THIRD WORLD U$A

Why millions of people could lose Medicaid next month

BY NATHANIEL WEIXEL - 03/22/23 

Health officials are bracing for chaos as states begin to determine — for the first time in three years — who is eligible for Medicaid, as a key pandemic policy of guaranteed eligibility ends.

Advocates warn that without a safety net, millions of vulnerable people will fall through the cracks and lose coverage. 

The Biden administration is giving states a year to go through the once-routine process of sorting through Medicaid rolls, though some are moving much faster. 

Arkansas for instance will speed through the redetermination process in only six months, citing cost concerns and the goal of Gov. Sarah Huckabee Sanders (R) to push people to “escape the trap of government dependency.” 

Eight states began the renewal process in February, and have already started sending out renewal notices. But unlike Arkansas, those states won’t begin terminating people from the program until May or June. 

According to a report from the Kaiser Family Foundation, most states will take at least a year. 

“I think any state will tell you there’s going to be chaos,” said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. “It’s going to be unfortunately like a learning experience, but it’s going to be a very, very painful experience for people that lose coverage.”

The Biden administration estimates as many as 15 million people could be at risk of losing Medicaid, though many of those people will be able to transition to employer-sponsored coverage or get insurance through a subsidized Affordable Care Act plan.

The Department of Health and Human Services estimated nearly 7 million people will lose coverage because of administrative barriers like lost or incomplete paperwork.

Prior to the pandemic, states regularly conducted redeterminations. If a person made too much to qualify for Medicaid, they were notified and removed.  

But at the start of the pandemic, the federal government required Medicaid programs to keep people continuously enrolled until the end of the public health emergency, in exchange for higher federal funding. 

So if you were enrolled in Medicaid in March 2020, or if you became eligible at any point during the pandemic, you have remained eligible the entire time no matter what. As a result, the uninsured rate dropped and Medicaid enrollment soared past 90 million people, according to federal data. 

The public health emergency is set to end April 16, though states can start dropping people beginning April 1. 

Experts have described the impending coverage shift as the biggest change in health care since the implementation of ObamaCare, but the impact will be felt differently depending on where a person lives.

For example, in Virginia, which expanded Medicaid eligibility under ObamaCare, a single childless adult can’t earn more than about $1,500 a month to qualify. In non-expansion states like Tennessee and Texas, adults without children don’t qualify for Medicaid at all. 

“I think there are states that are truly conscious of the fact that they don’t want interruptions if they can avoid interruptions. And then there are states … that just queued up, I’m sure a gazillion people to get pushed off,” said Sara Rosenbaum, professor of health law and policy at the Milken Institute School of Public Health at George Washington University.

Rosenbaum said she thinks the federal government has underestimated just how many people are at risk of losing coverage.

“If you’re not an expansion state, huge losses are inevitable. Anybody who’s earning poverty level wages is going to lose the Medicaid coverage and is not going to be eligible for the exchange coverage, and will be working for an employer that is extremely unlikely to be giving them workplace benefits that they can afford to buy,” Rosenbaum said. 

Before the pandemic, people “churned” in and out of Medicaid for various reasons. People lost their coverage if they earned too much or didn’t provide the information needed to verify their income or residency. 

The Biden administration said it is working with state officials to minimize churn. But even in the best of times, states have sent mail to the wrong address, or people move frequently and can’t easily be reached. 

“Their mail may get backed up somewhere, and then they present to a provider and they are needing some really serious care, and then they don’t have coverage at that time. So those are kind of the things that concern me,” said Loretta Alexander, health policy director of Arkansas Advocates for Children and Families. 

Alexander said even though she is concerned Arkansas is moving too quickly, she thinks officials are trying to make the process as smooth as possible. 

“They’ve got a strong plan in place. But of course, you can’t control everything,” Alexander said. 

But across the country, the majority of people are unaware of the looking end of guaranteed coverage. 

According to a survey from the Robert Wood Johnson Foundation, 62 percent of adults with family Medicaid enrollment reported hearing nothing at all about the eligibility redeterminations.

“Despite a lot of attempts to reach out and communicate with people, people are living their lives. And we know that people do not think about their insurance. So, you know, inevitably, people are going to be surprised,” said Hempstead.

Biden administration plans to break up monopoly power of U.S. organ transplant system

BY JULIA MUELLER - 03/22/23 

(gpointstudio/iStock)

A team of surgeons operating.

The Biden administration on Wednesday announced it aims to overhaul and modernize the organ transplant system in the U.S. with a plan that includes breaking up the monopoly power that has run the system for decades.

