The decision by President Joe Biden to sharply increase the tariff on Canadian softwood lumber to 17.99 percent is threatening housing affordability and has prompted calls from The Wall Street Journal and homebuilders for the White House to take quick action to reverse course.
More than one-quarter of softwood lumber—such as pine, cedar, fir, and spruce—used in America comes from Canada. The new tariff is twice the 8.99 percent rate in effect when Biden took office in January. It comes on the heels of wholesale lumber prices which tripled from July 2020 to July 2021, adding nearly $30,000 to the average cost of a new home, according to the National Association of Home Builders (NAHB).
The NAHB says the increased tariff is adding on average another $9,000 to the price of a new home compared to July. It is also pushing up prices of renovation and remodeling projects that are critical for ensuring affordable housing options in many communities.
“The doubling of duties on Canadian softwood lumber is ill-timed and ill-advised,” NAHB Chairman John C. Fowke wrote to Biden on Dec. 3. “As has been the case for decades, the domestic lumber industry cannot, nor will not, produce enough lumber to meet U.S. consumer demand. We rely on lumber from Canada to fill the production gap, so punitive tariffs on our closest and best trading partner on a product that American consumers desperately need defies logic.”
Top NAHB officials met at the Canadian Embassy in Washington DC last week to discuss the tariffs. After the meeting, Fowke send his letter to Biden, calling on U.S. trade officials to negotiate with the Canadian government for a lumber trade agreement that eliminates tariffs and ensures a fairly priced supply of lumber.
“The tariffs harm housing affordability by acting as a tax on American home builders and home buyers, and contribute to huge price volatility in the lumber market by putting upward pressure on lumber prices,” Fowke wrote.
The association, which has 140,000 members across the country, also called on Biden to support efforts to increase domestic lumber production. “Improving the health of our nation’s forests and increasing the supply of domestic timber are not mutually exclusive goals,” Fowke wrote.
Last month the Wall Street Journal’s editorial board noted that prices for U.S.-produced lumber is at more than 75 percent above pre-pandemic levels.
“For decades U.S. sawmills haven’t been able to meet domestic demand, but they’ve leaned on government to protect their market share,” the WSJ’s opinion stated. “The shortage would be much worse if not for Canadian lumber, which backs up U.S. output.”
The tariffs, the WSJ wrote, “will raise building costs in an already strained housing market.”
Then last week, The Washington Post’s editorial board published an opinion succinctly titled “Biden is hiking lumber tariffs at the wrong time.”
And the editorial board for the Las Vegas Review-Journal wrote that driving up the cost of lumber via tariffs will discourage construction and worsen inventory shortages for southern Nevada. “Much like the weather, politicians love to talk about affordable housing but none of them want to do anything about it. Put the Biden administration firmly in that camp,” the Review-Journal noted.
Data from the Census Bureau and the Centers for Disease Control (CDC) indicated that nearly 1.2 million Arizona workers would lose their jobs under President Joe Biden’s vaccine mandate. Senator Rand Paul’s (R-KY) office conducted the research, published through the U.S. Senate Committee on Small Businesses & Entrepreneurship days before Thanksgiving.
The 1.2 million workers account for 33 percent of Arizona’s workforce. Compliance would further cost Arizona businesses at least $70 million total. The main types of workers impacted come from America’s backbone: wholesale trade, retail, and manufacturing. These three categories of workers were largely classified as “essential workers” throughout 2020 and this year. Arizona ranked 12th for the number of workers it may lose, after California (nearly 4.8 million), Texas (over 4.5 million), Florida (over 2.9 million), New York (over 2 million), Ohio (nearly 1.9 million), Georgia (over 1.8 million), Illinois (nearly 1.7 million), Pennsylvania (under 1.7 million), North Carolina (under 1.6 million) Michigan (under 1.5 million), and Tennessee (over 1.2 million).
According to the research, nearly 45 million workers nationwide are at risk of losing their jobs: about 22 percent of the nation’s entire workforce, ringing in at a compliance cost of at least $1.29 billion.
