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  • New Year’s pay boost: These states are raising their minimum wage | CNN Business

    New Year’s pay boost: These states are raising their minimum wage | CNN Business

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    Minneapolis
    CNN
     — 

    The current period of high inflation that has significantly impacted the US economy will also influence a New Year’s tradition: The annual state minimum wage increases.

    By January 1, hourly minimum wages in 23 states will rise as part of previously scheduled efforts to reach $15 an hour or to account for cost-of-living changes. The increases account for more than $5 billion in pay boosts for an estimated 8.4 million workers, the Economic Policy Institute estimates.

    Additionally, nearly 30 cities and counties across the US will increase their minimum wage, according to the EPI, a left-leaning think tank.

    The larger-than-typical increases for a dozen states come after inflation hit a 40-year high this summer, leaving families struggling to keep up with the rising costs.

    “The fact that there’s high inflation really just underscores how necessary these minimum wage increases are for workers,” said Sebastian Martinez Hickey, a research assistant at the EPI. “Even before the pandemic, there was no county in the United States where you could affordably live as a single adult at $15 an hour.”

    The pandemic and the subsequent period of economic recovery has further revealed the growing chasm in America’s wealth gap. During the past two years, working conditions and low pay contributed to a swelling of labor movement activity and actions by many large corporations to raise their wage floor.

    The pandemic also led to a structural upheaval in the nation’s labor market, creating an imbalance of worker supply and demand that still persists. Employers have found themselves short of workers for most of the year, which has pushed up average annual hourly wages in the battle to recruit and retain staff. While some workers in competitive industries such as retail and dining have found their new salary outpaces inflation, most pay has been outpaced by rising prices.

    “The story is different because wages have been increasing at the low-end, much faster than inflation and much faster than in middle- or high-wage jobs,” said Michael Reich, economics professor at the University of California at Berkeley. “And that means that many workers, even in the $7.25 states, are already getting paid above the minimum wage.”

    In other words, he said, the minimum wage “has become less and less binding.”

    “Even though minimum wages might go up by 7%, in many states and cities, labor costs aren’t going to go up anywhere as much as they have in the past, because they already have gone up,” he said. “That also means that prices aren’t going to go up at [places like] restaurants.”

    The federal minimum wage of $7.25 per hour hasn’t budged since 2009, and 20 states have a minimum wage either equal to or below the federal level, making $7.25 their default baseline. The value of the federal minimum wage peaked in 1968 when it was $1.60, which would be worth about $13.46 in 2022, based on the Bureau of Labor Statistics’ inflation calculator.

    • Delaware: $10.50 to $11.75
    • Illinois: $12 to $13
    • Maryland: $12.50 to $13.25
    • Massachusetts: $14.25 to $15
    • Michigan: $9.87 to $10.10
    • Missouri: $11.15 to $12
    • Nebraska: $9 to $10.50
    • New Jersey: $13 to $14.13* (scheduled increase also includes inflation adjustment)
    • New Mexico: $11.50 to $12
    • New York: $13.20 to $14.20 (Upstate New York); $15 (in and around NYC)
    • Rhode Island: $12.25 to $13
    • Virginia: $11 to $12
    • Alaska: $10.34 to $10.85
    • Arizona: $12.80 to $13.85
    • California: $14.50 (firms with 25 or fewer employees) /$15 (firms with 26+ employees) to $15.50
    • Colorado: $12.56 to $13.65
    • Maine: $12.75 to $13.80
    • Minnesota: $8.42 to $8.63 (small employer); $10.33 to $10.59 (large employer)
    • Montana: $9.20 to $9.95
    • Ohio: $9.30 to $10.10
    • South Dakota: $9.95 to $10.80
    • Vermont: $12.55 to $13.18
    • Washington: $14.49 to $15.74
    • Connecticut (effective July 1): $14 to $15
    • Florida (September 2023): $11 to $12
    • Nevada (effective July 1): $9.50 to $10.25 (firms that offer benefits); $10.50 to $11.25 (no benefits offered)
    • Oregon: $13.50 (effective July 1, indexed annual increase to be based on the CPI)

    Sources: State websites, National Conference of State Legislatures, Economic Policy Institute

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  • ‘We’re trapped’: Britons in homes with unsafe cladding see no way out as living costs soar | CNN

    ‘We’re trapped’: Britons in homes with unsafe cladding see no way out as living costs soar | CNN

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    London
    CNN
     — 

    In May 2017, Sophie Bichener did what many in their twenties are unable to do: buy a home. She paid around £230,000 (around $295,000 at the time) for her two-bedroom apartment in a high-rise building in a town north of London, where a train could get her to work in the capital in less than half an hour. She had her foot on the first rung of Britain’s housing ladder, an increasingly difficult feat, and it felt like the only way was up.

    A month later, Bichener woke up to news that would change her life. A fire had broken out at a similar block to hers: the 24-story Grenfell Tower in west London, which was encased in flammable cladding. The material meant to keep out the wind and rain went up like a matchstick. The fire killed 72 people and left an entire community homeless and heartbroken. The ordeal sent Bichener into a panic. Was her building also at risk, she wondered?

    The burned remains of Grenfell stood uncovered for months, looming over one of London’s richest boroughs. It became a monument that to many symbolized the disastrous effects of austerity – the decade-long policy of cost-cutting embarked on by the Conservatives in response to the financial crisis of 2008. The tragedy was made all the more stark by its surroundings: the public housing block is just a five-minute walk from Kensington properties worth tens of millions of pounds. Look one way: scarcely imaginable wealth. The other: a hulking symbol of a broken and divided Britain.

    In the wake of the fire, there was a wave of promises from politicians that things would change – that building safety would be improved, social housing reformed, and that responsibility would be taken for the government agenda of public spending cuts, deregulation and privatization that acted as kindling for the tragedy that unfolded.

    But in the five years since, Britons living in tower blocks with unsafe cladding have found themselves stuck in a perpetual state of limbo. CNN spoke with 10 people, who all say they are paralyzed by fear that their buildings could catch fire at any moment, and crippled by costs thrust upon them to fix safety defects that were not their fault – despite the government promising they would not have to “pay a penny.”

    Now, their problems are compounded by a fresh disaster: a spiraling cost-of-living crisis. As energy prices and inflation soar, residents like Bichener are facing an impossible situation, burdened not only by sky-high bills but also the eye-watering expense of remediating properties that now feel more like prisons than homes.

    Residents told CNN they were living in a perpetual state of anxiety, inundated by text alerts informing them of mounting bills and waiting on tenterhooks for the next buzz of their phone. Some said their building insurance had quadrupled since they moved in, while others were burdened by ballooning service charges – hundreds of pounds a month for safety fixes that hadn’t been started.

    Many said they had left their mortgages on variable rates in the hopes they could eventually sell their apartments, but after the Bank of England hiked interest rates this fall their repayments had become untenable, with monthly payments almost doubling in some cases. Paired with the rising costs of living – more expensive energy, fuel and food – the residents CNN spoke with said they are finding themselves several thousand pounds a year poorer.

    When Bichener bought her flat in Vista Tower in Stevenage, a 16-story office block built in 1965 and converted into residential housing in 2016, there was “no mention” of fire hazards, she said. “When Grenfell happened we spoke to our local council just to double-check all the buildings in the town. We asked the management agent and freeholder [the owner of the apartment building and land] if they have any concerns. At that point, everyone was saying no, all these buildings are good,” Bichener told CNN.

    Vista Tower, right, in Stevenage. Britons living in unsafe buildings remain haunted by the memory of Grenfell.

    But there were soon signs of trouble. The developer that built the block put itself into liquidation – the first “red flag,” Bichener said. Emails to the freeholder went unanswered – the second. Then confirmation: In 2019, two years after Grenfell, the management agent reported that the building was unsafe. An inspection had found an array of hazards not previously listed.

    After the revelations, a group of former Grenfell residents came to visit Vista Tower to raise awareness about the nationwide cladding crisis. Bichener said that one man who had lost a family member in the Grenfell fire told her he was struck by the similarities: “He said he went cold.”

    In November 2020, she was hit with a life-changing bill from the freeholder. “The whole project, all of the remediation, came to about £15 million.” Split between the leaseholders, it worked out to be about £208,000 per flat.

    That bill – almost the same price she initially paid for the flat – has hung over Bichener’s head since. The government has offered little help and the political chaos in Britain has made matters worse. There have been seven housing secretaries in the five years since Grenfell, as the governing Conservative Party remains embroiled in internal strife. Some have begun to make progress – including threatening legal action to get the company that owns Vista Tower to pay up rather than passing the cost on to the residents – only to find themselves out of the job weeks later.

    “I can’t afford to live in this building anymore. I don’t want to pay the service charge, I don’t want to pay all of the horrific leaseholder costs. I just don’t want it. But I can’t get out.”

    Sophie Bichener

    Meanwhile, Bichener is still waiting for her life to get back on track. She is unable to sell, because banks are unwilling to lend against the property, and, in recent months, her mortgage, insurance and service charge have all shot up. The crippling costs meant she delayed getting married and has put off having children.

    “I can’t afford to live in this building anymore. I don’t want to pay the service charge, I don’t want to pay all of the horrific leaseholder costs. I just don’t want it. But I can’t get out,” Bichener, now 30 years old, said. “I’m trapped.”

    And she’s not alone. Hundreds of thousands of people are believed to be in the same boat, but the UK government has failed to commission a full audit, which means the scale of the impact is unclear. Peter Apps, deputy editor at Inside Housing, who has covered the story meticulously over the past five years, estimates there are likely more than 600,000 people in affected tall buildings and millions more in medium-rise towers – those between five and 10 stories. CNN has been unable to verify the precise number.

    The problems playing out now are the result of decades of poor policy choices, according to Apps. His new book detailing the Grenfell tragedy and subsequent inquiry, “Show Me the Bodies,” claims the UK “let Grenfell happen” through a combination of “deregulation, corporate greed and institutional indifference.”

    Evidence presented to the Grenfell Tower Inquiry found that the local council, which managed the building, had made a £300,000 ($389,400) saving by switching higher quality zinc cladding to a cheaper aluminum composite material (ACM). This meant for an additional £2,300 ($3,000) per flat, the fire might have been prevented.

    Any regulations demanding developers use better quality materials were seen as being “anti-business,” Apps told CNN. Developers did not even have to use qualified fire safety inspectors to carry out checks on their buildings – just individuals the developers themselves deemed to be “competent.”

    Five years on, the Grenfell victims' families are still waiting for answers -- and thousands are waiting for their buildings to be made safe.

    So extensive was the deregulation that the problems were not confined just to high-rise tower blocks – or even to cladding. Instead, many low-rise buildings suffer from problems ranging from poor fire cavities to flammable insulation.

    “The cladding wasn’t the issue at all,” said Jennifer Frame, a 44-year-old travel industry analyst, who lived in Richmond House in south-west London. “It was the fact that it was a timber frame building, with a cavity between that and the cladding,” she added, a safety defect that was confirmed by an inspection report.

    One night in September 2019, a fire broke out in a flat in Richmond House. Rather than being contained in one room, the cavity acted “like a chimney,” Frame said. An independent report commissioned by the building owner, Metropolitan Thames Valley Housing Association, and included in written evidence submitted to the UK parliament by residents, revealed that the cavity barriers were either “defective” or “entirely missing” at Richmond House, allowing the fire to spread “almost unhindered” through the 23-flat block.

    “The use of materials such as ACM within cladding systems has rightly attracted a lot of attention since Grenfell. It is now clear that there is a much wider failure by construction companies,” the residents said in their submission.

    Cladding is meant to keep buildings dry and warm, but lax regulations have resulted in flammable materials being used in many cases.

    Sixty residents lost their homes that night. Three years later, Frame is still living in temporary accommodation in the same borough of London, while paying the mortgage for her property which no longer exists. Perversely, she said she feels lucky that it’s only the mortgage – and not the monumental cost of remediations – that she’s on the hook for.

    “I do consider myself – for lack of a better word – one of the lucky ones, as we don’t have the threat of bankruptcy hanging over our head any more,” she said.

    CNN reached out for comment to the developer of Richmond House, Berkeley Group, but did not receive a reply. Berkeley Group has previously denied liability.

    Years of delay and disputes over who should cover the cost, combined with the sheer stress of living in unsafe buildings, have weighed heavily on residents.

    Bichener moved back to her parents’ house in 2020. “I just couldn’t face being there,” she said. “I ended up on anti-anxiety and anti-depression medication just from being in those four walls in a pandemic, in a dangerous home, with a life-changing sum of money that would potentially bankrupt me over my head.”

    At a rally for the End Our Cladding Scandal campaign, she recalled being with a group of people her age and how they all broke down in tears. “They’re the only people who understand the situation you’re in. Everyone’s having huge crises over this.”

    Their options are limited. Most can’t sell their properties, since banks won’t offer mortgages against them. Even if banks were to reverse this policy, it is unclear whether there would be a demand for them, given the spiraling costs of borrowing. According to the residents CNN spoke with, a scant few have been able to sell to cash buyers – but often at a 60-80% loss.