The Health Resources and Services Administration (HRSA), an agency under the Department of Health and Human Services, released a set of actions it plans to take as part of a broader modernization effort for the organ transplant system. As part of the plan, HRSA says it will solicit multiple contracts to manage the Organ Procurement and Transplantation Network (OPTN) “in order to foster competition.”

Right now, the nonprofit United Network for Organ Sharing (UNOS) is the only group contracted by the government to run the system, and it has come under criticism over its management of the massive system that allocates organs to patients.

HRSA reports more than 104,000 patients are on the national transplant list, waiting for kidneys, livers, hearts and other organs as part of their medical care. The nearly 43,000 transplants that occurred last year hit a record, but still fell short of the high demand from the long waiting list. Seventeen people die each day waiting for an organ transplant, according to the agency.

The HRSA plan did not specify exactly how many contracts it hopes to tack on or how the division of duties would play out, but added that the move also aims to ensure the independence of the OPTN Board of Directors.

UNOS on Wednesday said in a statement that it supports the HRSA’s plan to revamp the organ transplant system and is committed to working with the HHS and HRSA on the efforts.

“We welcome a competitive and open bidding process for the next Organ Procurement and Transplantation Network (OPTN) contract to advance our efforts to save as many lives as possible, as equitably as possible,” the nonprofit said.

The HRSA plan also includes rolling out data dashboards to provide more information on organ donation and transplant and modernizing the agency’s IT system.

President Biden’s budget proposal for the fiscal 2024 suggested more than doubling the funding for organ procurement and transplantation to $67 million next year, according to the release, and requested that Congress make updates the National Organ Transplant Act.

“Every day, patients and families across the United States rely on the Organ Procurement and Transplantation Network to save the lives of their loved ones who experience organ failure,” said HRSA Administrator Carole Johnson. “That is why we are taking action to both bring greater transparency to the system and to reform and modernize the OPTN.”

TAGS BIDEN BIDEN ADMINISTRATION DEPARTMENT OF HEALTH AND HUMAN

Following recent collapses, Americans’ trust in banking industry sharply declines: poll

BY JARED GANS 

THE HILL

- 03/22/23 

AP Photo/Steven Senne
File – A law enforcement official, behind, stands in an entryway to a branch of Silicon Valley Bank, Monday, March 13, 2023, as customers and bystanders line up outside the branch, in Wellesley, Mass.

The public’s trust in the banking industry sharply dropped in the aftermath of the collapse of two prominent banks earlier this month and their effects on the market, according to a new poll.

A poll released Wednesday from The Associated Press and NORC Center for Public Affairs Research at the University of Chicago found only 10 percent of respondents said they have a “great deal” of confidence in banking and financial institutions. That’s down from the 22 percent who said they did in a 2020 poll.

Almost 60 percent of respondents said in the recent poll that they had “only some” confidence in banking, while 30 percent said they had “hardly any.”

In a breakdown of responses from various industries included in the survey, only Congress had a lower percentage say they have a great deal of confidence in the institution.

The lack of trust in banking was bipartisan, as only 10 percent of Democrats and 8 percent of Republicans said they have a great deal of confidence.

Silicon Valley Bank collapsed earlier this month after it did not have enough cash on hand to fulfill withdrawal requests and needed to sell assets, leading to a bank run. Signature Bank, which focuses on cryptocurrency, also crashed a few days later.

The federal government stepped in to protect all deposits from customers even if an account surpasses the $250,000 limit that the Federal Deposit Insurance Corporation protects to try to calm customers and the market.

The country’s largest banks also bailed out First Republic Bank, which is based in San Francisco, to the tune of $30 billion as many of its depositors moved their money to larger institutions.

Pollsters also found bipartisan agreement that government regulation of financial institutions is inadequate. Just more than half of Republicans said so, and 63 percent of Democrats agreed.

Only 15 percent of all respondents said government regulation is too much, while 27 percent said regulation is about the right amount. SEC charges Lindsay Lohan, Jake Paul with crypto violationsThe 5 most important things Fed Chair Powell said about the banking crisis Wednesday

Silicon Valley and Signature banks have received backlash since their crashes as they were some of the top proponents pushing for loosening regulations that were designed to prevent a financial crisis like the Great Recession.

Federal Reserve Chairman Jerome Powell affirmed on Wednesday that the banking system remains “sound” despite the recent chaos.

The poll was conducted from March 16 to 20 among 1,081 adults. The margin of error was 4 percentage points.

Silicon Valley Bank tripled loans to insiders in months before its collapse

BY JULIA SHAPERO 

THE HILL

- 03/22/23 

Silicon Valley Bank more than tripled its lending to bank insiders at the end of 2022, just months before its collapse.