Biden’s vaccine mandate relied on the Department of Labor’s Occupational Safety and Health Administration (OSHA) to require companies with 100 or more employees to have employees fully vaccinated or following standard COVID-19 safety protocols: masking and weekly testing. The mandate would require companies to provide paid time off for workers who get vaccinated, but it wouldn’t require costs of acquiring tests – though individual states or local laws might.
Based on recent court rulings, it’s unclear when the vaccine mandate would be implemented. A federal appeals court halted Biden’s vaccine mandate last month. Another federal court also halted a similar Biden mandate requiring Medicare and Medicaid health care workers to get vaccinated, in a case launched by a coalition involving Attorney General Mark Brnovich. Following that ruling, OSHA decided to suspend enforcement of the mandate.
The vaccine mandate also may face a challenge in the legislature. The Senate will vote on a resolution to effectively bar Biden’s vaccine mandate. Through the Congressional Review Act (CRA), the House and Senate may overturn a federal regulation without presidential approval. However, such a resolution would likely not advance in the Democrat-controlled House.
Last month, one of Biden’s chief economic advisors, Jared Bernstein, toldCNBC that adverse financial impacts due to the mandate would be overshadowed by the economic growth afforded by vaccinations. When asked if the Biden Administration expected companies to sacrifice their revenue growth, Bernstein said that he couldn’t speak for individual companies and that many would face “a very different outlook.”
“Those forecasts are for 4.5 and 6 percent. The connection between a strong economy and vaccinations and the trajectory of the caseload is extremely clear to me – and, in fact, quite elastic, it happens very quickly. And, of course, that is the motivation behind the vaccination program,” said Bernstein. “I’ve looked at almost every important variable I could find. Yet that does certainly make the case that vaccines, economic progress, strong growth, revenue growth, income growth, wage growth, jobs, GDP, industrial production – every variable I look at seems highly and positively elastic to these wiggles in the caseload.”
Bernstein serves on the Council of Economic Advisors (CEA) alongside Chairwoman Cecilia Elena Rouse and fellow member Heather Boushey. Rouse served under Presidents Bill Clinton and Barack Obama on the National Economic Council (NEC) and CEA, respectively. Boushey would have served as the chief economic advisor for failed presidential candidate Hillary Clinton’s transition team.
According to the CDC, a vast majority of the elderly are either partially or fully vaccinated. 88.8 percent of individuals aged 50 to 64, 99.9 percent of individuals aged 65 to 74, and 97.7 percent of individuals over 75. About 10 percent of those from each age range are awaiting their second dosage.
As if small business owners haven’t had enough to deal with, now comes word that Congress pulled the rug out from under a major COVID-19 relief program that was supposed to run through the end of 2021.
Instead, many business owners are left scrambling to adjust their business plan with just three weeks left in the year.
The Employee Retention Tax Credit (ERTC) program was approved by Congress in 2020 to allow many small business owners to offset much of the cost of payroll taxes for those employees who were retained despite the pandemic. The program was to run through Jan. 1, 2022, allowing employers to claim credits of up to $7,000 per employee per quarter for all four quarters this year.
But that abruptly changed when President Joe Biden recently signed the Infrastructure Investment and Jobs Act.
According to the White House-supported legislation, the ERTC program came to a halt as of Sept. 30. That retroactive end means business owners who developed their budget based on claiming the credits Congress previously approved for the fourth-quarter will have a rude awakening at tax time.
Restaurants, retail, and professional services businesses are among the industries expected to be hardest hit by ERTC’s early termination, which was not previously publicized by the Biden Administration. It has fallen on business and trade associations to get the word out after the fact, but it is feared the message will be too late for many small businesses.
The National Federal of Independent Businesses is encouraging impacted business owners to notify their U.S. Representatives and Senators in hopes Congress will address the problem by restoring the original end date.
In October, the National Retail Federation projected nearly $860 billion in 2021 holiday sales, bolstered by customers planning to spend more than 2020. Online retailers and the brick-and-mortar type retailers were also told to expect one-half of shoppers to begin their holiday purchases even before Thanksgiving.
