A1 A1
Health
Congress set to prohibit sales of tobacco products to anyone under 21

Sales of tobacco products to anyone under 21 would be banned under a year-end congressional spending bill likely to pass this week, congressional staffers said on Monday.

The measure, which would include cigarettes and e-cigarettes, has bipartisan support and was introduced in May by Senate Majority Leader Mitch McConnell, R-Ky., and Sen. Tim Kaine, D-Va. In November, President Donald Trump told reporters he supported an increase in the tobacco buying age to 21 from the current 18.

Public health advocates praised the move, saying it would help reduce kids' access to vaping products. But they stressed much more action is needed to reverse the youth-vaping surge. And several expressed concern the White House will use the "Tobacco 21" measure, as it is called, to avoid imposing the flavored e-cigarette ban that Trump announced in September but subsequently backed away from.

A White House official speaking on the condition of anonymity to discuss internal deliberations said it was likely Trump would embrace the age change as a solution to the youth vaping issue, but that no final decision had been made.

The "Tobacco 21" measure, as it is called, is partly designed to reduce teens' ability to get e-cigarettes from older friends or acquaintances. Federal regulators have said that "social access" is the most common way for kids to get vaping products.

"While raising the age to 21 is a positive step, in this case, the tobacco industry supports it to avoid other policies — like removing flavors from e-cigarettes and menthol cigarettes that would have a much greater effect," said Matthew Myers, president of Campaign for Tobacco-Free Kids, an anti-tobacco advocacy group.

He noted that underage youth vaping increased sharply in the last two years, even with a minimum legal age of 18. "If age restrictions were a solution," he said, "we wouldn't be having this problem."

Trump said in September that the Food and Drug Administration planned to take off the market any e-cigarettes that were not designed to taste like tobacco. But under fire from vape-shop owners and conservative groups, he backed away from the plan last month and has yet to announce a substitute. The administration's handling of the issue drew criticism from senators of both parties during the recent confirmation hearing of MD Anderson Cancer Center oncologist Stephen Hahn to be FDA commissioner.

A White House spokesman declined to comment on the legislation to raise the tobacco age, noting the measure has not passed yet.

The end-of-year congressional spending bill does not include other health priorities for the White House and Democrats, such as a measure to address surprise medical bills that consumers incur when they unknowingly use doctors outside of their insurance network, and steps to curb high prescription drug prices. Congress has spent months wrangling over drug prices, a top voter concern and priority of Trump's. But when the House passed a measure last week that would allow Medicare to negotiate the prices of up to 250 drugs each year, Senate leaders promptly rejected it.

The federal tobacco legislation follows efforts by many states to make it harder for teens to buy cigarettes and vaping products. Nineteen states, plus the District of Columbia, have already barred sales of tobacco products to consumers under 21, and 16 of the 19 state laws already have been implemented, according to the Campaign for Tobacco-Free Kids. Hundreds of localities also have raised the tobacco age.

The McConnell-Kaine legislation earlier was included in a package of health-related measures, but when that legislation got bogged down, it was moved to the must-pass spending bill. Other lawmakers of both parties also introduced similar legislation to raise the tobacco age.

Altria, which makes Marlboro cigarettes and owns 35% of the e-cigarette giant Juul, supports the move, as do Juul and another big tobacco company, Reynolds American Inc.

Erika Sward, a spokesperson for the American Lung Association, applauded the higher tobacco age, but said, "It won't alone solve the epidemic." Her organization backs a comprehensive ban on all flavored tobacco products.

Vaping advocates have fought flavor bans, saying adult smokers rely on flavors to try to quit smoking. They have backed raising the tobacco age as one way to reduce youth access to e-cigarettes without banning flavors.

Besides raising the federal tobacco age, the bill also includes a permanent repeal of the Affordable Care Act's so-called Cadillac tax on high-cost employer health plans, as well as the health insurance tax and medical device tax — which were originally passed as part of the health law to fund its coverage expansion but which have been delayed by lawmakers in both parties. It also funds various public health programs through May 22, which creates another deadline for Congress to pass legislation.