Loans to officers, directors, principal shareholders and related interests jumped from $66 million in the third quarter of 2022 to $219 million in the fourth quarter, according to data on insider loans that banks are required to report to the federal government.

The jump in loans to bank insiders came as the Federal Reserve noticed problems with how Silicon Valley Bank was tracking interest rate risks, or how exposed the bank was to changes in interest rates, Bloomberg reported.

It is a record dollar amount of loans issued to insiders, going back at least two decades, according to Bloomberg.

The Federal Reserve’s interest rate hikes over the last year, part of an effort to rein in soaring inflation, appear to have contributed to Silicon Valley Bank’s demise earlier this month. 

Following recent collapses, Americans’ trust in banking industry sharply declines: poll

SEC charges Lindsay Lohan, Jake Paul with crypto violations

The bank had invested heavily in longer-term mortgage-backed securities when interest rates were low during the pandemic.

However, as interest rates rose, Silicon Valley Bank’s investments lost about $15 billion.

Officials on Wednesday hiked interest rates again by 0.25 percentage points after the numerous failures in the banking sector prompted some analysts on Wall Street to call for a pause.

Jack Daniel’s dispute against dog-toy company lands at Supreme Court 

BY ZACH SCHONFELD

THE HILL

- 03/22/23 

A bottle of Jack Daniel’s Tennessee Whiskey is displayed next to a Bad Spaniels dog toy in Arlington, Va., Sunday, Nov. 20, 2022. Jack Daniel’s has asked the Supreme Court justices to hear its case against the manufacturer of the toy. (AP Photo/Jessica Gresko)

“Debbie Does Dallas.” Shirts with drunk donkeys and elephants. Toilet humor.

The Supreme Court on Wednesday got a rare dose of humor as the justices took under consideration a request by Jack Daniel’s to hold a company liable under a federal trademark law for producing poop-themed dog toys that spoof its whiskey bottles.

The company, VIP Products LLC, replaced the famed “Jack Daniel’s” typography with “Bad Spaniels,” also swapping “Old No. 7 brand” and “Tennessee Sour Mash Whiskey” with “The Old No. 2 on your Tennessee Carpet” as they parodied the famed brand into a chewy dog toy.

The dispute brought a seldom-seen lighthearted atmosphere to the courtroom during oral arguments, with the justices cracking jokes and posing entertaining hypotheticals as they weighed if humor gives the toys heightened First Amendment protections that block the trademark claims.

“The parody is to make fun of marks that take themselves seriously,” argued Bennett Cooper, who represented VIP Products and asserted their dog toys were works of artistic expression subject to free-speech protections, as lower courts have found.

“I mean you say that, but you make fun of a lot of marks: Doggie Walker, Dos Perros, Smella R-Crotches, Canine Cola, Mountain Drool. Are all of these companies taking themselves too seriously?” Justice Elena Kagan responded.

Sitting a few feet away, Justice Clarence Thomas chuckled as Kagan ran through the company’s product list, which parody alcoholic and soft drink brands like Dos Equis, Coca-Cola and Mountain Dew.

Trademark cases typically involve an analysis of whether consumers are likely to be confused by a product’s use of a protected mark.

But VIP Products wants the justices to uphold a ruling that found the company wasn’t liable under the “Rogers test.”

Many lower courts have adopted the test, which balances trademark claims against works of creative expression with First Amendment protections. But the high court has never endorsed it, making the case the justices’ first major confrontation with the Rogers test.

The justices are also grappling with the lower court’s ruling that VIP Products is protected from Jack Daniel’s trademark dilution claims because the use of the mark was noncommercial. The court had ruled that the company not only was selling a dog toy, it was also conveying a “humorous message.”

Jack Daniel’s, which was backed by the Justice Department, contended that upholding the lower ruling would render the nation’s primary federal trademark law “virtually useless,” listing off in court filings several examples the company says would tarnish popular brands.

Lisa Blatt, who represented the whisky maker, referenced the movie “Debbie Does Dallas” and a past case involving Barbie dolls.

“Could any reasonable person think that Jack Daniels had approved this use of the mark?” asked Justice Samuel Alito, who said he was concerned about the First Amendment implications of Jack Daniel’s position.

Blatt indicated yes before suggesting Alito had “hindsight bias.”

“It’s just a little rich for people who are at your level to say that you know what the average purchasing public thinks about all kinds of female products that you don’t know anything about or dog toys that you might not know anything about,” Blatt said.