    Some have become “resentful landlords,” a term used by residents who are unable to sell their properties, but are so desperate to move out that they rent it out cheaply to others. Lilli Houghton, 30, rents out her flat in Leeds, a city in the north of England, at a loss to a new tenant. She still pays the service charge for her flat, while also renting a new place elsewhere.

    Most have no choice but to wait – but five years has felt like an eternity. When Zoe Bartley, a 29-year-old lawyer, bought her one-bedroom apartment in Chelmsford, a city in Essex, she thought she’d sell it within a few years to move into a family home.

    But she hasn’t been able to sell. She found a buyer in January 2020 – but their mortgage was declined after an inspection of the building found a number of fire safety defects.

    Bartley’s 15-month-old son still sleeps in her bedroom. When her two stepchildren come to stay, “they have to sleep in the living room,” she said. “When they were four and five and I’d just started dating their dad,” they were excited to have sleepovers in the living room. Now they’re nine and 10, “it’s just pathetic,” Bartley said.

    Bartley said she struggles to sleep knowing that a fire could break out at night. Others who spoke to CNN say they have trained their children on what to do when the alarms go off.

    Earlier this year, residents in unsafe buildings began to see some fledgling signs of progress. In a letter to developers, the then-housing secretary, Michael Gove, said it was “neither fair nor decent that innocent leaseholders … should be landed with bills they cannot afford to fix problems they did not cause.” He set out a plan to work with the industry to find a solution.

    First, he gave developers two months “to agree to a plan of action to fund remediation costs,” estimated at £4 billion (around $5.4 billion). That deadline passed with no agreement reached.

    To force developers’ hands, the Building Safety Act was passed into law in April, which requires the fire safety defects in all buildings above 11 meters to be fixed and created a fund to help cover the costs. The act implemented a “waterfall” system: Developers would be expected to pay first, but, if they are unable to, then the cost would fall to the building owners. If they are also unable to pay, only then would the cost fall to the leaseholders. Leaseholders’ costs were capped at £10,000 ($11,400), or £15,000 ($17,000) in London, for those who met certain criteria. The government asked 53 companies to sign this pledge; many did.

    For many residents, this came as a relief. They had faced life-changing bills for years, but the cap meant they wouldn’t be totally wiped out. It seemed the worst of their worries were over.

    But there was a problem: The pledge made by developers wasn’t legally binding. Even though the government has made money available for remediation, no mechanism has yet forced any developers to make use of it.

    Bichener still doesn't know when remediation work on Vista Tower will begin, how long it will take, or who will pay for it.

    One resident explained to CNN: “Prior to Michael Gove, your building owner could give you a bill to replace the cladding. They’re now not able to do that anymore, but that doesn’t mean your building gets fixed.”

    The government tried again. In July it published contracts to turn the “pledge into legally binding undertakings.” If developers signed the contract, this would commit them to remediating their buildings. Still, there was nothing obliging the developers to sign these contracts – and so none did.

    In October, Vista Tower – where Bichener lives – came under scrutiny. Then-Housing Secretary Simon Clarke set a 21-day deadline for Grey GR, the owner of the building, to commit to fixing it. “The lives of over 100 people living in Vista Tower have been put on hold,” Clarke said. “Enough is enough.” Bichener stressed her building was just one among thousands in need of remediation, but welcomed this as a “step in the right direction.”

    But when that deadline came, Clarke was already out of the job. He had been appointed by former UK Prime Minister Liz Truss, but after her six-week premiership came to an end, Clarke was replaced in the subsequent reshuffle. The deadline passed without Grey GR making any commitment.

    Gove was reappointed by new Prime Minister Rishi Sunak as Clarke’s successor in October. In response to questions from CNN, the UK’s Department for Levelling Up, Housing and Communities (DLUHC) confirmed that the government has started formal proceedings against Grey GR.

    “We are finalizing the legally binding contracts that developers will sign to fix their unsafe buildings, and expect them to do so very soon,” a DLUHC spokesperson said in a statement.

    “I think the ‘who’s paying’ question will drag on for many years. That might be through court cases and tribunals. But I don’t see how it will be resolved.”

    Sophie Bichener

    Grey GR told CNN that it was “absolutely committed to carrying out the remediation works required,” but that they had not started yet due to obstacles in receiving government funds.

    “Issues with gaining access to [the Building Safety Fund], created by Government, have been, and remain, the fundamental roadblock to progress,” Grey GR said in a statement, adding that the security of residents was of the “utmost priority” and that it was taking steps to make buildings safer.

    But, according to Bichener, residents are no safer than they were five years ago. All that has changed is that, legally, they will no longer have to pay tens or hundreds of thousands of pounds to fix their buildings.

    That hasn’t stopped building owners from seeking funds from residents though. “The amount of £208,430.04 is outstanding in connection with [your] property,” read a letter sent to a resident of Vista Tower by the building owner in November. “We would appreciate your remittance within the next seven days.”

    In the meantime, life for the residents of these buildings goes on. Since speaking to CNN, Bichener got married. She and her husband are both paying off their own mortgages until she is able to sell her flat. For years they had been “stressed,” she said, asking “do we tie ourselves together and have these two properties?” But they decided they couldn’t put their lives on pause forever because of her Vista Tower nightmare.

    “I want to have left,” Bichener said of where she wants to be, a year from now. “The dream is that I no longer own that property and I am long gone and I never have to see it or visit it again.

    “But if I’m realistic, I think we’ll be in the same situation. I think the ‘who’s paying’ question will drag on for many years. That might be through court cases and tribunals. But I don’t see how it will be resolved.”

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  • The year that brought Silicon Valley back down to earth | CNN Business

    The year that brought Silicon Valley back down to earth | CNN Business

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    CNN
     — 

    On the first trading day of 2022, Apple hit a new milestone for the tech industry: the iPhone maker became the first publicly traded company to hit a $3 trillion market cap, with Microsoft and Google not far behind. As eye-popping as that valuation was, there were headlines speculating about how long it would be before Apple and its rivals topped $5 trillion.

    The tech industry, already dominant, only seemed destined to grow even bigger at the start of this year. The spread of the Omicron variant suggested a continued pandemic-fueled demand for digital goods and services, which had buoyed many tech companies. Near 0% interest rates meant startups still had easy access to the funding that had fueled their high valuations and risky ventures.

    But the year is ending on a much different note. A perfect storm of factors have forced a dizzying reality check for the once high-flying tech sector, making it one of the biggest losers of 2022.

    Over the course of the year, pandemic-era demand for many tech tools shifted; inflation soared; interest rates rose and fears of a looming recession weighed on consumer and advertiser spending, the latter of which makes up the core business of many household names in tech.

    The result was a bloodbath unlike anything the tech industry has seen in the past decade. Tech stocks plunged, amid a broader market downturn. Tens of thousands of rank-and-file tech workers lost their livelihoods amid mass layoffs, both at tech giants like Amazon and Facebook-parent Meta as well as at smaller tech companies like Lyft, Peloton and Stripe. The crypto world all but imploded. And an entire industry known for burning cash on ambitious moonshots instead started shutting down projects and announcing cost-cutting efforts.

    Even the title of world’s richest man, which previously belonged to serial tech founder Elon Musk, ended up passing to Bernard Arnault, the chairman of French luxury goods giant LVMH, after Musk’s chaotic purchase of Twitter appeared to sour investors on his car company, Tesla.

    The sharp shift in sentiment not only removed the air of invincibility for the industry; it also exposed some of its underlying myths. For years, Silicon Valley has held up its founders as visionaries who can see far into the future. But suddenly, many of its most prominent founders had to admit a harsh truth: they couldn’t even predict two years ahead.

    As Facebook founder Mark Zuckerberg put it in a memo to staff last month announcing the company would cut 11,000 employees: “Unfortunately, this did not play out the way I expected.”

    He was far from the only one in the industry caught off guard.

    When the pandemic upended the broader economy in early 2020, tech firms only seemed to grow bigger and more powerful as people were forced to live out their lives online. Facebook (now Meta) could afford to nearly double its headcount and make multi-billion-dollar bets on a future version of the internet dubbed the metaverse. Amazon similarly went on a hiring spree and doubled its fulfilment center footprint to meet the surge in online shopping demand.

    “At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg wrote in his memo to staff last month. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments.”

    Then the market shifted.

    “People are terrible at predicting the future, and we always think that what’s happening now is going to happen forever,” Angela Lee, a professor at Columbia Business School who teaches venture capital, leadership, and strategy courses, told CNN. “But the reality is that the pandemic was a black swan event, and none of us knew what would happen going forward.”

    One by one, the visionaries of Silicon Valley issued mea culpas. The founders of Stripe, Twitter and Facebook each took turns admitting they either grew their companies too quickly or were overly optimistic about pandemic-fueled growth in their sector.

    “We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Patrick Collison, CEO of Stripe, wrote in a note to employees last month announcing 14% of the staff would be cut.

    It wasn’t only a shift in consumers living their lives offline again that hurt the industry. The tech sector was particularly pummeled by the impacts of rising interest rates this year. Silicon Valley as a whole is arguably more sensitive to interest rate hikes than other industries, as many tech companies rely on easy access to funding to pursue their ambitious projects, typically before even turning a profit.

    In a move to tame inflation, the Fed approved seven-straight rate hikes in 2022. Since the beginning of the year, the tech-heavy Nasdaq index shed more than 30% as of Dec. 21. By comparison, the Nasdaq soared more than 40% in 2020 and a further 20% in 2021. And the S&P 500’s Information Technology sector shed more than 28% this year through Dec. 21, considerably higher than the broader S&P 500’s fall of just 19% over that same period.

    Apple’s market cap now hovers just above $2 trillion. Amazon’s stock has shed some 50% year to date. And shares for Meta have been hit even harder, losing nearly two thirds of their value in 2022. Once a trillion-dollar business last year, Meta has since seen its market value drop below companies like Home Depot.

    The shift in sentiment for tech has also hit the next generation of companies that aspire to be household names.

    Global venture funding hit a nine quarter low of $74.5 billion in the third quarter of 2022, according to data from analytics firm CB Insights. This marked the largest quarterly percentage drop in a decade (34%), and a 58% decline from the investment peak reached in the fourth quarter of 2021.

    In another sign of how this played out in the startup world: more than two new unicorns (startups valued at $1 billion or more) were born on average per business day in 2021, according separate data from CB Insights. That rate dropped to a pace of less than one new unicorn for every other business day in the third quarter of 2022, per CB Insights’ most recent analysis, the lowest since the first quarter of 2020.

    Lee, who is also the founder of investing network 37 Angels, said when she met with tech founders this year, “I have said these words, which is, ‘I might have done this deal last year, but I am not going to do it now.’ And I’ve heard a lot of other people say that as well.”

    While the belt tightening might be painful for tech founders, Lee says she views it as a good thing for the tech industry overall. Many industry insiders have long said these sorts of corrections can help weed out some of the excess in the market and ensure more financially viable companies are the ones that survive.

    “Right now, there are like a lot of headlines that are just like, ‘The sky is falling, the end is near,’ and the way that I describe it is more of like a return to normalcy,” said Lee, noting that most charts tracking VC spending (from the number of mega-rounds to the number of IPOs) had a huge hump in 2020 and 2021 when interest rates were low, and now these charts are starting to look like how they did in 2019.

    “I would just call it like a ‘return to sanity,’ versus like, ‘the sky is falling,’” Lee said. “I do not think venture is cratering, or the tech industry is cratering as an industry.”

    But for now, at least, there appears to be no end in sight to the pain for Silicon Valley and those who work in it.

    In his own memo acknowledging job cuts at Amazon, CEO Andy Jassy said the layoffs at Amazon, reported to total some 10,000 roles, would continue into 2023. At a conference last month, he called the earlier hiring spree a “lesson” for everybody.

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  • Senior citizens will soon get that big hike in their Social Security benefits | CNN Politics

    Senior citizens will soon get that big hike in their Social Security benefits | CNN Politics

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    CNN
     — 

    Senior citizens and other Social Security recipients will start getting a heftier monthly benefit next month due to an 8.7% annual cost-of-living adjustment aimed at helping them cope with high inflation.

    The increase, the largest in more than 40 years, will boost retirees’ monthly payments by more than $140 to an estimated average of $1,827 for 2023.

    The adjustment is the highest that most current beneficiaries have ever seen because it is based on an inflation metric from August through October, which was also around 40-year highs. Inflation has cooled somewhat since then, though prices remain elevated.

    “I’m sure everyone is anxiously awaiting because prices are still high,” said Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League, an advocacy group. “Just shopping for food to feed people during the holidays is going to be a huge challenge.”

    Roughly 70 million people will receive the increase, which follows a 5.9% adjustment for 2022.

    Many senior citizens depend heavily on Social Security. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration.

