many instances of indoors transmission as outdoors.
And yet even with this approach, they found a minuscule share of total transmission to have occurred outdoors. In the paper with 95 supposedly outdoor cases from Singapore, those cases nonetheless made up less than 1 percent of the total. A study from Ireland, which seems to have been more precise about the definition of outdoors, put the share of such transmission at 0.1 percent. A study of 7,324 cases from China found a single instance of outdoor transmission, involving a conversation between two people.
“I’m sure it’s possible for transmission to occur outdoors in the right circumstances,” Dr. Aaron Richterman of the University of Pennsylvania told me, “but if we had to put a number on it, I would say much less than 1 percent.”
ditching their masks, even indoors, while others continue to harass people who walk around outdoors without a mask.
All the while, the scientific evidence points to a conclusion that is much simpler than the C.D.C.’s message: Masks make a huge difference indoors and rarely matter outdoors.
masks remain rare.
It certainly doesn’t seem to be causing problems. Since January, daily Covid deaths in Britain have declined more than 99 percent.
THE LATEST NEWS
Violence in Jerusalem
cramped train ride to Manhattan.
Almonds, oats, rice: Are plant milks good for you?
A Times classic: Here are the climate risks facing your country.
Lives Lived: Critics called the postmodern buildings of the architect Helmut Jahn “dazzling,” “convention-busting” and “unrelated to anything else in the whole of Western civilization.” He died at 81.