Alito jokingly quipped back, “I had a dog, I know something about dogs,”

Justice Ketanji Brown Jackson expressed concerns the other way, stating, “people can be totally confused, but we then just scream First Amendment and we get out of Lanham Act liability. And I don’t see that in the statute, and that’s what I’m worried about.”

Blatt throughout her argument stressed the importance of using consumer survey data to gauge consumer confusion in trademark cases. Jack Daniel’s survey expert in earlier proceedings determined that 29 percent of potential customers were likely to be confused about the company’s affiliation with “Bad Spaniels.”

Cooper, representing the dog-toy maker, later shot back that “the First Amendment is not a game show where the result is, ‘survey says I’m confused, stop talking.’”

Justice Sotomayor questioned Blatt if a political party armed with survey data could take someone to trial for selling t-shirts on Amazon that show a drunk donkey or elephant — which are associated with the Democratic and Republican parties — accompanied by the slogan, “it’s time to sober up America.”

“That’s funny, your example. Gonna give you that,” Blatt responded.

A decision in the case, Jack Daniels Properties, Inc. v. VIP Products LLC, is expected by late June.

Supreme Court to hear Jack Daniels' trademark arguments with dog toy company


The Supreme Court will hear oral arguments Wednesday in a case between Jack Daniels and a dog toy company that sells a toy that parodies its iconic whiskey bottle.

 Image courtesy of Wikimedia Commons


March 19 (UPI) -- The Supreme Court will hear oral arguments Wednesday in a case between Jack Daniels and a company that sells a dog toy that parodies its iconic whiskey bottle.

In a petition to the court, the marquee brand in Tennessee whiskey claims that VIP Products' dog toy damages the Jack Daniels brand and confuses its customer base, violating trademark law. The hearing comes after the U.S. Court of Appeals for the 9th Circuit landed on the side of the toymaker in 2020.

The district court said that VIP Products using the likeness of a Jack Daniels bottle to "sell poop-themed dog toys was likely to confuse consumers, infringed Jack Daniel's marks, and tarnished Jack Daniel's reputation" but ruled that VIP's parody bottle was granted special protection as expressive content under the First Amendment.

The toy in question, labeled "Bad Spaniels" and parodying Jack Daniels' "Old No. 7" with "Old No. 2 on Your Tennessee Carpet," was introduced in 2014.

Jack Daniels asked VIP Products to stop selling the toy, according to court documents.

VIP Products then sued Jack Daniels U.S. District Court for the District of Arizona, seeking a ruling that its product did not constitute copyright infringement. Jack Daniels filed a countersuit which was granted, while the court denied VIP Products' motion.

The back of the toy carries a disclaimer that reads: "This product is not affiliated with Jack Daniel Distillery."

In its petition, Jack Daniels cited other cases where parody products caused confusion among customers, including "marijuana-infused" candy products that mimic the packaging of popular candies and cookies.

One example was a parody of Nestle's Double Stuf Oreos which were labeled "Double Stuf Stoneos." The petition claims that children were hospitalized because they could not tell the difference and ate the candy.

"This case involves the serious subject of alcohol, intended for adult consumption, and the not-so-serious subjects of dog toys and poop," a reply to the Supreme Court from Jack Daniels reads. "No one disputes that VIP is trying to be funny. But alcohol and toys don't mix well, and the same is true for beverages and excrement."

While the attorneys for Jack Daniels present the case with a level of humor, the decision will carry larger implications on protecting brand identity from parody. Jack Daniels claims that a decision against it would put brands with as much as a "century's worth or brand identity" at risk.

A number of companies and trade groups have filed amicus briefs in the case, including Nike, Levi Strauss, Patagonia and the Campbell Soup Company -- which each sided with Jack Daniels.

"Nike considers its Nike word trademark and Swoosh Design trademark to be among its most valuable and recognizable assets. Nike has registered these trademarks in almost 170 jurisdictions worldwide," the amicus brief from Nike reads.

"Nike therefore has a vital interest in strong and well-functioning legal regimes for the protection of trademark and other intellectual property rights."

Nike indicated that its primary concern in the Jack Daniels case was the Circuit Court's use of a legal doctrine established by Rogers v. Grimaldi, another case argued in 1989, to determine when the Lanham Act applies to artistic works.

In the Rogers v. Grimaldi case -- a dispute between actress and singer Ginger Rogers and Italian film producer Alberto Grimaldi -- the Second Circuit court upheld a decision from a lower court which found Grimaldi not liable for emulating Rogers and Fred Astaire in the Federico Fellini film "Ginger and Fred."

