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federal government

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By Michael E. Russell

Michael E. Russell

Sometimes it makes my head hurt trying to understand how Washington works. The Federal Reserve raises interest rates in order to curb inflation.  Immediately following these actions, Senate Democrats passes the Inflation Reduction Act with the blessing of the White House.

This bill goes counter to what Jerome Powell and the Federal Reserve are trying to accomplish. Jim Kramer on CNBC calls this bill the “Spend Our Way To Oblivion Act or SOWOA.”

If you own stocks, this could be a problem.  For many U.S. companies the bill includes a tax on stock buybacks. This will impact the way companies address their capital. A 15% book tax which hurts companies with net operating losses will force them to issue debt in order to raise capital.

Senator Chuck Schumer proudly states that this bill will allow Medicare to negotiate prices with drug companies. Really? This is not quite correct. Beginning 4 years from now, Medicare will only be negotiating on lowering prices on 10 drugs. Schumer also states that the bill will create higher paying Environmental Engineering jobs. This potentially will lead to hyper wage inflation.  Just look at last Friday’s employment figures. 

Environmental groups are euphoric over the bill, providing the potential for an additional 500,000 high paying jobs. That’s awesome, but where are the applicants to fill these positions? This is the type of wage inflation that the Federal Reserve is trying to rein in.

It appears that commodity inflation has peaked, but now we will have to contend with labor inflation by creating jobs we have no ability to fill, other than to take from the private sector. I don’t want to beat a dead horse, but every time Fed Chairman Jerome Powell tries to get a handle on inflation, the Federal government throws him a curveball.

The people of this country for the most part are hard-working and good-hearted.  The stock market has politics, of course. We all want to slow global warming or better yet, STOP IT. However, what is occurring in Washington has the potential to destroy our free enterprise system. The government is printing money and spending it like sailors on shore leave. A final thought on this, TERM LIMITS.

On a positive note: We have had a nice bounce during the month of July. The jobs number this past Friday appears to show that we may not be on the verge of a recession, but it sure puts pressure on the Fed to increase rates. 

Stock news. GE is splitting into 3 different companies. Those individual stocks could perform very well.  Think back to the split up of AT&T into 7 different entities. I am still a big fan of ExxonMobil, even though it is already up 50% this year. JPMorgan has come down from $165 in January to $114. The potential for a higher price is very possible, while being paid with a nice dividend. Last, but not least, Proctor and Gamble. Most of us use their products on a daily basis, like toothpaste and laundry detergent, don’t we?

Until next month, try to stay cool.

Michael E. Russell retired after 40 years working for various Wall Street firms. All recommendations being made here are not guaranteed and may incur a loss of principal. The opinions and investment recommendations expressed in the column are the author’s own. TBR News Media does not endorse any specific investment advice and urges investors to consult with their financial advisor. 

Photo by David Ackerman

By Leah S. Dunaief

Leah Dunaief

Since we were thinking of all we are grateful for this Thanksgiving, I can now add one more item to the list. It seems that government officials have finally noticed how important newspapers and media, especially local news media, are, and they want to help us survive. In fact, attitudes on the part of media members toward government have also changed in the last couple of years, thanks strangely to the coronavirus pandemic.

The grim numbers tell the story. According to an article in this past Monday’s issue of The New York Times, there are now 200 counties in the United States without a newspaper. These are being referred to as newspaper deserts. More than 2100 have shut down since 2004. This is in part due to the rise in digital media that has broken the business model of advertising support for local newspapers, with the final blow delivered by COVID-19. According to the Pew Research Center, the number of journalists at newspapers fell to 31,000 last year from 71,000 in 2008.

At the same time, in order to stay afloat, many newspapers have accepted help from the federal government’s Paycheck Protection Program with forgivable loans, assuaging fears of publishers of an inherent conflict of interest in accepting federal help. After all, newspapers are considered the watchdogs of the powerful, including government, on behalf of the people. We have been leery of any quid pro quo by accepting government help until now. But there have been no restrictions or demands put on news gatherers in this program, proving that such support can work if properly administered, and those loans have doubtlessly saved the number of shuttered newspapers from being greater.

“I don’t think we’d be having this conversation [about government support for local media] if it were not for the impact of Covid and the role that it played in accelerating challenges the [news] sector has faced,” said Damian Radcliff, a professor at the University of Oregon School of Journalism and Communications in The Times.