Many economists also forecasted that holiday shoppers will be purchasing fewer items but would be willing to spend money for better quality and more substantive items, if supply chain problems don’t get in the way. All of which means a lot of eyes were focused on the results from the key Thanksgiving holiday shopping days including Black Friday, Small Business Saturday, and Cyber Monday.
Sensormatic Solutions provides services to retailers in the areas of inventory intelligence, shopper experience, loss prevention, and operational effectiveness. According to Sensormatic, shopper activity on Nov. 26 through Nov. 28 increased more than 34 percent compared to 2020. During the same three days, however, traffic at brick-and-mortar stores was 21 percent lower than in 2019.
It is unknown whether the decision by most major retailers to remain closed all of Thanksgiving Day had any impact on buyer decisions. But one retail executive says December 2021 still provides unique opportunities and challenges for retailers.
“Shoppers are returning to stores, but there are still lingering health and safety concerns making some cautious of traditionally crowded shopping days,” said Brian Field, senior director of global retail consulting for Sensormatic. “With a data-driven understanding of customer concerns, retailers can implement processes to help make shoppers feel comfortable in stores – via occupancy monitoring, temperature checks, extended hours and a seamless contactless shopping experience.”
Sensormatic also looked at Cyber Monday data. One change over 2020 is that many retailers with physical stores made their online sales pricing and special offers available to in-store shoppers. But those Cyber Monday offers did not help generate additional foot traffic, which ended up being similar to a typical fall day.
“Though the mix of weekday shopping had been on the rise throughout the pandemic as shoppers take advantage of more flexible work schedules and try to avoid weekend crowds, Cyber Monday typically has no impact on in-store traffic and the same was true of this year,” Field said.
Yet according to Field, the overall data shows retailers should breathe a sigh of relief with the direction holiday sales are taking.
“Over the past month, in-store traffic has progressively improved as consumers have started their holiday shopping early,” Field said. “Retailers are seeing positive change year over year, and the Black Friday weekend data shows an upward trajectory toward pre-pandemic levels.”
According to cybersecurity experts, anyone with a computer connected to the internet is at risk of a ransomware attack which involves a malware designed to encrypt files on a victim’s device, rendering the files and ultimately the systems which rely on them unusable.
The criminal or criminals who placed the malware via an email attachment or a download which appeared to be safe then exhorts the victim by demanding ransom in exchange for a decryption key or file to “recover” the system.
Most people think of homeland security in terms of enhancing border security and preventing terroristic attacks in Arizona. But cybersecurity is a critical element in protecting Arizona’s infrastructure as well as economic security, according to Ryan Murray, deputy director of Arizona Department of Homeland Security (AZDOHS).
And at the same time that major companies and large government entities are strengthening their IT protocols, cyber criminals are focusing on smaller businesses, local non-profits, and public bodies such as school districts and fire departments, all of which generally don’t have a dedicated IT specialist, or a good understanding of the threat posed by a ransomware attack.
Such targets are easy pickings, Murray told AZ Free News. Adding to the problem is that many cyber attackers are no longer interested in simply holding a company’s IT system hostage until a ransom it paid. They are now incorporating data theft to the attack, Murray said.
Which is what happened in May when a ransomware attack hit Desert Wells Family Medicine in Queen Creek and led to the shutdown of the company’s IT system and left thousands of patients’ health records corrupted after the files were stolen.
In the end, Desert Wells had to manually “rebuild” its 35,000 patient records through other venues such as pharmacies, hospitals, and laboratories because none of its records were recoverable prior to May 21, the date of the hack.
With the scourge of ransomware attacks hard to stop -80 to 90 percent of cyberattacks originate overseas, says Murray- it is imperative for all companies, non-profits, and government entities large and small to understand how to reduce their vulnerabilities. And know what to do when an attack hits.
Which is why Murray’s team is developing a soon-to-be-launched website that provide a wealth of information on protecting against, responding to, and surviving a ransomware attack. The agency will also provide guidance on how to conduct an assessment of the vulnerabilities and strengths of a company’s website, email system, and workstations.