"The Ninth Circuit has vastly extended the reach of Rogers and applied that judicial gloss to ordinary consumer goods," Nike said, noting that the so-called Rogers test has most often been applied to artistic works such as books and movies.

In its amicus brief, Campbell's Soup said the legal doctrine established by Rogers requires the petitioner to show that the use of their trademark is not artistically relevant to the infringing work or that the use of it explicitly misleads consumers.

Campell's Soup argued that the Rogers doctrine "has no basis in the Lanham Act's text or the Constitution."

"The First Amendment does not authorize the Ninth Circuit to rewrite the unambiguous language of that Act or to decide not to apply the law as written," Campbell's Soup argued.

"When a defendant's commercial use of another's mark causes significant consumer confusion, a decision to impose trademark infringement liability under the Lanham Act clearly comports with the First Amendment."

Patagonia and Levi Strauss said in a joint amicus brief said that the decision by the Ninth Circuit court and other similar cases adds a "mammoth loophole" to the Lanham Act and poses "a substantial threat to the viability of brands the public has come to trust."

Recent trademark, likeness and copyright cases have landed on the side of the party using another's likeness. Late last week, a federal judge dismissed a copyright case over the use of late Supreme Court Justice Ruth Bader Ginsburg's likeness from a photograph being used by an artist. The judge decided in favor of the artist against the photography company that owned the copyright to the image.

Norfolk Southern CEO dodges question on support for railway reform bill

BY ZACK BUDRYK - 03/22/23 


Norfolk Southern CEO Alan Shaw testifies before the Senate Environment and Public Works Committee hearing to examine protecting public health and the environment in the wake of the Norfolk Southern train derailment in East Palestine, Ohio, Thursday, March 9, 2023, in Washington. (AP Photo/Kevin Wolf)

Norfolk Southern Railway CEO Alan Shaw said Wednesday that he supports certain aspects of a bipartisan railroad safety bill introduced after a train operated by the company crashed in East Palestine, Ohio, but declined to endorse the bill as a whole.

Shaw, testifying before the Senate Commerce Committee, told Sen. Amy Klobuchar (D-Minn.) that there are “many provisions” in the bill, sponsored by Ohio Sens. Sherrod Brown (D) and J.D. Vance (R) “for which we give our full-throated endorsement.” Asked by Klobuchar if he supported the bill itself, Shaw repeated, “I support a number of provisions within the bill.”

When the Minnesota Democrat followed up by asking which provisions in the legislation he did not support, Shaw instead began listing off provisions he endorsed, including funding for first-responder hazardous materials training and expansion of advanced notification.

Klobuchar vowed to submit the question in writing, saying, “I don’t want this to be one of those moments where we take two years to pass a bill.”

Vance, a member of the committee, also made witness remarks in which he urged colleagues to support the bill. As in his opening remarks at an earlier hearing of the Environment and Public Works Committee, Vance blasted the argument that the legislation would constitute interference in the free market.

“The most outrageous and the most ridiculous thing that I’ve heard from industry groups and other activists in response to this bill is that it’s somehow a kind of Bolshevism to require the railroads to engage in proper safety standards,” he said. He referenced the rail industry successfully lobbying Congress to pass a bill breaking a looming rail strike in late 2022.FAA calls on airline industry to take action following series of close callsCDC: Tainted eye drops linked to three deaths, vision loss

The Ohio Republican, who testified before Shaw, blasted what he said have been Norfolk Southern’s “blurry legalisms” in descriptions of their corrective actions. “Phrases from their announcement, ‘develop a plan,’ ‘anticipates adding,’ and ‘where practical’ are not enough, not when towns across America are at stake.”

Brown and Vance’s measure would transfer oversight of certain safety procedures from rail operators to the federal government, tighten requirements for trains carrying hazardous materials and introduce more modern tank cars. President Biden has endorsed the measure and Brown told The Hill last week that he believes it can secure a filibuster-proof 60-vote majority in the Senate.

The Norfolk Southern train, which was carrying several cars of the hazardous chemical vinyl chloride, derailed in East Palestine on Feb. 3. The Environmental Protection Agency has taken over cleanup effort and has said Norfolk Southern will be held financially liable for all relief.

Fed hikes rates despite concerns over banking crisis

BY TOBIAS BURNS - 03/22/23 

Federal Reserve Chairman Jerome Powell is seen before discussing his semiannual Monetary Policy Report to Congress before the House Financial Services Committee on Wednesday, March 8, 2023.

The Federal Reserve hiked interest rates by 0.25 percentage points on Wednesday after numerous failures in the banking sector had prompted some analysts on Wall Street to call for a pause.