A senior Democratic House aide familiar with the talks said the goal is to pass legislation in the spring that deals with surprise billing and drug prices, while extending the public health program funding.

- - -

The Washington Post's Josh Dawsey contributed to this story.


Money
U.S. economy shakes free of recession fears in striking turnaround since August

WASHINGTON - The U.S. economy is heading into 2020 at a pace of steady, sustained growth after a series of interest rate cuts and the apparent resolution of two trade-related threats mostly eliminated the risk of a recession.

This marks a dramatic turnaround in momentum since August, when some forecasters predicted a 50% chance of a downturn starting by the end of next year.

Many economists credit the Federal Reserve's recent interest rate reductions and the slightly improved trade picture for propelling the stock market to fresh record highs and causing forecasters to bump up their predictions for how long the economy can keep growing and adding jobs without stumbling.

President Donald Trump secured Democrats' approval last week of a trade deal with Mexico and Canada that would keep most goods traded between the three nations tariff-free. He also reached a limited trade agreement with China that scrapped hefty tariffs in exchange for China agreeing to buy about $200 billion more in U.S. goods over the next two years.

The trade deals, while not nearly as ambitious as Trump promised, have lessened one of the biggest drags on the U.S. economy: uncertainty. While some industries still face significant tariffs and final details remain in flux, business leaders say at least they know what the situation is likely to be in 2020, offering more clarity than they have had since Trump's trade war commenced nearly two years ago.

"Tariffs will be much more stable for quite a while," Larry Kudlow, Trump's top economic adviser, told The Washington Post. "Some of the obstacles to growth, including the Fed and trade uncertainties, are being removed, and that will have a powerful positive impact on the economy."

U.S. Trade Representative Robert Lighthizer said Sunday that some of the larger-scale structural changes the White House wants China to make could take "years" to accomplish, reinforcing the belief that the White House could scale back some of its adversarial tactics next year as Trump nears his reelection bid.

"The risk of a trade-war-induced recession - which we never thought was high - has been materially reduced," said Ian Shepherdson, chief economist at Pantheon Macroeconomics Sunday, in a note to clients.

Kudlow predicts 3% economic growth next year, a pace that Trump promised voters but that has not been reached since 2005 and almost no forecasters outside the White House think is feasible.

While Trump is almost certain to fall short of his vow, the majority of economists now think the economy will grow about 2% next year, a rate solid enough to ensure that unemployment stays near a half-century low of 3.5%. This could benefit Trump on the campaign trail, as no president since World War II has lost reelection when unemployment was below 7.4%.

The major fears in August were that businesses would continue pulling back their spending, Trump would continue imposing tariffs, and companies would soon turn around and ax jobs. But that worst-case scenario didn't materialize. Job gains exceeded expectations in October and November.

Many economists say Trump should be thanking the Fed for coming to the rescue after he escalated the trade war this summer. The Fed reduced the benchmark U.S. interest rate three times this year - in July, September and October - taking it from nearly 2.5% down to just under 1.75%. Trump has repeatedly bashed the Fed, calling the central bank's leadership "boneheads," but it was the central bank that stimulate the economy in recent months.

"The reason things are looking more positive now is due to the Fed," said Constance Hunter, chief economist at KPMG. "We are seeing a turnaround in housing because mortgage rates are low."

White House officials say the trade deals alone could push growth up half a percentage point next year, up from about 2.3% this year. U.S. consumers have been the powerhouse of the U.S. - and global - economies this year, and that is likely to continue next year. On top of that, Kudlow argues, business investment is likely to make a comeback next year now that the Fed has made it cheaper to borrow money and Trump has hit the pause button on most additional tariffs.

Business investment contracted from April through September despite assurances from White House officials that the 2017 tax cuts would lead to a surge in new investments. That pullback helped create a drag on economic growth.