    Just when the beefed-up payment will arrive depends on recipients’ ages and birth dates. Those who received Social Security before May 1997 get their monthly benefit on the 3rd of each month. For more recent retirees, those whose birth dates are the 1st through the 10th of the month receive it on the second Wednesday, while those born on the 11th to 20th and the 21st to 31st of the month are paid the third and fourth Wednesdays, respectively.

    Even though recipients received a sizable adjustment for this year, inflation ate away at the boost.

    The increase fell short of actual inflation by an average of more than $42 – or 46% – every month or roughly $508 for the year, Johnson said.

    Many retirees have been forced to turn to their savings or public assistance. One-third of seniors reported signing up for food stamps or visiting a food pantry over the past 12 months, compared with 22% in 2020, according to recent surveys by The Senior Citizens League. Also, 17% have applied for assistance with heating costs, compared with 10% in 2020.

    This is not a new problem. Benefits have not kept up with the rising cost of living for years, even with the annual adjustments.

    As of March, inflation has caused Social Security payments to lose 40% of their buying power since 2000, according to a study released earlier this year by the league. Monthly benefits would have to increase by $540 to maintain the same level of buying power as in 2000.

    Senior citizens will also see their Medicare Part B premiums drop in 2023, the first time in more than a decade that the tab will be lower than the year before, the Centers for Medicare and Medicaid Services announced in the fall. It’s only the fourth time that premiums are declining since Medicare was created in 1965.

    The standard monthly premiums will be $164.90 in 2023, a decrease of $5.20 from 2022.

    The reduction comes after a large spike in 2022 premiums, which raised the standard monthly premium to $170.10, up from $148.50 in 2021. A key driver of the 2022 hike was a projected jump in spending due to a costly new drug for Alzheimer’s disease, Aduhelm. However, since then, Aduhelm’s manufacturer cut the price and the Centers for Medicare and Medicaid Services limited coverage of the drug.

    Also, spending was lower than projected on other Part B items and services, which resulted in much larger reserves in the Part B trust fund, allowing the agency to limit future premium increases.

    The big annual adjustment could end up hurting some seniors, Johnson said.

    For instance, the resulting increase in income could push them above the thresholds for certain government benefits, such as Medicare Extra Help, Medicaid, food stamps and rental assistance, leaving them eligible for less or no aid. Or they could have to pay more for their Medicare Part B premiums, which are adjusted for income.

    Also, they could have to start paying taxes – or owe higher levies – on their Social Security benefits if their income rises above a certain level.

    Further, the increase could leave Social Security’s finances on even shakier ground. The combined trust funds that pay benefits to retirees, survivors and the disabled will be depleted by 2035 and only able to distribute roughly three-quarters of promised payments unless Congress addresses the program’s long-term funding shortfall, according to the most recent Social Security trustees’ report.

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  • Justice Department sues pharmaceutical company for allegedly failing to report suspicious opioid sales | CNN Politics

    Justice Department sues pharmaceutical company for allegedly failing to report suspicious opioid sales | CNN Politics

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    Washington
    CNN
     — 

    The Justice Department on Thursday alleged that the AmerisourceBergen Corporation, one of the country’s largest pharmaceutical distributors, and two of its subsidiaries failed to report hundreds of thousands of suspicious prescription opioid orders to pharmacies across the country.

    The lawsuit, which spans several states, alleges that AmerisourceBergen disregarded its legal obligation to report orders of controlled substances to the Drug Enforcement Agency for nearly a decade. The company ignored “red flags” that pharmacies in West Virginia, New Jersey, Colorado and Florida were diverting opioids into illegal drug markets, the suit says.

    “The Department of Justice is committed to holding accountable those who fueled the opioid crisis by flouting the law,” Associate Attorney General Vanita Gupta said in a statement Thursday.

    “Companies distributing opioids are required to report suspicious orders to federal law enforcement. Our complaint alleges that AmerisourceBergen – which sold billions of units of prescription opioids over the past decade – repeatedly failed to comply with that requirement,” she added.

    If AmerisourceBergen is found liable at trial, the company faces billions of dollars in financial penalties, the Justice Department said.

    Lauren Esposito, a spokesperson for AmerisourceBergen, countered on Thursday in a statement that said the Justice Department’s complaint rested on “five pharmacies that were cherry picked out of the tens of thousands of pharmacies that use AmerisourceBergen as their wholesale distributor, while ignoring the absence of action from former administrators at the Drug Enforcement Administration – the DOJ’s own agency.”

    She added: “With the vast quantity of information that AmerisourceBergen shared directly with the DEA with regards to these five pharmacies, the DEA still did not feel the need to take swift action itself – in fact, AmerisourceBergen terminated relationships with four of them before DEA ever took any enforcement action while two of the five pharmacies maintain their DEA controlled substance registration to this day.”

    Yet AmerisourceBergen was allegedly aware that in two of the pharmacies, drugs it distributed were likely being sold in parking lots for cash, the Justice Department said. In another pharmacy, the company was allegedly warned that patients likely suffering from addiction were receiving opioids, including some people who later died of a drug overdose.

    The Justice Department also noted in its lawsuit that AmerisourceBergen’s reporting systems for suspicious opioid orders were deeply inadequate, and that the company intentionally changed its reporting systems to reduce the number of orders flagged as suspicious amid the opioid epidemic.

    Even when orders were flagged as suspicious, AmerisourceBergen often didn’t report those orders to the DEA, according to the complaint.

    Opioids are involved in the vast majority of drug overdose deaths, though synthetic opioids – particularly fentanyl – have played an outsized role. Synthetic opioids – excluding methadone – were involved in more than 72,000 overdose deaths in 2021, about two-thirds of all overdose deaths that year and more than triple the number from five years earlier.

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  • House investigation says FDA approval process of Alzheimer’s drug was ‘rife with irregularities’ | CNN

    House investigation says FDA approval process of Alzheimer’s drug was ‘rife with irregularities’ | CNN

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    CNN
     — 

    A congressional investigation found that the US Food and Drug Administration’s “atypical collaboration” to approve a high-priced Alzheimer’s drug was “rife with irregularities.”

    The report, released Thursday, was the result of an 18-month investigation by two House committees. It is sharply critical of Biogen, maker of the medication Aduhelm.

    The report says Biogen set an “unjustifiably high price” for Aduhelm to “make history” for the company, and thought of the drug as an “unprecedented financial opportunity.” Biogen priced Aduhelm at $56,000 per year, even though its actual effects on a broad patient population were unknown.

    More than 6.5 million people in the US live with Alzheimer’s, and that number is expected to grow to 13.8 million by 2060, according to the Alzheimer’s Association. The disease is the sixth leading cause of death in the United States. There is no cure, and effective treatments are extremely limited. Before Aduhelm’s approval in June 2021, the FDA had not approved a novel therapy for the condition since 2003.

    The investigation found that Biogen planned an aggressive marketing campaign to launch the drug, intending to spend more than $3.3 billion on sales and marketing between 2020 and 2024 – more than 2½ times what it spent to develop Aduhelm.

    Dementia, including Alzheimer’s, is one of the “costliest conditions to society,” according to the Alzheimer’s Association. In 2022 alone, Alzheimer’s and other dementias cost the US $321 billion, including $206 billion in Medicaid and Medicare payments, the association says.

    Aduhelm’s cost to patients and to Medicare would be significant, the new report says. It was one of the key factors behind a big increase in Medicare premiums in 2022, according to the Centers for Medicare and Medicaid Services.

    In anticipation of “pushback” from providers and payers, the report says, Biogen also prepared a narrative to sell the value of the drug.

    The Committee on Oversight and Reform and the Committee on Energy and Commerce found that the collaboration between the FDA and Biogen in the approval process of the drug “exceeded the norm in some respects.”

    Biogen had initially discontinued Aduhelm’s clinical trials in March 2019 after an independent committee found that it probably would not slow the cognitive and functional impairment – the decline in memory, language and judgment – that comes with Alzheimer’s. But in June 2019, the FDA and Biogen started a “working group” to see whether the effort could be saved.

    The investigation found that the FDA and Biogen engaged in at least 115 meetings, calls and substantive email discussions from July 2019 to July 2020, including 40 meetings to guide Aduhelm’s potential approval. There may have been even more meetings, but the committees say the FDA failed to follow its own documentation protocol.

    The agency then collaborated with Biogen to draft a document used to brief an independent advisory committee that met in November 2020. The trial results were mixed, with only one showing a small benefit to patients.

    At that meeting, none of the committee’s members voted to say that the studies presented strong evidence that the drug was effective at treating Alzheimer’s.

    The meeting was unusual, according to one former FDA adviser who had sat on the committee for several years. Dr. Aaron Kesselheim told CNN in 2021 that the relationship between the FDA and the company was out of the ordinary.

    “There was a strange dynamic compared to the other advisory committee meetings I’ve attended,” the professor at Harvard Medical School said. “Usually, there’s some distance between the FDA and the company, but on this one, the company and the FDA were fully in line with each other in support of the drug.”

    When the FDA approved the drug, Kesselheim and two other members of the advisory committee resigned in protest. He later labeled it “probably the worst drug approval decision in recent US history.”

    The FDA often follows the independent committee’s recommendations, but in this case, it changed course and used its accelerated approval pathway, which sets a different standard of proof that a treatment could work.

    The committee members said senior FDA leadership told them that the shift in how the drug would be approved came after an FDA expert council meeting in April 2021 provided “unfavorable feedback” for the traditional approval process, according to the new report.

    The FDA also approved the drug for “people with Alzheimer’s disease,” a far broader population than was studied in Biogen’s clinical trials.

    Internal documents from the company said that Biogen accepted this broader indication “despite internal reservations about the lack of evidence of clinical benefit for patients at disease stages outside of the clinical trials and an unknown safety profile,” the report says. Leaders expressed concern that the company could lose credibility, and it developed a communications strategy to deal with the “anticipated fallout,” the report says.

    The committees recommended that the FDA document all of its meetings with drug sponsors, establish a protocol for briefing documents and advisory committees, and update its guidance for how Alzheimer’s drugs are developed and reviewed.

    The committees also recommended that companies clearly communicate safety and efficacy concerns to the FDA and consider the value assessments made by outside experts when setting drug prices.

    “The American people rely on FDA for assurance on the safety and efficacy of the medications they take. The number of patients and families impacted by Alzheimer’s disease will continue to increase, and it is crucial that FDA and drug companies adhere to established procedures and conduct themselves with the transparency necessary to earn public trust,” the report says.

    The FDA said in a statement that its “decision to approve Aduhelm was based on our scientific evaluation of the data contained in the application, which is described in the approval materials.”

    The agency says it is reviewing the committees’ findings and recommendations and says its own review found that the interactions with Biogen were appropriate.

    “It is the agency’s job to frequently interact with companies in order to ensure that we have adequate information to inform our regulatory decision-making. We will continue to do so, as it is in the best interest of patients. That said, the agency has already started implementing changes consistent with the Committee’s recommendations.”

    Biogen said in a statement Thursday that it has been working “cooperatively” with the investigation.

    “Biogen has been committed to researching and developing treatments for Alzheimer’s disease for more than a decade. We have been focused relentlessly on innovation to address this global health challenge, and have adapted to both successes and setbacks,” it said. “Biogen stands by the integrity of the actions we have taken.”

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  • Hackers stole data from multiple electric utilities in recent ransomware attack | CNN Politics

    Hackers stole data from multiple electric utilities in recent ransomware attack | CNN Politics

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    CNN
     — 

    Hackers stole data belonging to multiple electric utilities in an October ransomware attack on a US government contractor that handles critical infrastructure projects across the country, according to a memo describing the hack obtained by CNN.

    Federal officials have closely monitored the incident for any potential broader impact on the US power sector while private investigators have combed the dark web for the stolen data, according to the memo sent this month to power company executives by the North American grid regulator’s cyberthreat sharing center.

    The previously unreported incident is a window into how ransomware attacks on critical US companies are handled behind the scenes as lawyers and federal investigators quietly spring into action to determine the extent of the damage.

    The ransomware attack hit Chicago-based Sargent & Lundy, an engineering firm that has designed more than 900 power stations and thousands of miles of power systems and that holds sensitive data on those projects.

    The firm also handles nuclear security issues, working with the departments of Defense, Energy and other agencies “to strengthen nuclear deterrence” and keep weapons of mass destruction out of terrorists’ hands, according to its website.

    Two people familiar with the investigation of the Sargent & Lundy hack told CNN that the incident was contained and remediated, and didn’t appear to have a broader impact on other power-sector firms.

    There is no sign that data stolen from Sargent & Lundy, which includes “model files” and “transmission data” the firm uses for utility projects, is on the dark web, according to the memo from the Electricity Information Sharing and Analysis Center.

    But security experts have long been concerned that schematics held by electric and nuclear power contractors could be dumped online and used for follow-on physical or cyberattacks on those facilities.

    “These are literally the configurations for your programmable logic controllers, your relays,” said longtime security consultant Patrick Miller, referring to critical electric equipment that keeps the lights on. “We’re really concerned about the data that’s in those organizations.”