The quarter-point hike is the ninth consecutive rate increase by the Fed since March of last year as part of the U.S. central bank’s program of quantitative tightening undertaken in response to high inflation. The Fed’s baseline interest rate range is now set to 4.75 to 5 percent.

The move shows that the Fed’s first priority remains bringing down elevated price levels, even as the bank’s rate increases have strained portfolios in the banking sector, triggering some poorly managed banks to collapse.

Federal Reserve Chairman Jerome Powell discusses his semiannual Monetary Policy Report to Congress before the Senate Banking, Housing, and Urban Affairs Committee on Tuesday, March 7, 2023.

Inflation has been falling but is still high

Price growth as measured in the consumer price index (CPI) and personal consumption expenditures (PCE) price index have been coming down since the middle of last year but are still well above the Fed’s target rate of 2 percent.

The PCE ticked up to 5.4 percent annually from 5.3 percent for the first time in several months in January, leading some analysts to call for a larger 0.5 percentage point increase this month by the Fed.

Concerns about the banking industry took the larger hike off the table earlier this month.

Inflation in the economy hasn’t occurred across the board in the aftermath of the coronavirus pandemic but has been concentrated in different sectors at different times.

An initial inflation in durable goods and autos has since dissipated, along with commodity inflation following the escalation of the war in Ukraine, while inflation in the housing sector remains a primary driver of the elevated headline numbers.

“These things have really had their own separate timing and their own separate dynamics. It’s very hard to argue that any of these are just your standard demand-driven inflation,” economist J.W. Mason of the City University of New York said during an event earlier in March

.

Traders on the floor at the New York Stock Exchange watch Federal Reserve Chair Jerome Powell’s news conference after the Federal Reserve interest rate announcement in New York, Wednesday, Feb. 1, 2023.

Bankers had been calling for a pause

Some Fed policy prediction algorithms put the chances of a 0.25 percentage point rate hike as high as 86 percent on Tuesday, but many analysts had still been calling for a break in the hikes ahead of the Fed’s decision this week.

“Bank stress calls for a pause,” analysts for Goldman Sachs wrote in a Monday research letter to investors, arguing that banking is more important than other sectors of the economy.

“Banking is not just another sector of the economy because financial intermediation is vital to every sector. As a result, addressing stress in the banking system is the most immediate concern and must take priority over other less urgent goals for the moment. We expect that policymakers and staff economists at the Fed will have the same view,” they wrote.

Other influential commentators agreed.

“The banking mess is, as far as I can tell, sufficient reason for the Fed to pause until we know more,” economist Paul Krugman wrote online.

Backdrop of failed banks

The Fed decision comes after a series of bank failures over the past week-and-a-half prompted government intervention to prop up the banking sector and placate volatile markets.

The spark was lit by the collapse of Silicon Valley Bank (SVB), where a run by rich depositors largely from the venture capital sector led to insolvency. The bank couldn’t pay depositors because their money was tied up in longer-term bonds that hadn’t yet come to maturity and are sensitive to interest rate hikes.

The Federal Deposit Insurance Corporation (FDIC), Fed and Treasury responded by insuring all deposits at the bank above the standard $250,000 limit, using money from the FDIC’s deposit insurance fund as well as a new line of credit from the Fed backed up by $25 billion of taxpayer money.

Markets responded positively to the move last Monday but were falling fast by the middle of the week on fears of yet more failures.

Another California-based bank, First Republic, was poised to collapse before Treasury Secretary Janet Yellen reportedly leaned on JPMorgan Chase chief Jamie Dimon to organize a private-sector bailout, corralling a consortium of 11 banks to pony up $30 billion.

Security admits a man to the lobby as customers queue up outside the collapsed Silicon Valley Bank in Santa Clara, Calif., on March 13, 2023. President Biden assured Americans that the U.S. banking system is safe.

While technically a deposit executed at a market rate, the move drew criticism from some investors as ostensibly an act of charity compelled by pressure from the government.

“The [systemically important banks] would never have made this low return investment in deposits unless they were pressured to do so and without assurances that [First Republic Bank] deposits would be backstopped if it failed,” billionaire investor Bill Ackman wrote online last Thursday. It isn’t known if Ackman held a commercial position with regard to First Republic.

Meanwhile, European giant Credit Suisse failed after Saudi investors declined to increase their investment in bank, leading to an appeal to the Swiss National Bank and eventually a shotgun sale to rival UBS

.

JPMorgan Chase & Co. Chairman and CEO Jamie Dimon answers questions during a House Financial Services Committee oversight hearing of the largest U.S. banks on Wednesday, September 21, 2022.