The economy next year is also expected to benefit from high levels of government spending, as well as an uptick in Chinese purchases of U.S. products. The government is projected to spend $1 trillion more than it brings in through revenue next year, an unusually large gap during a period of economic growth.

This adds to the debt and drives up borrowing costs, something Republicans have long opposed, but they have been largely supportive since Trump entered office.

Despite the low interest rates and progress in trade talks, a number of independent economists still believe the economy won't pick up much momentum. Many see the economy treading water next year, with a modest uptick in business investment offset by weaker consumer spending. They base this on recent clues, such as sluggish retail sales for November, typically a powerhouse month.

"We are not headed toward a recession, but the data do not indicate any form of sudden re-acceleration going into 2020," said Gregory Daco, chief U.S. economist at Oxford Economics.

Import tariffs remain on nearly $370 billion worth of goods from China, with the bulk of those aimed at parts used in manufacturing cars and other items. This has created an ongoing drag that caused a contraction in U.S. manufacturing this year. While the latest data on manufacturing indicate that the sector might have stabilized, it's unclear whether things are improving.

Trump did agree to cut tariffs on about $120 billion worth of Chinese imports - mostly shoes and clothes - from 15% to 7.5%, but Daco ran the numbers and found that the impact was "negligible" on the economy.

Weak growth abroad has also dampened business optimism in the United States this year, as roughly 90% of the world economy experienced a slowdown. Next year should be slightly better, according to the International Monetary Fund and other forecasters, but Paul Christopher of Wells Fargo Investment Institute says this will be a "slow and shallow" global recovery that is much weaker than what occurred coming out of 2012 and 2015.

"China is re-orienting its growth to domestic sources, especially technology production," Christopher says. "It is not yet clear what will drive a global manufacturing recovery."

The one part of the economy that has shown noticeable pickup in recent months is housing, a sector influenced far more by the Fed's action than by Trump's trade negotiators. Purchases and refinancings have picked up since the summer, even though the share of homes for sale has remained low and affordability has been a major issue in many cities.

But even in housing, the outlook for next year is uncertain. Mortgage rates are likely to stay in the same place for months to come after Fed Chairman Jerome Powell indicated last week that there is a high bar for the central bank to cut - or raise - interest rates in 2020 because it thinks the economy is in a good place and does not need extra stimulus. None of the Fed leaders penciled in a rate cut next year in their December forecasts.

Home Depot, a major home-improvement chain that is also seen as a bellwether for the housing sector, scaled back its sales forecast for next year after Chief Financial Officer Richard McPhail said the U.S. housing market in 2020 would "not [be] at a level that we've seen in prior years."

But Ken Simonson, chief economist at Associated General Contractors of America, predicts a "burst of home construction" next year and said the latest surveys show contractors are "very busy and upbeat" about the future.

Much of this will depend on the spending habits of consumers next year, which economists, business executives and political leaders are watching very closely.


Education
University of Nebraska-Lincoln will take on more incentive-based budgeting process next year

The University of Nebraska-Lincoln plans to start budgeting with a more businesslike approach next year, measuring academic programs’ revenues and expenses.

University administrators here and elsewhere say they must be more financially aware and “transparent,” to use the popular word, in this era of flat state funding, worries over enrollment trends and questions about how well higher education prepares students for careers and serves the workforce.

Leaders of the UNL initiative say the change doesn’t mean that programs will be slashed or that the institution will become a trade school. But the new budget strategy, called an incentive-based budget, gives college deans at UNL more authority over their own revenue and costs. And it calls on professors to be more innovative to bolster enrollment.

For the most part, faculty members say they trust the process and the administration.

“I think this will be a positive for the university,” UNL Faculty Senate President Kevin Hanrahan said. “We’re in agreement that we have to do something.”

At the same time, faculty members are apprehensive “because this is going to bring about change, no doubt,” Hanrahan said. “We also don’t want to go too far.”

Sign up for World-Herald news alerts

Be the first to know when news happens. Get the latest breaking headlines sent straight to your inbox.