    Those concerns are particularly acute following a spate of physical attacks and vandalism at electric utilities in multiple states. Tens of thousands of people lost power in Moore County, North Carolina, this month after Duke Energy substations were damaged by gunfire. On Christmas, thousands of people lost power in a Washington county after someone vandalized multiple substations there.

    “We’re fully recovered from the incident, which had minimal impact on our normal business operations,” Brenda Romero, a spokesperson for Sargent & Lundy, said in a statement to CNN. Romero said the firm “notified law enforcement” of the hack.

    Romero declined to answer further questions on the ransomware attack, including whether the hackers had tried to extort Sargent & Lundy, citing an ongoing investigation.

    The Biden administration has urged companies to share data on such hacks as US officials have tried to get a grip on the epidemic of ransomware, which has cost critical infrastructure firms many millions of dollars.

    The hackers that hit Sargent & Lundy used a strain of ransomware known as Black Basta that first surfaced early this year, according to two people familiar with the investigation. Scores of Black Basta attacks have been reported since April, according to cybersecurity firm Palo Alto Networks. The hackers steal data from their victims to give them added leverage in ransom negotiations.

    Sargent & Lundy is one of several engineering firms whose work on critical infrastructure projects cuts across different sectors of the economy. For US cybersecurity officials, this engineering work can be harder to evaluate in terms of its risk to supply chain security than a firm that only makes software.

    Federal regulations require electric utilities to maintain certain cybersecurity standards for protecting their systems from hacks. Companies that contract with those utilities, such as Sargent & Lundy, aren’t necessarily held to the same standard and are instead bound by the security requirements in the contract, experts told CNN.

    “Utilities are effectively allowed to accept as much risk as they want,” said Miller, who is CEO of Oregon-based Ampere Industrial Security, a consulting firm. “Is it perfect? No, but [the contractors] are being assessed [for their security] in some ways through the utilities.”

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  • Oil and Turkish stocks were 2022 market winners. Russia funds and crypto tanked | CNN Business

    Oil and Turkish stocks were 2022 market winners. Russia funds and crypto tanked | CNN Business

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    New York
    CNN
     — 

    Oil stocks skyrocketed in 2022, so it’s no surprise funds that track the energy sector were Wall Street winners this year. But the top fund of the year is a surprising one: It invests in a variety of companies based in Turkey.

    The iShares MSCI Turkey exchange-traded fund had more than doubled as of December 19, according to data from Morningstar Direct. The fund has big stakes in Turkish financial giant Akbank, Istanbul-based retailer Bim and the parent company of Turkish Airlines.

    Turkey has been hit hard by inflation, like the rest of the world, and its currency, the lira, has plummeted against the US dollar and other leading global currencies.

    So why the big gains?

    Turkey’s stock market thrived because the country is doing something most others aren’t: Its central bank has been slashing interest rates to prop up consumer spending. Turkish President Recep Tayyip Erdogan wants to keep rates super low. He has even fired several central bankers in the past few years who refused to lower rates.

    The Turkish economy has slowed recently as unemployment has risen, but the instability has not hurt Turkish stocks. The iShares Turkey ETF has also had a lift from higher energy prices, as refinery Tüpraş is a top holding.

    Other US and international oil funds and ETFs were also at the top of Morningstar Direct’s list. (Morningstar Direct provided CNN Business with a ranking of the best and worst mutual funds and ETFs for 2022, excluding so-called leveraged funds that make outsized bets on stock market indexes.)

    The United States 12 Month Natural Gas

    (UNL)    , Energy Select Sector SPDR

    (XLE)     and several oil/energy funds run by top investing firms like Fidelity, Vanguard and BlackRock’s

    (BLK)     iShares are all up between 50% and 80% for the year.

    In this rocky year for stocks, there were significantly more losers than winners in the mutual fund and ETF world in 2022. The SPDR S&P 500 ETF

    (SPY)     and Invesco QQQ

    (QQQ)    , which track the S&P 500 and Nasdaq 100, were down 19% and 31% respectively.

    But no funds were hit harder than ETFs with exposure to Russia.

    Most funds with investments in top Russian companies either liquidated or halted trading following Vladimir Putin’s decision to invade Ukraine in late February, an act that essentially forced the United States, Europe and rest of the Western world to cut ties with Moscow and Russian businesses.

    Investments in Russia ETFs from iShares, VanEck and Voya were pretty much wiped out.

    The carnage in cryptocurrencies also hit several funds hard. Bitcoin prices were plunging even before the collapse of former crypto unicorn FTX. But the stunning demise of Sam Bankman-Fried’s company sent further shock waves throughout the industry.

    Funds from Osprey, Grayscale, VanEck (again), Global X, Bitwise, First Trust, Invesco and many other institutional investment firms all tumbled more than 70% in 2022.

    Other once-trendy funds were also hit hard this year.

    Several of the Ark ETFs run by Cathie Wood, which had significant exposure to Tesla

    (TSLA)    , Coinbase, Zoom

    (ZM)    , Roku

    (ROKU)     and other momentum tech stocks that have dropped precipitously in 2022, were among the biggest fund losers.

    Numerous funds focusing on cannabis stocks also, ahem, went to pot this year. Cannabis ETFs from AdvisorShares, Global X and Amplify all plunged more than 60%. Even though more states are legalizing recreational and medicinal weed, intense competition in the business is making it difficult for cannabis companies to generate profits.

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  • Power substations vandalized in Washington state weeks after North Carolina electricity attack and FBI warning | CNN

    Power substations vandalized in Washington state weeks after North Carolina electricity attack and FBI warning | CNN

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    CNN
     — 

    After thousands of customers in Pierce County, Washington, were affected Sunday when burglars vandalized three energy substations, power was then knocked out for even more homes after a suspect or suspects gained access to a fourth substation, vandalizing the equipment and causing a fire, according to an update from the Pierce County Sheriff’s Department.

    The damaged equipment cut power to around 14,000 customers, police said, weeks after an attack in North Carolina left thousands in the dark for days amid federal warnings of extremist threats to electricity infrastructure.

    The Christmas Day vandalism near Tacoma marked more such incidents in the state, where two November attacks on Puget Sound Energy substations were investigated by the FBI. Vandalism and deliberate damage were reported last month at substations in southern Washington and Oregon.

    No suspects are in custody in the latest case affecting Puyallup and Graham, Washington, and it “is unknown if there are any motives or if this was a coordinated attack on the power systems,” the Pierce County Sheriff’s Department said Sunday in a statement.

    The FBI’s Seattle Division was aware of the vandalism reports but would not confirm or deny its role in any investigation, adding, “We do take threats against our infrastructure seriously and urge anyone with information to contact law enforcement,” it told CNN on Sunday.

    The bureau in a November 22 bulletin warned of reports of threats to electricity infrastructure by people espousing racially or ethnically motivated extremist ideology “to create civil disorder and inspire further violence,” according to the alert sent to private industry.

    The first report of a burglary at a Tacoma Public Utilities substation came at 5:26 a.m. PT, the sheriff’s office said.

    “Deputies arrived on scene and saw there was forced entry into the fenced area,” according to its statement. “Nothing had been taken from the substation, but the suspect vandalized the equipment causing a power outage in the area.”

    Then, a second burglary was reported at another Tacoma Public Utilities substation, with forced entry and damage to equipment, the statement said. Similarly, nothing was taken.

    “At 11:25 we were notified by Puget Sound Energy that they too had a power outage this morning at 02:39 a.m. Deputies are currently on scene at this facility where the fenced area was broken into and the equipment vandalized,” the statement continued.

    Dispatchers received a call about a fire at another substation at 7:21 p.m. local time Sunday, the sheriff’s department said. Firefighters and Puget Sound Energy employees responded to the scene and were able to extinguish the fire and secure and the substation.

    Power has since been restored to most of the affected homes, the update said.

    Anti-government groups over the past two years have used online forums to urge followers to attack critical infrastructure, including the power grid. They have posted documents and even instructions outlining vulnerabilities and suggesting the use of high-powered rifles.

    Investigators probing the attacks last month at substations in Moore County, North Carolina, zeroed in on two possible threads: extremists’ writings in online forums encouraging attacks on critical infrastructure, and recent disruptions of LGBTQ+ events across the nation by domestic extremists, law enforcement sources told CNN.

    The attackers “knew exactly what they were doing,” Moore County Sheriff Ronnie Fields said at the time.

    The resulting outages left some 40,000 customers scrambling as temperatures dipped to the mid-40s, with schools and businesses forced to close for days before power was restored.

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  • A prolonged winter storm delivers power outages, snarled travel and frigid temperatures on Christmas Day | CNN

    A prolonged winter storm delivers power outages, snarled travel and frigid temperatures on Christmas Day | CNN

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    CNN
     — 

    A nearly weeklong winter storm blasting much of the US has plunged temperatures to life-threatening lows, brought blizzards and floods, and left more than a quarter million people without power on Christmas Day.

    Blizzard conditions continue across the Great Lakes, while frigid cold temperatures grip the eastern two-thirds of the US, with some major cities in the Southeast, Midwest and East Coast recording their coldest Christmas in decades.

    Large areas of the central and eastern US remain under wind chill warnings and advisories, as freeze warnings are in effect across the South.

    New York City saw record cold temperatures on Christmas Eve at several locations, including its JFK and LaGuardia airports. The high at Central Park was 15 degrees, marking its second-coldest December 24 in at least 150 years, according to the National Weather Service.

    At least 22 deaths have been attributed to dangerous weather conditions since Wednesday, and some residents in the Northeast are spending the holiday without sufficient heat or hot water as extremely cold temperatures persist.

    Across the US, 275,856 homes and businesses in the US had no electricity service as of 1 a.m. ET, many of them in Maine and New York, according to PowerOutage.us. Since the start of the storm the number of outages has at times exceeded a million customers.

    A power grid operator for at least 13 states in the country’s eastern half asked customers to conserve power and set thermostats lower than usual from early Saturday to 10 a.m. on Sunday because usage was straining capacity.

    The operator, PJM Interconnection, serves about 65 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia, and warned rolling blackouts could happen if the strain becomes too much.

    In New York, utility companies Con Edison and Natural Grid US also urged customers to conserve energy, citing extreme weather conditions and increased energy demand on interstate pipelines carrying natural gas into the city.

    Meanwhile, a shortage of electricity in Texas prompted the US Department of Energy to declare an emergency Friday, allowing the state’s energy provider to exceed environmental emissions standards until energy usage drops.

    In Jackson, Mississippi, frigid temperatures are hampering efforts to repair a large water main break late Saturday, which has caused a loss in water pressure for residents, city officials said.

    “We are grateful to the crews who are braving these frigid temperatures on this Christmas Eve night, while working to restore pressure to residents. Their sacrifice does not go unnoticed and is appreciated not only by this administration, but also by every resident who is affected,” the release stated.

    The brutal weather conditions have also snarled travel during the busy holiday weekend, with more than 5,000 flights canceled Friday, more than 3,400 flights canceled Saturday, and more than 1,000 canceled for Christmas Day.

    Conditions on the road weren’t any better in parts of the country amid whiteout conditions and icy and snow-covered roadways.

    In New York’s Erie County – which is seeing blistering blizzard conditions – about 500 motorists found themselves stranded in their vehicles Friday night into Saturday morning, despite a county driving ban put in place during the storm, according to County Executive Mark Poloncarz.

    National Guard troops were called in to help “rescue people that are stuck in vehicles,” and to give rides to medical workers so they could relieve colleagues who had been working at hospitals for more than a day, Poloncarz said.

    In Seattle, Washington, online videos have documented cars sliding on the icy roads and bumping into each and residents slipping as they walked on sidewalks, CNN affiliate KOMO reported.

    New York Gov. Kathy Hochul said she will ask the federal government for a declaration of emergency after a blistering winter storm.

    “I’ll be asking the federal government for a declaration of emergency that’ll allow us to seek reimbursements for the extraordinary expenses of all the overtime and the fact that we brought in mutual aid from other parts of the state,” Hochul said to reporters Saturday. “We’ve deployed individuals – the utility crews have come but also making sure that we have all the vehicles we need.”

    New York’s three storm-related deaths were reported in Erie County. Two died in separate incidents Friday night when emergency medical personnel could not get to their homes in time for medical emergencies, Poloncarz said Saturday morning. Details about the third death, confirmed by a county spokesperson Saturday afternoon, weren’t immediately available.

    “The loss of two lives in Buffalo – storm related – because people were not able to get to medical attention, is again a crisis situation that unfolds before your eyes and you realize that lifesaving ambulances and emergency medical personnel cannot get to people during a blizzard situation,” Hochul added.

    Other storm-related deaths have been reported in the country. They include:

    • Colorado: Police in Colorado Springs, Colorado, reported two deaths related to the cold since Thursday, with one man found near a power transformer of a building possibly looking for warmth, and another in a camp in an alleyway.

    • Kansas: Three people have died in weather-related traffic accidents, the Kansas Highway Patrol said Friday.