A tax credit for local newspapers was one of the main items in the Local Journalism Sustainability Act, a bipartisan bill that appeared before Congress in 2020 and was reintroduced this year. Among its supporters was local U.S. Rep. Lee Zeldin (R-NY1). When it stalled, it was then put into the latest $2.2 trillion package, as a payroll tax credit, the giant bill having passed the House and now awaits its fate at the hands of the Senate.

Why should the government help newspapers?

For starters, there is early precedent in United States history. The Postal Act of 1792 gave newspapers significantly cheaper mail rates. The maxim about an informed public being the cornerstone of democracy still holds. A free press is enshrined in the First Amendment, and the way to help pay for it was, and still is, by reduced postage. To this day, newspapers that are so designated because they carry a significant percentage of news, as opposed to only advertising, move at the rate of first class mail. 

As for local news that most directly affects everyday life, who but the local news outlets would routinely cover local school board, town board and civics meetings? It is in the local news where births, deaths. graduations and weddings are noted. Local student sports teams, student musicians and academic accomplishments are proudly published, as are local cultural events, exhibitions and fairs. In addition to holding local officials accountable, local newspapers define the boundaries of a community and strengthen its bonds.

Other ways that government can help news outlets include placing advertising from their various agencies. Such a program helped newspapers in New York City this past year for a total of some $10 million, at the behest of Mayor de Blasio. Although counties already advertise legal notices in newspapers, those are not usually equitably placed but rather are saved for the partisan papers by the party in control. A legislator in New Jersey suggested giving residents a $250 deduction on their taxes if they subscribed to a local news outlet.

I can tell you that were we to receive any sort of financial help from the government, it would go directly toward publishing more local news for you.

New York State Sen. Jim Gaughran announces a donation drive for furloughed government employees Jan. 10. Photo from Gaughran's office

As the federal government shutdown drags into the fourth week, Huntington area boaters and elected officials have come together to help provide relief to furloughed federal employees and their families.

The Greater Huntington Council of Yacht and Boating Clubs, which represents more than 20 boat and watercraft organizations, announced Jan. 10 a gift card donation drive to help the U.S. Coast Guard personnel who safeguard the waters of the Long Island Sound.

“Year-round the brave and dedicated men and women of the U.S. Coast Guard stand ready to
respond to any emergency,” said Jackie Martin, executive officer of the boat council. “They continue to report to work even though they are not getting paid. They still have bills to pay and many have families to feed.”

Donations of food, personal hygiene items, household supplies, pet foods and gift cards for federal employees can be dropped off at:

• Gaughran’s District Office
   99-111South St., Suite 250
  Oyster Bay, NY

• Stop & Shop
   60 Wall St.
   Huntington, NY

• Long Island Cares
   220 Broadway
   Huntington Station, NY

• Long Island Cares
  10 Davids Drive
  Hauppauge, NY

Donations of gift cards for U.S. Coast Guard personnel can be sent to:

  The Greater Huntington Council of Yacht and Boating Clubs
    P.O. Box 2124
    Halesite, NY 11743

All checks must be made payable to “Chief Petty Officer Association” with Shut Down Fund CT-NY in the memo line.

Martin said the idea for a gift card drive came from her husband who previously served in the U.S. Navy. She said he knew the Coast Guard personnel operating out of Eatons Neck and Hartford, Connecticut, are considered part of the Department of Homeland Security during peacetime and, as a result, have not
received a paycheck since the shutdown began Dec. 22.

“He remembered how tough it was to live from paycheck to paycheck,” she said. “When you have a young family and are trying to live paycheck to paycheck it’s difficult.”

Coast Guard staff has cut back on all nonessential services but must be available to respond to emergency  situations. Some of its members travelfrom as far away as Jersey City to do four-day shifts at the base.

“There are people out there boating even in this weather,” Martin said. “There’s commercial fisherman and clammers out on our waterways.”

In addition to gift cards, the boating council will accept monetary donations to purchase gift cards to
be distributed among the Coast Guard by their respective commanders based on need.

Huntington’s boaters are not the only ones to have launched a donation drive in efforts to help out federal
employees in need. New York State Sen. Jim Gaughran (D-Northport) made one of his first acts of
office Jan. 10 to announce a food and supplies drive alongside state Assemblyman Charles Lavine
(D-Glen Cove) at Sagamore Hill National Historic Site, which has been shuttered by the government shutdown.