Fed’s balance sheet has spiked

Independent of the move on rate hikes, the Fed’s balance sheet has rocketed up over the past week, already potentially stalling the Fed’s tightening program.

The balance added more than $300 billion in assets over the course of last week, jumping up from $8.34 trillion to $8.64 trillion.

“Amid the failures, banks borrowed $153 billion from the primary credit discount window … and another $12 billion via the new Bank Term Funding Program,” analysts for Deutsche Bank wrote in an analysis last week.

They pointed out the Fed also provided $143 billion of liquidity to the 2 FDIC-owned bridge banks set up after the closures of SVB and Signature Bank.

“By district breakdown, San Francisco (+$233 billion ) and New York ($55 billion) had the biggest increases in securities and loans portfolios. Despite record activity at the discount window, total Fed liquidity borrowed was still a fraction of peak liquidity provided during the [global financial crisis] and Covid,” they wrote.

The public is disapproving of bank bailouts

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While the Fed’s actions over the past week may prove enough to save the banking industry from a wider collapse, Americans overwhelmingly agree that taxpayers should not have to bail out banks that can’t properly manage themselves.

A new public opinion poll by Ipsos found that 84 percent of Americans agree – and 56 percent agree strongly – “that taxpayers should not have to foot the bill for irresponsible bank management.” The frustration is bipartisan, with 85 percent of Democrats and 86 percent of Republicans in agreement.

Less than half of Americans are in favor of government bailouts of U.S. financial institutions at 49 percent, the poll found.

Removal of Koeberg steam generators gets under way

22 March 2023

The first of Koeberg 1's steam generators has been removed in a project that will see all three of the South African unit's steam generators replaced in anticipation of its extended operation. The steam generators of unit 2 at the plant, near Cape Town, are also to be replaced.

The steam generator being extracted from the containment building (Image: Eskom)

The replacement of the steam generators at unit 1 had originally been planned to take place between February and June 2021, with those of unit 2 scheduled for replacement between January and May 2022. However, this has been delayed due to concerns about the tight supply of electricity while the units are offline.

The first steam generator has now been removed from the containment building of unit 1 - which entered a refuelling and maintenance outage on 10 December last year - and placed in the storage building that was built to house the steam generators, owner Eskom announced on 21 March.

"This is a significant accomplishment for the Koeberg team, the contractor and the numerous local and international subcontractors involved in the project," the company said. "It is a great relief to have reached this milestone as the steam generator replacement project has experienced numerous false starts in previous outages and some unexpected challenges during the execution in the current outage to get to this point in the project."

The steam generator being manoeuvred into the storage building (Image: Eskom)

Eskom noted that once all three steam generators have been removed and the new ones installed, it still needs to complete the maintenance activities scheduled for the outage, commission all the systems, refuel the reactor and return the unit to service.

The company had earlier said the unit was expected to remain out of service until June 2023.

"Due to the delays that have already been experienced, the original return to service date for the unit is no longer achievable," Eskom noted. "Although every effort is being made to reduce the impact, we are currently running a few weeks late. The generation production plan is being optimised to minimise as far as possible the impact of the projected delay on the system."

Koeberg 2 will then undergo a similar outage for refuelling, maintenance and steam generator replacement starting in "the later part of this year". This is expected to last 180-200 days.

In 2014, Eskom signed a ZAR4.4 billion (USD240 million) contract with Areva - now Orano - to design, manufacture and install the replacement steam generators, which each weigh over 320 tonnes and are 22 metres long. They have been made in China under subcontract by Shanghai Electric Power Equipment Company.

The work being done at Koeberg is part of activities to enable the plant to operate for another 20 years beyond its current licence, which expires in 2024-2025. The formal application to extend the operating licence was submitted to South Africa's National Nuclear Regulator in 2021, and Eskom submitted the safety case for long-term operation in support of the application in July 2022. The regulator has two years to conclude the review and provide an outcome, but no safety concerns have been identified that would preclude long term operation, and the company anticipates receiving the licence to operate beyond 2024.

"In accordance with the safety analysis that was performed and submitted to the National Nuclear Regulator in support of the application to extend the plant life by 20 years, the steam generators are the last large component replacements that are needed to ensure Koeberg can operate safely for the requested additional period of operation," Eskom said. "Thus, Eskom sees this milestone as an important step on the path to safely extending the life of Koeberg."

The twin 930 MWe (net) pressurised water reactors at Koeberg were built by Framatome, with unit 1 beginning commercial operation in 1984 and unit 2 the following year. They generate about 5% of the country's electricity.