    • Kentucky: Three people have died in the state, officials have said, including one involving a vehicle accident in Montgomery County.

    • Missouri: One person died after a caravan slid off an icy road and into a frozen creek, Kansas City police said.

    • Ohio: Eight people have died as a result of weather-related auto accidents, including four in a Saturday morning crash on Interstate 75, when a semi tractor-trailer crossed the median and collided with an SUV and a pickup, authorities said.

    • Tennessee: The Tennessee Department of Health on Friday confirmed one storm-related fatality.

    • Wisconsin: Wisconsin State Patrol on Thursday reported one fatal crash due to winter weather.

    In pictures: Winter storm impacts the US


    The storm system is forecast to gradually weaken as it lifts into southeastern Canada, moving slowly during the next couple of days and pulling arctic air from Canada down into much of the eastern side of the country.

    The Arctic blast being felt across the eastern two-thirds of the nation will slowly moderate into Monday, but dangerous conditions will persist Christmas Day.

    The cold temperatures combined with dangerous wind chills will create a potentially life-threatening hazard for travelers who become stranded, people who work outside, livestock and pets, according to the National Weather Service.

    “In some areas, being outdoors could lead to frostbite in minutes,” the Weather Service warned.

    As the frigid air continues to blast the warm waters of the Great Lakes, lake-effect snows and blizzard conditions are expected to continue, but slowly become less intense.

    Still, strong gusty winds initially up to 60 mph accompanying the snow downwind from the Great Lakes will continue to make for extremely dangerous conditions on the road.

    By Christmas night into Monday, another low pressure system coming from the Pacific will deliver the next surge of moisture toward the Pacific Northwest and then into northern California, according to the Weather Service.

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  • A powerful winter storm claims at least 11 lives across the US as temperatures plunge, winds howl and power lines fall | CNN

    A powerful winter storm claims at least 11 lives across the US as temperatures plunge, winds howl and power lines fall | CNN

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    CNN
     — 

    Hundreds of thousands of Americans are waking up in the dark to unlit trees on Christmas Eve, after destructive winds and heavy snow from a winter storm tore down power lines and endangered drivers across the country, killing at least 11 people in its path.

    As bone-chilling temperatures continue to grip the US this holiday weekend, the unrelenting storm is pummeling the Midwest and parts of the East with heavy snow, blizzard conditions and even flooding along the Northeast coast. No letup is in sight until the end of Christmas Day.

    Related: Follow live updates

    At least 11 people have died since Wednesday across four states, a result of how dangerous and life-threatening conditions have been this week over a large swath of the country.

    Three people died in separate car crashes in north-central Kansas on Wednesday, Highway Patrol spokesperson Lt. Candice Breshears said. All three deaths are confirmed to have been weather-related, Breshears noted.

    In Kansas City, Missouri, one person died after losing control of their vehicle on icy roads Thursday afternoon, according to the Kansas City Police Department. The vehicle “went down the embankment, over the cement retaining wall and landed upside down” into a creek, police said in a statement.

    Four people died in car crashes in Ohio, where others were also injured, Gov. Mike DeWine said.

    Kentucky reported three deaths caused by the storm: Two in car crashes and another was a person who was unhoused in Louisville, Gov. Andy Beshear said. The man’s body was found outside with no obvious signs of trauma – an autopsy is required to determine the cause of death, police said.

    For days, forecasters and officials have been sounding the alarm on the grim conditions the storm promised to bring, while imploring drivers to stay off the icy, snow-covered roads and other travelers to alter holiday plans for optimal safety.

    “Remember your loved ones care more about having you alive and that next Christmas than whether you can make this one,” Beshear told CNN Friday.

    “People need to stay off the roads. … Being together is more important than ever, but staying safe is even more important than that,” Beshear added.

    The ominous warning comes as the storm continues to bear down with blizzard conditions from the Great Lakes and interior Northeast, bringing the double threat of heavy snow and speedy winds.

    Hundreds of drivers across multiple states, including New York, South Dakota and Minnesota were stranded this week and needed rescuing. Some states have closed major highways to deter drivers from getting behind the wheel. Plus, more than 5,000 flights were canceled Friday, and more than 10,000 were delayed.

    To make matters worse, even if snowfall stops or slows down, whiteout conditions are likely because winds are forecast to near or surpass 60 mph, resulting in damage and more power outages.

    “If you do lose power, it is going to be dangerously cold,” said Jackie Bray, the commissioner of New York’s Homeland Security and Emergency Services, adding people should seek warming shelters provided by some counties. “Please don’t assume that you can weather this cold overnight without heat. You may not be able to.”

    So far, hundreds of thousands of homes and businesses have no electricity, according to PowerOutage.US, which means millions of residents likely do not have proper heating or hot water as extremely cold temperatures persist Saturday.

    New Hampshire, New York and Virginia each have more than 50,000 outages as of early Saturday, while more than 240,000 outages are reported in Maine, the website shows.

    In pictures: Winter storm impacts the US


    Here’s what else you can expect this Christmas Eve:

    • The cold is coming for many: More than 175 million people are under wind chill alerts from across much of the central and eastern US. “The life-threatening Cold Temperatures and Dangerous wind chills will create a potentially life-threatening hazard for travelers that become stranded,” the National Weather Service said.
    • Record temps in the South: Atlanta and Tallahassee, Florida, are forecast to have their coldest high temperature ever recorded on December 24, according to the weather service.
    • Brutal cold elsewhere: Philadelphia and Pittsburgh will also see their coldest day Christmas Eve ever on Saturday. Washington, DC, could see its second-coldest on Christmas Eve, the first being in 1989. New York is set to experience its coldest Christmas Eve since 1906. Chicago is expecting temperatures to rebound above zero but will still experience its coldest Christmas Eve since 1983.
    • Flooding threats persist: Both coastal and inland flooding risks are in store for the Northeast from heavy rain falling onto a melting snowpack. Moderate to isolated major coastal flooding is possible due to strong onshore winds.

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  • A least 9 dead as massive winter storm leaves more than a million without power and bitter cold across much of US | CNN

    A least 9 dead as massive winter storm leaves more than a million without power and bitter cold across much of US | CNN

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    CNN
     — 

    A massive winter storm battered the US on Friday with frigid temperatures, high winds and heavy snow, leaving at least nine people dead, knocking out power to over a million customers and wrecking holiday plans from coast to coast.

    The storm – expected to intensify throughout Friday as it barrels through the Midwest and East – is making for grim road conditions with poor visibility and ice-covered streets. Coastal flooding is also an issue, particularly along the shorelines of the Northeast.

    All modes of travel – planes, trains and automobiles – were being disrupted: There were hundreds of miles of road closures and flight cancellations were growing rapidly. In New York, flooding along the Long Island Rail Road forced part of the Long Beach branch to temporarily shut down.

    Related: Follow live updates

    “Christmas is canceled,” said Mick Saunders, a Buffalo, New York, resident who was two hours into blizzard conditions that are expected to last through Sunday morning. “All family and friends agreed it’s safer this way.”

    At least 9 deaths have been reported since Wednesday.

    In north-central Kansas, three people were killed in separate car crashes on Wednesday evening; one death was confirmed to be weather-related, and two were believed to be weather-related but need more investigation, according to Kansas Highway Patrol spokesperson Lt. Candice Breshears.

    In Kansas City, one person died after losing control of their Dodge Caravan on icy roads Thursday afternoon, according to the Kansas City Police Department. “The Dodge went down the embankment, over the cement retaining wall and landed upside down, submerged in Brush Creek,” police said in a statement.

    In Kentucky, three people died due to the storm, including two in vehicle crashes and the other a “housing insecure” person in Louisville, Gov. Andy Beshear said. The man’s body was found outside with no obvious signs of trauma and an autopsy would determine the cause of death, police said.

    And in Ohio, four people have died “as a result of weather-related auto accidents” and several others have been injured, according to Gov. Mike DeWine.

    Life threatening cold has pushed all the way to the Gulf Coast and the Mexican border, with below zero wind chills reported as far south as Austin and Atlanta. Many locations in the eastern US are in for their coldest Christmas Eve in decades as the Arctic blast reaches its peak.

    About 1.2 million customers in the US are experiencing power outages amid the winter weather and frigid temperatures, according to the website PowerOutage.US. Maine, New Hampshire, New York, Virginia and Pennsylvania have the most outages.

    In pictures: Winter storm impacts the US


    In all, more than 200 million people in the US were under wind chill alerts from the Canadian border to the Mexican border and from Washington state to Florida, with below-zero wind chills expected in the Southeast by Friday. Other winter weather alerts are in effect for blizzard conditions, ice, snow as well as flooding.

    “The National Weather Service’s Watch Warning graphic depicts one of the greatest extents of winter weather warnings and advisories ever,” the agency said Thursday.

    Notably, parts of Montana, South Dakota and Wyoming have already seen wind chills below minus 50 degrees Fahrenheit in the past two days.

    The entire state of Texas was seeing temperatures below freezing by early Friday afternoon, according to weather observations from around the state.

    New York Gov. Kathy Hochul warned residents about the “epic, statewide hazard” of winter weather.

    “I called it a kitchen sink storm because it is throwing everything at us but the kitchen sink,” Hochul said at a press conference Friday afternoon. “We’ve had ice, flooding, snow, freezing temperatures, and everything that mother nature could wallop at us this weekend.”

    For Brian Trzeciak, the storm was “living up to the warnings” at his home in Hamburg, New York. Buffalo’s airport, just to the north, reported zero visibility shortly after noon on Friday.

    “Whiteout conditions, frigid temperatures, and the waves are like what you would see during a hurricane,” he told CNN.

    He and his family decided to cancel their Christmas plans because of the dangers from the storm.

    “My mother lives about 30 minutes away and so does my sister and her family, in the other direction,” he said. “We always get together for Christmas Eve and Christmas, but we’re all hunkering down in our houses until it all stops on Monday.”

    Driving bans are in place in Erie, Genesee, Niagara and Orleans counties in Western New York because of whiteout conditions.

    As many as 250 people could be stranded in their cars in Erie County in a situation that Buffalo Mayor Byron Brown said put first responders at unnecessary risk. Brown told CNN Friday night that forecasts call for 36 to 48 inches of snow. The area has had wind gusts of 79 mph.

    Many will experience a cold holiday unlike any other: Atlanta, Philadelphia, Pittsburgh and Tallahassee, Florida, are all forecast to have their coldest high temperature ever recorded on December 24, according to the National Weather Service.

    Washington DC is forecast to see its second coldest Christmas Eve, only behind 1989. In New York, it will be the coldest Christmas Eve since 1906. Chicago is expecting temperatures to rebound above zero, but will still experience its coldest Christmas Eve since 1983.

    Much of Florida will experience the peak of their cold on Christmas Day. It will be coldest Christmas Day since 1983 for Miami, Tampa, Orlando and West Palm Beach.

    On Friday, the storm unleashed more heavy snow and blizzard conditions, particularly in the Midwest.

    As it treks east across the country, the storm is expected to become a “bomb cyclone,” a rapidly strengthening storm which drops 24 millibars of pressure within 24 hours. The storm’s pressure was forecast to match that of a Category 2 hurricane as it moved into the Great Lakes on Friday morning.

    Governors in at least 13 states, including Georgia and North Carolina in the South, have implemented emergency measures to respond to the storm. Declarations of a state of emergency in several states have included the activation of National Guard units.

    More than 5,400 Friday flights have already been canceled as of 7:30 p.m. ET, after nearly 2,700 cancellations on Thursday, according to flight tracking site FlightAware.

    • It will remain very cold: Friday will bring record-low temperatures in large swaths of the US, including from the Lower Mississippi Valley, northeastward into the Tennessee and Ohio Valleys and stretching across large sections of the east from the Southeast, through the Southern to Central Appalachians and into the mid-Atlantic, according to the National Weather Service.

    • Dangerous wind chills: The plummeting temperatures will be accompanied by high winds, which will create dangerous wind chills across nearly all the central to eastern US.

    • Blizzard warnings: The Upper Midwest will see frigid temperatures, heavy snow and high winds. The warning applies to parts of Iowa, Minnesota, South Dakota, North Dakota and Michigan. Buffalo, New York, will go under a blizzard warning Friday morning. Such warnings go in effect when snow and wind of 35 mph will reduce visibility to less than a quarter of a mile for at least three hours.

    • Whiteout conditions: Blizzard conditions may exist even if snowfall stops, because high winds can pick up snow already on the ground and cause low visibility.

    A separate storm system is bringing heavy mixed precipitation to the Pacific Northwest on Friday.

    A winter storm warning is in effect for western Washington, including Seattle, until 7 p.m. PST Friday. Additional snowfall of up to 2 inches is possible and ice accumulations could reach a quarter of an inch. Precipitation will begin as snow and transition to sleet/freezing rain and then finally to rain. More power outages are likely and travel will be made very difficult.

    The ice caused the closure of runways at Seattle-Tacoma International Airport, where nearly half of flights going into and out of the airport were canceled, according to FlightAware. Further, all express services for Sound Transit, a regional transportation network in the Seattle metro area, were suspended Friday due to the icy conditions.