“Our federal workers don’t have the luxury of sacrificing their paychecks for an undetermined amount of time,” Gaughran said. “Federal workers on Long Island are now expected to choose between feeding their families or paying their mortgage.”

Gaughran and Lavine are working to set up a network of supermarket, business and offices to serve as
collection sites for donations to go to federal employees. Items being collected include food, personal care items, common household supplies, pet food and gift cards. He stressed that due to state laws the elected
officials and their offices cannot accept cash donations on behalf of federal workers.

The state senator said he started the initiative after speaking with Paule Pachter, chief executive officer of Hauppauge-based Long Island Cares food bank, who stressed that winter is often the most difficult season with the agency already helping approximately 450 families. Resources are quickly becoming stretched thin.

LI Cares will help collect and distribute food, personal hygiene items and other donations collected
to federal employees already directed to the agency through its channels, according to Gaughran.

“I hope this is a short food drive that it won’t be necessary for a long period of time,” he said.  “I hope the government in Washington, D.C., does its job and reopens soon.”

U.S. Rep. Lee Zeldin tours Elsie Owens Health Center in Coram before a press conference in which he called on Congress to reauthorize CHIP. Photo from Zeldin's office

By Alex Petroski

Political gridlock is nothing new in Washington, but if an agreement on a federal funding bill isn’t reached by Jan. 19, this time children’s health will be at risk.

In September, the Children’s Health Insurance Program expired, and Congress passed a short-term funding bill just before Christmas to keep the federal government funded through this Friday. The program, also known as CHIP, is a service that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. Originally enacted in 1997, CHIP provides matching funds to states for health insurance to families with children. It was slated to run for 10 years, but has since been reauthorized on several occasions since 2007. In 2016, almost 9 million children were enrolled in the program, according to Medicaid.gov. The program covers routine check-ups; immunizations; doctor visits; prescriptions; dental and vision care; and emergency services for enrollees. In November, the House passed a five-year reauthorization bill to keep the program running, but it never reached the Senate floor.

U.S. Rep. Lee Zeldin (R-Shirley) urged lawmakers to pass a bill reauthorizing funding for the program, which also provides funding for community health centers, during a press conference Jan. 12 at Elsie Owens Health Center in Coram. A long-term bill will need to be passed to keep services like CHIP running for the remainder of 2018.

“These essential programs provide millions of children, veterans and individuals with the healthcare services they need,” Zeldin said. “In New York alone, CHIP provides health insurance for 300,000 New York children, while nearly 2 million New Yorkers rely on Community Health Centers for their health care services. On behalf of the millions of New Yorkers who rely on CHIP and Community Health Centers, we must reach across the aisle and work together to preserve these vital programs.”

Although more political debates will likely ensue on other issues pursuant to funding the government through the end of the year, Zeldin said he doesn’t expect reauthorization of CHIP to be used for bargaining by either political party.

“I do not expect to see a partial shutdown after next Friday, so everyone anticipates the funding to continue, but this also presents an opportunity to add the reauthorization language into the next funding bill,” Zeldin said in an interview after the event. “It’s two parts that have been running on different tracks. However, I believe that there is an opportunity here to add the reauthorization language to get it through the House, through the Senate, signed by the President — and reauthorization done.”

New York’s U.S. Sens. Chuck Schumer (D) and Kirsten Gillibrand (D) have each stressed the importance of renewing CHIP as part of larger federal funding discussions.

“We have two weeks to negotiate a budget deal that must also address a host of other items, #ExtendCHIP, community health centers, disaster aid, and of course, the #Dreamers,” Schumer said in a Jan. 3 tweet.

HRH Care Community Health President and Chief Executive Officer Anne Kauffman Nolon, Elsie Owens Health Center Medical Director Nadia Arif and Brookhaven Memorial Hospital Medical Center President and CEO Richard Margulis were among the healthcare professionals in attendance who applauded Zeldin’s calls for funding.

“Not extending the funding for these vital programs could have a devastating effect on both our population, and BMHMC, which also faces potential cuts as a Disproportionate Share Hospital,” Margulis said.

According to the Congressional Budget Office, five-year reauthorization of CHIP would cost $800 million over a 10-year period.