Sarah Zuckerman, an assistant professor in UNL’s department of educational administration, said her discipline isn’t a profit-maker. “Nor should it be. ... My department plays a key role in serving the state of Nebraska’s public school system by providing highly trained school leaders.”

Zuckerman, who said she only speaks for herself and not her department, added: “I fear any effort to turn an institution that serves the common good into a corporation.”

UNL administrators say it’s not about making profits or going corporate. The land-grant mission of teaching, research and service remains, they say.

Hanrahan, a voice professor in the College of Fine and Performing Arts, is in the kind of discipline in which professors worry about how they will fare under incentive-based budgeting. Hanrahan said he has numerous one-on-one voice sessions with students, as well as one course per semester on “vocal pedagogy,” or teaching, that can attract anywhere from eight to 25 students.

The low student-faculty ratio of voice lessons and of doctoral programs in many fields isn’t designed to make more money than they cost. “We like to have music in our world,” he said. “Those things are never going to be self-supporting.”

Kathy Farrell, dean of UNL’s College of Business, said the incentive-based budgeting will not require colleges and programs to be moneymakers. There will be money to support the university’s strategic priorities and funds built in to support the classics, music, fine arts, engineering and other expensive programs, Farrell said.

In rare instances, Farrell said, universities have required colleges or programs to balance budgets without subsidies. That will not be the model used by UNL, she said.

Nevertheless, more responsibility will rest with the college deans. “It makes you think about things in a different way,” she said.

The existing budget system involves a top-down allocation, bumping colleges’ funding up or down based on the university’s overall state money and enrollment.

Under the new system, deans may get help with high-cost programs but will also be “taxed” for the space they consume, library services, university administrative costs and other overhead.

The new system is expected to take effect on July 1, 2020. The brainstorming, studying, committee work and expert consultations have been going on for about three years. A steering committee of administrators, professors and staffers has taken the lead this year.

Some programs will be bolstered through creativity, said Bill Nunez, UNL’s vice chancellor for business and finance. Nunez and Farrell are co-chairs of the steering committee.

For instance, UNL geography, once marked for elimination, lives on after teaming up with global studies and the department of anthropology.

Nunez said there is no question that UNL will continue to value theater, philosophy, classics and other programs that don’t necessarily generate big numbers of students or dollars. The goal is for deans to have a greater sense of fiscal responsibility, Nunez said.

Information from Huron, a Chicago-based consulting group, indicates that budget redesigns started in 1974 at the University of Pennsylvania. But over the past 10 years, more and more institutions have changed how they budget, Huron said. They include Iowa State, South Dakota, Kansas, Kansas State and Wyoming, Huron reported.

Andrew Laws, managing director in education at Huron, said he is personally aware of about 65 universities moving to incentive-based budgeting over the past few years. Laws, who has written a book on the topic, said only two that changed went back to the original form of budgeting.

And those two — South Carolina and Vanderbilt — have since returned to incentive-based budgeting, he said.

The University of South Dakota, which moved to incentive-based budgeting about six years ago, hasn’t closed many, if any, programs, said Robert Turner, chairman of the University Senate.

“It works OK,” said Turner, an associate professor of Spanish. “I’m not a superfan, but I don’t hate it.”

Student demand has led to a program in environmental sustainability, Turner said. And starting next fall, there will be classes in Spanish for legal professions and masterworks of Spanish, a new version of the unattractively named Intro to Literature 335.

Faculty members at South Dakota haven’t seen radical changes, Turner said. It’s hard to argue that professors should not have a role in actively recruiting students into their programs, he said.

Laws said incentive-based budgeting might lead to the creation of classes in “the history of rock ‘n’ roll” or “the history of hip-hop.” And if they draw large enrollments, then those classes can help support a Russian literature class, he said.

A university offers an academic program for two reasons, he said — its profitability and the fact that it’s critical to the mission. Incentive-based budgeting, he said, helps universities think about the balance between those two.