    A winter storm warning is also in effect for northeastern Oregon, including Portland, from 4 p.m. to 10 p.m. PST. Total snow and sleet accumulations of up to one inch and ice accumulations of .2 to .4 inches is likely as well as winds gusting to 55 mph. Wind chills as low as zero are possible, and frostbite is possible on exposed skin in as little as 30 minutes.

    One of the biggest dangers of the massive winter storm besides heavy snow and blizzard conditions is the rapid drop in temperatures over a short period of time. The air will continue to get and feel colder, especially during night hours.

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  • The US economy grew much faster than previously thought in the third quarter | CNN Business

    The US economy grew much faster than previously thought in the third quarter | CNN Business

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    New York
    CNN
     — 

    America’s economy grew much faster than previously thought in the third quarter, a sign that the Federal Reserve’s battle to cool the economy to fight inflation t is having only limited impact.

    The Commerce Department’s final reading Thursday morning showed gross domestic product, the broadest measure of the US economy, grew at an annual pace of 3.2% between July and September. That was above the 2.9% estimate from a month ago. Economists surveyed by Refinitiv had expected GDP to stay unchanged from its previous reading.

    The report said the stronger-than-expected reading was due to increases in exports and consumer spending that were partly offset by a decrease in spending on new housing. Consumer spending is responsible for more than two-thirds of the nation’s economic activity.

    The Fed has been raising interest rates throughout the year to cool demand for goods and services and reduce inflation. Economists have been worried for quite some time that the Fed’s actions could tip the US economy into recession next year.

    Inflation has cooled in recent readings, but the US economy has stayed strong. Some surveys released this week suggest the Fed’s higher rates are not slowing spending by businesses or consumers.

    A recent survey of chief financial officers found the current level of interest rates have not impacted their spending plans. And consumer confidence improved in December according to a survey by the Conference Board, reaching the highest level since April.

    In addition, employers have continued to hire at a historically strong pace, although layoffs have increased in some industries, especially technology.

    A separate Labor Department report Thursday showed that unemployment claims remained relatively unchanged.

    Initial weekly claims for unemployment insurance benefits ticked up to 216,000 for the week ended, December 17. The previous week’s total was upwardly revised by 3,000 to 214,000.

    Economists were expecting initial claims to land at 222,000, according to Refinitiv.

    The weekly initial claims totals are hovering around pre-pandemic levels. In 2019, weekly claims averaged 218,000.

    Continuing claims, which include people who are collecting benefits on an ongoing basis, dropped slightly to 1.672 million for the week ended December 10. The prior week’s number of continuing claims were revised up to 1.678 million.

    The final GDP report is one of most backward-looking readings the government releases, looking at the state of the economy nearly three months ago. The current forecast from economists is that growth in the current period will be only 2.4%, significantly slower than Thursday’s reading.

    Still, Wall Street was concerned that the GDP report could give the Fed more runway to raise rates. Stocks fell modestly Thursday. Dow futures were 200 points, or 0.6% lower. S&P 500 futures fell 0.8%.

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  • Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

    Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

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    CNN
     — 

    Senate leaders unveiled a $1.7 trillion year-long federal government funding bill early Tuesday morning.

    The legislation includes $772.5 billion for non-defense discretionary programs and $858 billion in defense funding, according to a bill summary from Democratic Sen. Patrick Leahy, chair of the Senate Committee on Appropriations.

    The sweeping package includes roughly $45 billion in emergency assistance to Ukraine and NATO allies, boosts in spending for disaster aid, college access, child care, mental health and food assistance, more support for the military and veterans and additional funds for the US Capitol Police, according to Leahy’s summary and one from Sen. Richard Shelby of Alabama, the top Republican on the Senate Appropriations Committee.

    However, the bill, which runs more than 4,000 pages, left out several measures that some lawmakers had fought to include. An expansion of the child tax credit, as well as multiple other corporate and individual tax breaks, did not make it into the final bill. Neither did legislation to allow cannabis companies to bank their cash reserves – known as the Safe Banking Act. Also, there was also no final resolution on where the new FBI headquarters will be located.

    The spending bill is the product of lengthy negotiations between top congressional Democrats and Republicans. Lawmakers reached a “bipartisan, bicameral framework” last week following a dispute between the two parties over how much money should be spent on non-defense domestic priorities. They worked through the weekend to craft the legislation.

    The Senate is expected to vote first to approve the deal this week and then send it to the House for approval before government funding runs out on December 23. The bill would keep the government operating through September, the end of the fiscal year.

    Congress originally passed a continuing resolution on September 30 to temporarily fund the government in fiscal year 2023, which began October 1.

    More aid for Ukraine: The spending bill would provide roughly $45 billion to help support Ukraine’s efforts to defend itself against Russia’s attack.

    About $9 billion of the funding would go to Ukraine’s military to pay for a variety of things including training, weapons, logistics support and salaries. Nearly $12 billion would be used to replenish US stocks of equipment sent to Ukraine through presidential drawdown authority.

    Also, it would provide $13 billion for economic support to the Ukrainian government.

    Other funds would address humanitarian and infrastructure needs, as well as support European Command operations.

    Emergency disaster assistance: The bill would appropriate more than $38 billion in emergency funding to help Americans in the west and southeast affected by recent natural disasters, including tornadoes, hurricanes, flooding and wildfires. It would aid farmers, provide economic development assistance for communities, repair and reconstruct federal facilities and direct money to the Federal Emergency Management Agency’s Disaster Relief Fund, among other initiatives.

    Overhaul of the electoral vote counting law: A provision in the legislation aims at making it harder to overturn a certified presidential election, in a direct response to the January 6 attack on the US Capitol.

    The changes would overhaul the 1887 Electoral Count Act, which then-President Donald Trump tried to use to overturn the 2020 election.

    The legislation would clarify the vice president’s role while overseeing the certification of the electoral result to be completely ceremonial. It also would create a set of stipulations designed to make it harder for there to be any confusion over the accurate slate of electors from each state.

    Higher maximum Pell grant awards: The bill would increase the maximum Pell grant award by $500 to $7,395 for the coming school year. This would be the largest boost since the 2009-2010 school year. About 7 million students, many from lower-income families, receive Pell grants every year to help them afford college.

    Increased support for the military and veterans: The package would fund a 4.6% pay raise for troops and a 22.4% increase in support for Veteran Administration medical care, which provides health services for 7.3 million veterans.

    It would include nearly $53 billion to address higher inflation and $2.7 billion – a 25% increase – to support critical services and housing assistance for veterans and their families.

    The bill also would allocate $5 billion for the Cost of War Toxic Exposures Fund, which provides additional funding to implement the landmark PACT Act that expands eligibility for health care services and benefits to veterans with conditions related to toxic exposure during their service.

    Beefing up nutrition assistance: The legislation would establish a permanent nationwide Summer EBT program, starting in the summer of 2024, according to Share Our Strength, an anti-hunger advocacy group. It would provide families whose children are eligible for free or reduced-price school meal with a $40 grocery benefit per child per month, indexed to inflation.

    It would also change the rules governing summer meals programs in rural areas. Children would be able to take home or receive delivery of up to 10 days worth of meals, rather than have to consume the food at a specific site and time.

    The bill would also help families who have had their food stamp benefits stolen since October 1 through what’s known as “SNAP skimming.” It would provide them with retroactive federal reimbursement of the funds, which criminals steal by attaching devices to point-of-sale machines or PIN pads to get card numbers and other information from electronic benefits transfer cards.

    More money for child care: The legislation would provide $8 billion for the Child Care and Development Block Grant, a 30% increase in funding. The grant gives financial assistance to low-income families to afford child care.

    Also, Head Start would receive nearly $12 billion, an 8.6% boost. The program helps young children from low-income families prepare for school.

    Help to pay utility bills: The bill would provide $5 billion for the Low Income Home Energy Assistance Program. Combined with the $1 billion contained in the earlier continuing resolution, this would be the largest regular appropriation for the program, according to the National Energy Assistance Directors Association. Home heating and cooling costs – and the applications for federal aid in paying the bills – have soared this year.

    Enhance retirement savings: The bill contains new retirement rules that could make it easier for Americans to accumulate retirement savings – and less costly to withdraw them. Among other things, the provisions would allow penalty-free withdrawals for some emergency expenses, let employers offer matching retirement contributions for a worker’s student loan payments and increase how much older workers may save in employer retirement plans.

    More support for the environment: The package would provide an additional $576 million for the Environmental Protection Agency, bringing its funding up to $10.1 billion. It would increase support for enforcement and compliance, as well as clean air, water and toxic chemical programs, after years of flat funding.

    It also would boost funding for the National Park Service by 6.4%, restoring 500 of the 3,000 staff positions lost over the past decade. This would be intended to help the agency handle substantial increases in visitation.

    Plus, the legislation would provide an additional 14% in funding for wildland firefighting.

    Additional funding for the US Capitol Police: The bill would provide an additional $132 million for the Capitol Police for a total of nearly $735 million. It would allow the department to hire up to 137 sworn officers and 123 support and civilian personnel, bringing the force to a projected level of 2,126 sworn officers and 567 civilians.

    It would also give $2 million to provide off-campus security for lawmakers in response to evolving and growing threats.

    Investments in homelessness prevention and affordable housing: The legislation would provide $3.6 billion for homeless assistance grants, a 13% increase. It would serve more than 1 million people experiencing homelessness.

    The package also would funnel nearly $6.4 billion to the Community Development Block Grant formula program and related local economic and community development projects that benefit low- and moderate income areas and people, an increase of almost $1.6 billion.

    Plus, it would provide $1.5 billion for the HOME Investment Partnerships Program, which would lead to the construction of nearly 10,000 new rental and homebuyer units and maintain the record investment from the last fiscal year.

    Increased health care funding: The package would provide more money for National Institutes of Health, the Centers for Disease Control and Prevention and the Assistant Secretary for Preparedness and Response. The funds are intended to speed the development of new therapies, diagnostics and preventive measures, beef up public health activities and strengthen the nation’s biosecurity by accelerating development of medical countermeasures for pandemic threats and fortifying stockpiles and supply chains for drugs, masks and other supplies.

    More resources for children’s mental health and for substance abuse: The bill would provide more funds to increase access to mental health services for children and schools. It also would invest more money to address the opioid epidemic and substance use disorder.

    Tiktok ban from federal devices: The legislation would ban TikTok, the Chinese-owned short-form video app, from federal government devices.

    Some lawmakers have raised bipartisan concerns that China’s national security laws could force TikTok – or its parent, ByteDance – to hand over the personal data of its US users. Recently, a wave of states led by Republican governors have introduced state-level restrictions on the use of TikTok on government-owned devices.

    Enhanced child tax credit: A coalition of Democratic lawmakers and consumer advocates pushed hard to extend at least one provision of the enhanced child tax credit, which was in effect last year thanks to the Democrats’ $1.9 trillion American Rescue Plan. Their priority was to make the credit more refundable so more of the lowest-income families can qualify. Nearly 19 million kids won’t receive the full $2,000 benefit this year because their parents earn too little, according to a Tax Policy Center estimate.

    New cannabis banking rules: Lawmakers considered including a provision in the spending bill that would make it easier for licensed cannabis businesses to accept credit cards – but it was left out of the legislation. Known as the Safe Banking Act, which previously passed the House, the provision would prohibit federal regulators from taking punitive measures against banks for providing services to legitimate cannabis businesses.

    Even though 47 states have legalized some form of marijuana, cannabis remains illegal on the federal level. That means financial institutions providing banking services to cannabis businesses are subject to criminal prosecution – leaving many legal growers and sellers locked out of the banking system.

    FBI headquarters: There was also no final resolution on where the new FBI headquarters will be located, a major point of contention as lawmakers from Maryland – namely House Majority Leader Steny Hoyer – pushed to bring the law enforcement agency into their state. In a deal worked through by Senate Majority Leader Chuck Schumer, the General Services Administration would be required to conduct “separate and detailed consultations” with Maryland and Virginia representatives about potential sites in each of the states, according to a Senate Democratic aide.

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  • Housing slump likely to continue but some see hopeful signs ahead | CNN Business

    Housing slump likely to continue but some see hopeful signs ahead | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Mortgage rates have ticked down recently, but are still up dramatically from a year ago thanks to the surge in long-term bond yields as the Federal Reserve hiked interest rates.

    While that’s already had a negative impact on the housing market, we’ll get more details this week about how much worse the damage has become.

    A long list of housing data is on tap. On Tuesday the US Census Bureau will report housing starts and building permits figures for November, followed by Friday’s release of new home sales data for the same month. In between that will be the November existing home sales numbers from the National Association of Realtors on Wednesday, as well as weekly data on mortgage rates and applications on Thursday.

    For the past few months, existing and new home sales have been steadily declining because of the spike in rates and the fact that home prices remain stubbornly high for first-time buyers. Housing starts and building permits have been choppier on a month-to-month basis, but those figures are both down from a year ago.