Researched and written by World Nuclear News

Hot functional testing begins at Vogtle 4

21 March 2023

Georgia Power has announced that the last series of major tests ahead of initial fuel load is under way at the second new nuclear unit at the site near Waynesboro, Georgia.

Vogtle 4 pictured in February (Image: Georgia Power)

Hot functional testing verifies the successful operation of reactor components and systems together and confirms the reactor is ready for fuel load.

Tests are carried out under the temperatures and pressures that the reactor systems will be subjected to during normal operation, but without nuclear fuel inside the reactor. Heat generated by the unit's four reactor coolant pumps will be used to raise the temperature and pressure of plant systems to normal operating levels, Georgia Power said. Once these are achieved and sustained, the unit's main turbine will be raised to normal operating speed using steam from the plant. During the series of tests, nuclear operators will be able to exercise and validate procedures as required ahead of fuel load.

Construction of Vogtle 4 - the second of two Westinghouse AP1000 units at the Vogtle site, already home to two operating pressurised water reactors - began in November 2013. Timelines issued by the company earlier this year have suggested that fuel loading is envisaged in June, and the company says it is projected to enter service in "late fourth quarter 2023 or first quarter 2024".

Vogtle unit 3 reached first criticality earlier this month.

Southern Nuclear will operate the new units on behalf of co-owners Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities.

Researched and written by World Nuclear News

Deep borehole disposal suitable for some UK wastes, report finds

21 March 2023

Deep borehole disposal cannot replace the UK's need for a geological disposal facility (GDF) but may nevertheless have a helpful role to play in the disposal of some of the country's nuclear waste inventory, according to a study conducted by Deep Isolation on behalf of the UK's Nuclear Decommissioning Authority (NDA).

Deep Isolation's concept for the disposal of nuclear fuel and high-level waste (Image: Deep Isolation)

The purpose of the study is to provide NDA with information that enables it to assess the potential suitability of
Deep Isolation's directional borehole disposal solution for elements of the UK's radioactive waste inventory.

Deep Isolation's solution for the management of used nuclear fuel and high-level radioactive waste involves emplacing it in corrosion-resistant canisters placed in deep horizontal drillholes. The technology uses existing directional drilling technology. The waste can be retrieved during a determined time frame or permanently secured. In 2019, Deep Isolation publicly demonstrated its concept when it successfully placed and then retrieved a prototype nuclear waste canister hundreds of metres underground via a borehole.

The study found that 63% by volume of the UK's Inventory for Geological Disposal (IGD) is intrinsically not compatible with borehole disposal. A further 26% can in principle be transferred to Deep Isolation disposal canisters for borehole disposal, but the existing plans for disposal in a mined repository are likely to be more cost-effective. This leaves 11% of the IGD that, based on this preliminary study, is operationally and commercially suitable for disposal in a deep borehole repository. This comprises all the UK's high heat generating waste (HHGW) - accounting for 96% of NDA's forecast for radioactivity levels of the IGD in 2200.

Deep Isolation developed 15 scenarios, which show its estimated, unvalidated cost of disposing all the UK's
HHGW and also selected sub-sets. These describe how costs vary across geological environments, and between single site and multi-site approaches. The scenarios for disposing 100% of HHGW show estimated costs between GBP2.98 billion and GBP4.45 billion (USD3.64 billion and USD5.44 billion). More narrowly focused scenarios show that all the UK's legacy used fuel can be disposed of for GBP1.0-1.4 billion and all high-level waste for GBP256-288 million.

"Further work is needed to evaluate the impact of such an approach on the overall costs, benefits and risks of the UK's integrated waste management strategy," the study concludes.

Deep Isolation's recommendations to NDA include: undertaking more detailed business case work to assess the possible role for the technology as part of the NDA's integrated waste management strategy; and engagement in international collaboration on demonstration of deep borehole technology.

Nuclear Waste Services (NWS), which is responsible for the delivery of the UK's GDF, said it "recognises the insight afforded by Deep Isolation's study and will continue to engage with such developments, while recognising that a GDF will still be required for the majority of the UK higher activity waste inventory, even when Deep Isolation's directional borehole technology is developed to sufficient maturity for potential implementation".

It added: "In line with government policy, NDA and NWS continue to review new and emerging technologies which could have the potential to improve the long-term management of some of the UK's higher activity radioactive wastes."

"We are excited to have delivered this project for the UK's Nuclear Decommissioning Authority," said Deep Isolation CEO Elizabeth Muller. "NDA is a global leader, and I welcome their commitment to exploring the benefit of new and innovative options for nuclear waste disposal."

Researched and written by World Nuclear News