There will also be a speakers’ bureau to provide outreach across the state, says Murray.
And if a ransomware attack or data breach is suspected, local law enforcement officers can contact cyber security specialists as AZDOHS’s new Cyber Command Center which teams with various local, state, and federal agencies. In fact, many police department and sheriff’s offices in Arizona have a designated Threat Liaison Officer, or TLO, who has undergone training in how to respond to a reported cybercrime.
For now, information about what a ransomware attack involves, how to identify an attack, and what to do if victimized by such an attack can be found at www.stopransomware.gov
The combination of ransom demand and data theft which hit Desert Wells Family Medicine was reported to patients as well as the U.S. Department of Health and Human Services three months after it started. A wide range of information was accessed in the attack, including social security numbers, birthdates, names and addresses, and billing account numbers.
Patient medical account numbers as well as diagnostic and treatment information were also hacked, the notice said. The medical clinic had its patient information backed up, but the hacker also corrupted that data.
Private businesses are not required to report whether any money was paid directly or indirectly in response to a ransomware attack. How the unknown hacker or hackers got into the medical center’s system -and its backup data- has not been publicly disclosed.
In the past, companies could turn to their insurers for “cyber coverage” to reimburse the costs associated with ransomware attacks. Some insurers even paid the ransoms in order to recover a client’s system, finding it the cheaper option.
But with the number of such attacks increasing in frequency and cost, it is becoming more expensive for businesses and governments to afford such coverage, if they can even get it. For those lucky enough to have cyber coverage, they will likely see premiums doubled in 2022 with policy limits significantly scaled back.
Senator Mark Kelly (D-AZ) claimed that the Biden Administration’s spending plan, the Build Back Better Act that could cost over $4 trillion, wouldn’t raise taxes for the lower and middle classes and would be paid for in full during an interview with Fox10 on Thursday. As written, the spending plan would cost around $2.15 trillion – but if the provisions are made permanent, that would incur an additional cost well over $2 trillion according to the Committee for a Responsible Federal Budget.
“And by the way: this is not going to raise taxes on middle and working class Arizonans,” asserted Kelly. “For folks that make under 400,000 a year – families, their taxes will not go up. And by the way, this is going to be paid for by the wealthiest corporations.”
The sentiment that the spending would be paid for in full didn’t align with the Congressional Budget Office (CBO) assessment released last month. The CBO estimated that the spending would result in a net increase in the country’s deficit by $367 billion over the next ten years. Unadjusted, the spending would add to the country’s deficit by $750 billion over the next five years and $160 billion over the next ten years.
Kelly added that Congress was still working over details of the Build Back Better Act – so the CBO report could be considered a working estimate.
The CBO also included a cost breakdown for each policy within the Build Back Better Act; they estimated:
$585 billion for family benefits related to affordable child care, paid family and medical leave, and universal pre-K
$570 billion for climate and infrastructure related to “clean” energy and climate resilience, electric tax credits, “clean” fuel, vehicle tax credits, other climate-related tax benefits, and infrastructure and related tax breaks
$340 billion for health care related to expanded Medicaid, Affordable Care Act tax credits, and health care workforce investments
$325 billion collectively for affordable housing, higher education, workforce, and “other spending and investments”
$280 billion for reducing or delaying the broadening of the 2017 Tax Cuts and Jobs Act (TCJA)
$215 billion for tax credits and cuts related to children, earned income, and “other tax changes”
$110 billion for immigration reform
The House passed their version of the Build Back Better Act days before Thanksgiving. The Senate must decide on whether it will accept the bill as is, or modify it. The latter is most likely, considering the sentiments of two senators.
Unlike Kelly, Senator Kyrsten Sinema (D-AZ) has held out her support for the spending plan. Sinema isn’t alone – Senator Joe Manchin (D-WV) also doesn’t support the bill’s price tag. Despite pressure from their party, both senators have insisted that they want the bill reduced drastically in its cost.