    Still, there are some promising signs that the worst could soon be over. Shares of Lennar

    (LEN)    , one of the largest homebuilders in the US, rallied after reporting earnings last week. Revenue topped forecasts and the company’s guidance for the number of homes it expected to deliver next year was a little higher than analysts’ estimates as well.

    Lennar investors “may be looking ahead to 2023, perhaps crossing the valley from recession to potential recovery,” according to CFRA Research analyst Kenneth Leon.

    Others in the industry are cautiously optimistic as well.

    According to data from Amherst Group, an investment firm that buys single-family homes to rent out, it’s important to put the recent slide in prices in context.

    Amherst said home prices are still up about 40% from pre-pandemic levels. So even a further drop of about 15% would merely bring them to mid-2021 levels. In other words, this isn’t like the mid-2000s real estate bubble bursting.

    It’s also worth noting that the job market is still strong and wages are growing. What’s more, many consumers still have decent levels of excess savings thanks to pandemic era government stimulus.

    That all amounts to a few good reasons why the housing market could avoid a severe and prolonged slump.

    “The U.S. housing market is still supported by a tight labor market, the lock-in effect of low fixed mortgage rates for existing homeowners, tight mortgage underwriting, low leverage in the mortgage sector, and low housing supply,” said Brandywine fixed-income analyst Tracy Chen in a report this month.

    “We believe we can avoid a severe housing downturn like the one in the Global Financial Crisis,” Chen added.

    Others point out that even though housing sales may remain weak due to high home prices and still elevated mortgage rates, the good news is that most existing homeowners are still paying their monthly mortgage on time.

    Again, that’s a stark contrast from 2008 when many people with subprime loans or borrowers with poor credit histories were unable to keep up with their mortgage payments.

    “Housing is not bringing down the economy. Yes, the housing market has been impacted. But mortgage delinquencies are still low,” said Gene Goldman, chief investment officer at Cetera Investment Management.

    There aren’t a ton of companies reporting their latest earnings this week. But the few that are could give more clues about the financial health of consumers and the state of corporate spending.

    Cereal giant General Mills

    (GIS)     will release earnings on Tuesday. Analysts are expecting a slight increase in both sales and profit. Consumers may be growing increasingly wary about inflation and the broader economy, but they’re still eating their Wheaties. Shares of General Mills

    (GIS)     have soared nearly 30% this year.

    Analysts are less optimistic about the outlooks for sneaker king and Dow component Nike

    (NKE)    , used car retailer CarMax

    (KMX)     and memory chip maker Micron

    (MU)    , whose semiconductors are used in devices ranging from cell phones and computers to cars.

    Earnings are expected to decline for these three companies. They won’t be the only leaders of Corporate America to report weak results.

    According to data from FactSet, fourth-quarter earnings for S&P 500 companies are expected to decline 2.8% from a year ago. Analysts have been busy cutting their forecasts too. John Butters, senior earnings analyst at FactSet, noted in a report that fourth-quarter profits were expected to rise 3.7% as recently as September 30.

    Investors are also going to be paying very close attention to what companies say in their earnings reports about their outlooks for 2023. Analysts currently are anticipating earnings growth of 5.3% for 2023. That could be too optimistic… especially if companies start cutting their own forecasts due to worries about the broader economy.

    “Odds of a recession are pretty high,” said Vincent Reinhart, chief economist and macro strategist at Dreyfus & Mellon. “That will have a knock-on effect for corporate earnings. Higher rates and weaker earnings suggest more pain for stocks.”

    Monday: Germany Ifo business climate index

    Tuesday: US housing starts and building permits; China sets loan prime rate; Bank of Japan interest rate decision; earnings from General Mills, Nike, FedEx

    (FDX)     and Blackberry

    (BB)

    Wednesday: US existing home sales; Germany consumer confidence; earnings from Rite Aid

    (RAD)    , Carnival

    (CCL)    , Cintas

    (CTAS)    , Toro

    (TTC)     and Micron

    Thursday: US weekly jobless claims; US Q3 GDP (third estimate); earnings from CarMax

    (KMX)     and Paychex

    Friday: US personal income and spending; US PCE inflation; US new home sales; US durable goods orders; US U. of Michigan consumer sentiment; Japan inflation; UK markets close early

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  • Why stocks keep tumbling: Good news and bad news are bad | CNN Business

    Why stocks keep tumbling: Good news and bad news are bad | CNN Business

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    New York
    CNN
     — 

    The good vibes on Wall Street are fading fast: US stocks tumbled yet again Friday as investors come to grips with a souring economy.

    Dow futures were down 400 points, or 1.3%. S&P 500 futures fell 1.4%, and Nasdaq Composite futures were 1.1% lower.

    CNN Business’ Fear and Greed Index, a measure of market sentiment, dipped perilously close to “Fear” Friday. The market had been in “Greed” mode for weeks.

    Stocks had been riding high this month on weaker-than-expected inflation and a number of stronger-than-expected reports on the broad economy and the job market. Investors were hopeful that the Federal Reserve could slow its historic pace of rate hikes and inflation could right itself sometime next year without tipping the economy into a recession.

    That excitement continued right up until Fed Chair Jerome Powell crashed Wall Street’s party Wednesday with some tough news: Economists at the Fed believe US gross domestic product, the broadest measure of America’s economy will barely grow next year. And they predict the US unemployment rate will rise to 4.6% by the end of 2023, which means roughly 1.6 million more Americans will be out of work.

    Compounding fears from those dour Fed forecasts was a worse-than-expected retail sales report Thursday that sent stocks plunging. The Dow lost 765 points Thursday, or 2.3%, the index’s worst day in three months. The S&P 500 lost 2.5% and the Nasdaq tumbled 3.2%, their worst days in a month.

    Now, economists at Moody’s Analytics predict America’s economy will grow at an annualized rate of just 1.9% in the fourth quarter, down from its previous estimate of 2.7%. Weak manufacturing and retail reports spooked Moody’s analysts, who also lowered their 2023 GDP forecast to just 0.9%, much lower than 2022’s 1.9% estimate.

    “This leaves little room for anything to go wrong,” Moody’s economist Matt Colyar wrote in an analysis.

    Sentiment on Wall Street can change on a dime, and this week is clear evidence of that: The Dow has tumbled about 1,100 points, or 3.4%, since the Fed’s policy update at 2 p.m. ET Wednesday, and the market hasn’t even opened yet Friday. Not helping stocks: It’s December. Many traders are on vacation, volume is low and tiny moves can get exacerbated.

    But, as my colleague Matt Egan notes, the market may be in a lose-lose situation. Good economic news has been bad news for investors, because the Fed is trying to cool down the economy as part of its inflation-fighting campaign. But bad economic news is also bad for investors – and everyone – because it raises the risk of a recession.

    – CNN’s Matt Egan contributed to this report

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  • The Grinch comes for retailers | CNN Business

    The Grinch comes for retailers | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Weaker-than-expected retail sales in November pummeled market sentiment on Thursday and raised the odds that the Federal Reserve’s inflation-fighting interest rate hikes would push the economy into recession.

    What’s happening: US retail sales, which measure the total amount of money that stores make from selling goods to customers, fell 0.6% in November, the weakest performance in nearly a year. The drop concerned economists who had expected monthly sales to shrink by just 0.1%. It’s also a sharp reversal from October’s sales increase of 1.3%.

    That’s a bad sign for the economy. Just last month Bank of America CEO Brian Moynihan told CNN that the continued strength of the US consumer is nearly single-handedly staving off recession. Consumer spending is a major driver of the economy, and the last two months of the year can account for about 20% of total retail sales — even more for some retailers, according to National Retail Federation data.

    Market mania: The weak report means that spending faltered just as the holiday season started, a critical time for retailers to ramp up profits and get rid of excess inventory. Investors weren’t too happy about that.

    Shares of Costco

    (COST)     closed Thursday 4.1% lower, Target

    (CBDY)     fell by 3.2%, Macy’s

    (M)     dropped 3.5% and Abercrombie & Fitch

    (ANF)     was down 6.2%.

    The entire sector took a blow — the VanEck Retail ETF, with Amazon

    (AMZN)    , Home Depot

    (HD)     and Walmart

    (WMT)    as its top three holdings, fell by 2.2%. The SPDR S&P Retail ETF, which follows all S&P retail stocks, was down 2.9%.

    Weak sales are likely to continue, say analysts, and if they do, then retailers’ bottom lines and fourth-quarter earnings will suffer.

    “The headwinds of the past year are catching up to consumers and forcing them to be more conservative in their holiday shopping this winter,” warned Morgan Stanley economist Ellen Zentner in a note.

    The Fed factor: November’s report could indicate that consumers are feeling the double-punch of sky-high inflation and painful interest rate hikes from the central bank. This retail sales data adds to recessionary concerns, as it suggests that consumers may be becoming more cautious with their spending.

    “Households are increasingly relying on their savings to sustain their spending, and many families are resorting to credit to offset the burden of high prices. These trends are unsustainable, and the current credit splurge is a true risk, especially for families at the lower end of the income spectrum,” said Gregory Daco and Lydia Boussour, economists at EY Parthenon.

    While American bank accounts are still fairly robust, they’re beginning to dwindle. In the third quarter of 2022, credit card balances jumped 15% year over year. That’s the largest annual jump since the New York Fed began keeping track of the data in 2004.

    “Against this backdrop, we expect consumers will rein in their spending further in coming months,” said Daco and Boussour. “Real consumer spending should see modest growth in the final quarter of the year, but we expect it will barely grow in 2023.”

    Bottom line: If Bank of America’s Moynihan was right, the US economy is in trouble.

    US mortgage rates came in lower once again this week, marking the fifth consecutive drop in a row.

    The 30-year fixed-rate mortgage averaged 6.31% in the week ending December 15, down from 6.33% the week before, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.12%, reports my colleague Anna Bahney.

    That’s a sharp reversal from the upward trend in rates we’ve seen for most of 2022. Those increases were spurred by the Federal Reserve’s unprecedented campaign of harsh interest rate hikes to tame soaring inflation. But mortgage rates have tumbled in the last several weeks, following data that showed inflation may have finally reached its peak.

    The Fed announced on Wednesday that it will continue to raise interest rates — albeit by a smaller amount than it has been.

    “Mortgage rates continued their downward trajectory this week, as softer inflation data and a modest shift in the Federal Reserve’s monetary policy reverberated through the economy,” said Sam Khater, Freddie Mac’s chief economist.

    “The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand,” he added. “The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high.”

    American regulators have been granted unprecedented access to the full audits of Chinese companies like Alibaba

    (BABA)     and JD.com

    (JD)     after threatening to kick the tech giants off US stock exchanges if they did not receive the data.

    The announcement marks a major breakthrough in a yearslong standoff over how Chinese companies listed on Wall Street should be regulated. It will come as a huge relief for these firms and investors who have invested billions of dollars in them, reports my colleague Laura He.

    “For the first time in history, we are able to perform full and thorough inspections and investigations to root out potential problems and hold firms accountable to fix them,” Erica Williams, chair of the Public Company Accounting Oversight Board, said in a statement Thursday, adding that such access was “historic and unprecedented.”

    More than 100 Chinese companies had been identified by the US securities regulator as facing delisting in 2024 if they did not hand over the audits of their financial statements.

    On Friday, China’s securities regulator said it’s looking forward to working with US officials to continue promoting future audit supervision of companies listed in the United States.

    There are more than 260 Chinese companies listed on US stock exchanges, with a combined market capitalization of more than $770 billion, according to recent calculations posted by the US-China Economic and Security Review Commission.

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  • Delisting risks for China tech stocks averted as US gets ‘historic’ access to audit data | CNN Business

    Delisting risks for China tech stocks averted as US gets ‘historic’ access to audit data | CNN Business

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    Hong Kong
    CNN
     — 

    US regulators have gained full access to the audits of Chinese companies for the first time, reducing the threat that tech giants such as Alibaba

    (BABA)     and JD.com

    (JD)     could be kicked off US stock exchanges.

    The announcement marks a major breakthrough in a yearslong standoff over how Chinese companies listed on Wall Street should be regulated. It will come as a huge relief for these firms and investors who have invested billions of dollars in them.

    “For the first time in history, we are able to perform full and thorough inspections and investigations to root out potential problems and hold firms accountable to fix them,” Erica Williams, chair of the Public Company Accounting Oversight Board (PCAOB), said in a statement Thursday, adding that such access was “historic and unprecedented.”

    More than 100 Chinese companies — including Alibaba, JD.com, and Baidu — had been identified by the US securities regulator as facing delisting in 2024 if they did not hand over the audits of their financial statements.

    On Friday, China’s securities regulator said it’s looking forward to working with US officials to continue promoting future audit supervision of companies listed in the United States.

    “We have always advocated solving issues of audit supervision on cross-border listings through regulatory cooperation mechanisms,” the China Securities Regulatory Commission said in a statement.