Photos: Our best shots of 2019 (so far)

Local
With $17 million federal grant, Omaha can finally start 120th Street project

It’s a familiar scene outside Mulhall’s Nursery in northwest Omaha.

As traffic backs up on 120th Street, a customer heading south toward Mulhall’s will need to turn left across traffic.

So a driver stuck going the other way on 120th Street will wave the other person across.

But then someone else in the next lane over doesn’t see this courtesy wave and the crossing car.

Crash.

With crashes and traffic and frayed drivers adding up, the City of Omaha is moving forward with a plan to rebuild more than a mile of 120th Street north and south of West Maple Road.

In November, the U.S. Department of Transportation chose Omaha to receive a $16.96 million federal grant for the project — pushing up the construction timeline three years and allowing work to start next year.

The problems on 120th Street go beyond Mulhall’s.

BRENDAN SULLIVAN/THE WORLD-HERALD 

Work to rebuild more than a mile of 120th north and south of West Maple will make the stretch a consistent four-lane street with turn lanes and medians to block dangerous turning points.

North of Maple, 120th Street remains just two lanes in a part of Omaha that long ago went through a growth spurt.

The street can be a real headache for people driving to Tranquility Park, where traffic stalls quickly outside the busy soccer fields.

On top of that, there’s no good way to get to the park on foot or by bike.

All that will be addressed by the 120th Street project, which will run from Stonegate Drive to Fort Street.

“It’s such a chokepoint that people will be surprised once it is opened,” said Dan Mulhall of the Mulhall’s nursery family, whose properties bookend the project. “They’ll be wondering why we didn’t do it years ago.”

Even as northwest Omaha stretches to Bennington and Elkhorn, a fix for 120th Street has been stalled in planning.

In a letter supporting the federal grant application, Mayor Jean Stothert wrote that the project has been in the works for 15 years but has repeatedly been delayed by a lack of funding.

The project’s high cost — $21.2 million — has been one impediment.

Gayle Sturdivant, the design division manager in Omaha’s Public Works Department, said the city will deal with two bridges in the project. To the north, the bridge over the Big Papio Creek will be replaced. To the south, a bridge over a smaller creek will be widened.

Throughout the stretch, 120th Street will become a consistent four-lane street with turn lanes, medians to block dangerous turning points and sidewalks. At the Big Papio Creek, a recreational trail will be built to run under 120th Street, eventually offering a connection to the Big Papio Trail.

The city will pay the $4.24 million not covered by the federal grant.

“It’s been a long time coming,” Sturdivant said of the project.

Youth soccer boosters are on board, too.

BRENDAN SULLIVAN/THE WORLD-HERALD 

The intersection of 120th Street and West Maple Road. The city will be able to start the 120th Street project next year, three years sooner than planned, after receiving a $16.96 million federal grant. 

Casey Mann, executive director of the Nebraska State Soccer Association, said Tranquility Park has been the home of soccer in Omaha for years.

Soccer officials even have plans for a potential $40 million makeover of the complex.

But as the sport has grown in Omaha and at Tranquility Park, the streets have not kept up, Mann said.

Today, three of the park’s entrances are off the two-lane section of 120th Street — which can easily tie up traffic if one driver needs to turn.

“We’re some of the biggest fans of that project coming,” Mann said.

When the DOT announced Omaha’s grant, even Sen. Deb Fischer and Rep. Don Bacon applauded the project and the federal funding. Both had written letters in support of Omaha’s grant application.

Fischer, in a statement, said the grant will “make life easier for commuters and families by providing more capacity in an area where there is an increasing amount of traffic.”

Mulhall’s will lose two of its three access points to 120th Street. Some people might think that it’s silly for a business to give that up, Mulhall said.

But in the grant application, Mulhall wrote that customers have told the business that they “simply avoid coming to our store at times because of the traffic.”

Mulhall said the business ultimately hopes that people coming to a garden center will have a calming experience, and a safe intersection will help that.


Omaha's 10 busiest intersections

Omaha's 10 busiest intersections