    There are more than 260 Chinese companies listed on US stock exchanges, with a combined market capitalization of more than $770 billion, according to recent calculations posted by the US-China Economic and Security Review Commission.

    But investors often face a lack of transparency when it comes to Chinese stocks. US regulators have been long demanding access to the books of these companies, but Beijing had resisted such scrutiny, citing national security concerns.

    The United States had increased pressure by passing a law in December 2020 requiring Chinese companies listed in the US to open their books to audit watchdogs. If they failed to comply with the requirements for three straight years, they would be delisted.

    In August, China finally agreed to let US officials inspect the audit work of these firms.

    In Friday’s statement, the PCAOB said it had inspected the audits of eight Chinese companies completed by KPMG Huazhen LLP in China and PricewaterhouseCoopers in Hong Kong. The board will finalize the inspection reports and make them public as early as next year.

    “This is the beginning of our work to inspect and investigate firms in China, not the end,” Williams said in the statement.

    She added that the watchdog is continuing to demand complete access in mainland China and Hong Kong moving forward.

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  • ‘This is a war’: Californians seek affordable housing alternatives | CNN Business

    ‘This is a war’: Californians seek affordable housing alternatives | CNN Business

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    Los Angeles
    CNN
     — 

    At 26, Ixchel Hernandez has become the defender and protector of her family’s modest apartment. In the two decades they’ve lived in their Los Angeles home, the family of four has successfully fought against multiple attempts aimed at pricing and, ultimately, forcing them out.

    “We are human beings with the right to live in our home, and that’s just frankly what every person… in every home and [in] every building should know … they have the right to have their own space, to have their home,” Hernandez said.

    But, across the country, affordable housing is becoming increasingly rare to find. The lack of housing inventory coupled with inflation and zoning inequalities have priced out most families, especially those who start with little-to-no capital of their own.

    Ixchel’s parents moved to the United States from Mexico in hopes of giving her and her brother opportunities and a safe environment. Her father, Jose Hernandez, never wanted to give the family’s various landlords a reason to evict them over the years, and he dreamed of owning his own home one day.

    “Thank God we never failed to pay our rent,” he said. But in order to keep up with rising rents, both parents worked and even opened up their home to another family for a brief time. Ixchel remembers six people crammed into their one-bedroom apartment.

    “It shouldn’t have to be that way where you’re kind of fighting for space or you’re going to have to move so far out of LA to be able to have a home,” she said.

    To purchase a house in more than 75% of the nation’s most populous cities, an average family needs to spend at least 30% of their annual income on housing. In cities like Miami, New York and Los Angeles, that number surges to more than 80% of an average family’s annual income.

    Home ownership for the Hernandez family, and so many others, has felt like a fading American dream. That is until they discovered a Civil Rights era approach that helps promote home ownership, particularly among minority groups, who are disproportionately impacted by the affordable housing crisis. It’s called a Community Land Trust, or CLT.

    The Hernandez family at their home.

    “We’re operated by residents who actually live in our building… [as well as] folks from the communities that we’re serving,” said Kasey Ventura of the Beverly-Vermont Community Land Trust. “My interest in this work, outside of just preserving housing and affordable housing, is preserving culture in a community.”

    A CLT is essentially a nonprofit organization that buys the land on which a building sits, thereby allowing a community’s residents to collectively manage it. Some residents eventually choose to form a co-op with their neighbors and take ownership of their buildings, renting the land.

    The Hernandez family and their neighbors embraced the concept. This year they joined the Beverly-Vermont CLT, one of at least five in Los Angeles and more than 200 nationwide. The process requires neighbors to meet regularly over several months before ultimately unanimously agreeing on various terms so as to finalize the trust. Ixchel now sits on the board of her building’s management; it’s in the final stages of ownership transfer to the co-op.

    “What’s important is that we’re now owners!” said Ixchel’s mother, Guadalupe Santiago. “But it’s also important to remember it was not easy,” her father cautioned.

    “It may not seem like a lot to a lot of folks that have money or come from money,” Ixchel said. “[But] we are just as much trying to build that generational wealth.”

    According to 2019 figures, the United States was roughly 3.8 million homes short of what was needed to house families. That is more than double the number from a decade earlier. California has the largest housing deficit of any other state, requiring an estimated million more homes to meet housing demands.

    “We don’t necessarily view housing as a need that everybody should have. And that’s key… in this work,” said Kasey Ventura, who helps run the Beverly-Vermont Community Land Trust in Los Angeles.

    While CLTs are a solution, Ventura admits there are — and should be — other affordable housing options to adequately address the crisis.

    In Southern California, there is growing demand for construction and rental of ADUs, or Accessory Dwelling Units. Also called “carriage homes,” the converted garages or newly built smaller structures sit adjacent to existing homes and are on the same property. The mostly studio or one-bedroom apartments provide a more affordable option to many who prefer to live or work in areas that might otherwise be too expensive.

    Others have advocated for utilizing unoccupied homes. There are dozens of vacant houses, in some cases, sitting just a few blocks from several homeless encampments lining many Los Angeles sidewalks. However, efforts to transform them into affordable housing in some neighborhoods have proven controversial among existing homeowners.

    Another route undertaken by some companies is Employer-Assisted Housing. Although they have only finished a portion of what they initially pledged, in recent years corporations like Google, Meta and Apple have promised to spend billions of dollars on some 40,000 new homes in California. The initiative began in order to combat soaring home prices in the Bay Area, while also recruiting and retaining talent who needed more affordable housing options, along with a shorter commute to the office.

    “Just to be able to be like, ‘Okay, I’m gonna wake up, take a walk down the street and come to work.’ I mean that’s awesome!” said Matthew Johnson, an employee of Factory_OS in Vallejo, California, which already plans to provide workforce housing options to its workers in the coming years. However, unlike other companies, Factory_OS employees will build their own homes.

    In a space once used to build US Navy submarines during World War II, Larry Pace now operates Factory_OS outside San Francisco. He co-founded the company with Rick Holliday to address the worsening housing shortage.

    Matthew Johnson working at Factory_OS.

    “That we’ve repurposed a building that was once for instruments of war, [so as] to [now] create affordable and supportive housing…. I don’t know how much cooler that can be,” said Pace.

    Factory_OS puts homebuilding onto an assembly line and produces fully finished modular units within two weeks. From insulation and drywall to flooring, fixtures and paint, all of it is prefabricated within the confines of the factory before it’s trucked to a site for assembly.

    “We’ve created an IKEA for the manufacturing of homes,” said Pace. “Then we put the pieces together.”

    When hoisted by a crane and stacked like sophisticated Legos, the modular units combine to make entire apartment buildings. Pace maintains there are massive cost-savings and huge efficiencies in moving homebuilding into a factory setting compared with on-site construction.

    “We’re building houses for the people who need them, for the people who have been struggling to be able to support their families or pay rent or pay bills,” said Johnson, as he placed support beams for a roof of one of the units.

    The 38-year-old Factory_OS employee and father of five was once homeless, and he said he often thinks about the families who will one day live under the roof he’s assembling. w

    “Every morning I wake up, I’m grateful… that I come home from work and there are my kids waiting for me,” said Johnson.

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  • Tornadoes leave a trail of destruction in Louisiana and the Southeast, killing at least 3, collapsing homes and knocking out power | CNN

    Tornadoes leave a trail of destruction in Louisiana and the Southeast, killing at least 3, collapsing homes and knocking out power | CNN

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    CNN
     — 

    A severe weather system cutting through the South has left a trail of destruction in Louisiana, killing at least three people and injuring dozens of others as violent tornadoes touched down, collapsing homes, turning debris into projectiles and knocking out power.

    The deaths attributed to storm-related events include a 56-year-old woman who died after a tornado hit her home in the Killona area in St. Charles Parish, according to the Louisiana Department of Health.

    Additionally, a boy and his mother were found dead after a tornado destroyed their home Tuesday in the northwestern Louisiana community of Keithville, the Caddo Parish Sheriff’s Office said. The mother and son’s bodies were found hours apart, far from where their house once stood, officials said.

    Multiple communities throughout Louisiana reported destruction, with roofs ripped off, homes splintered, debris littering roadways and cars flipper over. As ferocious winds downed power lines, more than 50,000 customers were left without power in across Louisiana and Mississippi Wednesday evening, according to PowerOutage.us. That number was down to less than 15,000 early Thursday.

    There were at least 49 tornado reports across Louisiana, Mississippi, Texas, Alabama and Florida Tuesday and Wednesday, according to the Storm Prediction Center. More tornado reports are likely to come in as surveyors continue to check for damage.

    And the threat isn’t over yet. More than 15 million people could see severe weather Thursday in parts of Florida, Georgia and the Carolinas as the severe weather shifts the east, according to CNN Meteorologist Robert Shackelford.

    More than 1.5 million people were under tornado watches in southeastern Alabama, northern Florida and southern Georgia until 9 a.m. Thursday. Strong tornadoes are still likely as well as quarter sized hail and powerful wind gusts up to 70 mph.

    The massive storm that brought the destruction to Louisiana and across the Southeast is part of a massive system that has also brought blizzard conditions in northern parts of the central US.

    For Thursday, the storms are expected to weaken slightly, but there is a risk for severe weather for much of Florida, coastal Georgia and coastal Carolinas. Cities like Tampa, Orlando, Jacksonville, Savannah and Charleston could see damaging winds, large hail and isolated tornadoes, Shackelford said.

    In Louisiana, the damage has been widespread, affecting multiple communities, prompting Gov. John Bel Edwards to declare a state of emergency.

    As many as 5,000 structures were likely damaged when a tornado struck the city of Gretna, across the Mississippi River from New Orleans, Mayor Belinda Constant said.

    Farther north, at least 20 people were injured in the small Union Parish town of Farmerville when a tornado struck Tuesday night, demolishing parts of an apartment complex and a mobile home park, Farmerville police Detective Cade Nolan said.

    Patsy Andrews was home with her children in Farmerville when she heard “rushing wind like a train” outside, she told CNN affiliate KNOE-TV.

    Her son told her not to open the door when she went to investigate, but it was too late.

    “All of a sudden that wind was so heavy, it broke my back door,” Andrews said. “The lights went off and all we could hear was glass popping everywhere.”

    She said she and her daughter hit the floor, crawling into a hallway as glass shattered around them and water leaked through the roof. They ended up taking shelter in their bathroom.

    “We just got in the tub and we hugged each other. We just kept praying and I just kept calling on Jesus,” Andrews said. Her family survived the storm but were left with damage to their home.

    In the Algiers area of New Orleans, four residents were taken to area hospitals as the storm battered the area on the west bank of the Mississippi River, Collin Arnold, director of the New Orleans Office of Homeland Security and Emergency Preparedness told CNN. At least one house collapsed in the area and other residences and businesses have been impacted, Arnold added.

    Officials in St. Bernard Parish also reported “major damage” in Arabi, where a tornado touched down, they said, leaving much of the area without power.

    Crews in Arabi will be conducting search and rescue efforts throughout the night, St. Bernard Parish Sheriff James Pohlmann said. Ten people have been rescued due to severe weather, but no serious injuries or deaths have been reported, Pohlmann added.

    Cindy DeLucca Hernandez thought she could beat the storm while driving home after picking up her 16-year-old son from school. But on the journey, she found herself facing a tornado.

    “It was extremely scary, I’ve never ever been through anything like that,” Hernandez said.

    Video she shared with CNN shows her waiting at red light as a tornado blew through Arabi, kicking up debris and taking out power lines.

    “We started seeing debris and we got hit a couple of times by it and that’s when I put the car in reverse,” she said. Hernandez and her son made it home safe.

    Jefferson Parish Councilman Scott Walker said he saw at least a mile-long path of debris.

    “Power lines down, homes severely damaged, rooftops ripped off,” he said in a video shared online describing the scene. “It is an extensive damage scene and a long path of destruction here on the west bank.”

    Two schools in Jefferson Parish suffered storm damage and were expected to stay closed Thursday.

    Iberia Medical Center “sustained a significant amount of damage,” police Capt. Leland Laseter said on Facebook. CNN has sought comment from the medical center.

    The New Iberia Police Department reported on Facebook that two tornadoes touched down in the city, with several homes damaged and reports of people trapped in the Southport Subdivision.

    Storm damage in Blue Ridge, Texas, on December 13, 2022.

    The storm also left damage behind in Texas and Oklahoma as it moved through the south earlier this week, spawning tornadoes.

    In Texas, at least seven people were injured Tuesday in the Dallas-Fort Worth area – including at least five hurt around the city of Grapevine. Two tornado reports were made in Grapevine, where police said a mall and other businesses were damaged.

    An EF2 tornado struck Wise County near the communities of Paradise and Decatur, damaging homes and businesses, officials said. Video showed homes splintered, with roofs ripped off in Decatur.

    In Wayne, Oklahoma, an EF2 tornado damaged homes, outbuildings and barns early Tuesday, officials said. No injuries were reported but homes were flattened or had roofs torn off, video from CNN affiliate KOCO shows.

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