Month: November 2018

President Trump Signs New Trade Deal with Canada and Mexico

In a major political win at the G20 summit in Buenos Aires, President Trump joined Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto on Friday to sign a new trade agreement replacing NAFTA.

Saying that all three countries will benefit from the United States-Mexico-Canada Agreement, Trump said “it is probably the largest trade deal ever made.”

The USMCA replaces NAFTA, which in 1994 had created a free trade zone between the three countries.

Trudeau said the deal “lifts the risk of serious economic uncertainty that lingers throughout a trade renegotiation process — uncertainty that would have only gotten worse and more damaging if we had not reached a new NAFTA.”

The deal emerged in early October, months after Trump hit Mexico and Canada with tariffs on their steel and aluminum products – a move set off retaliatory tariffs and negotiations to create a new trade pact.

The USMCA — which overhauls the rules covering more than $1.2 trillion in regional commerce — faces major hurdles next year in Congress, where Democrats will control the House and may be reluctant to help Trump to fulfill a 2016 campaign promise.

The deal also must be ratified by lawmakers in all three countries.

And even as Trump, Trudeau and Peña Nieto — on his final day in office —signed the accord on the sidelines of the summit, officials from the three countries continued to haggle over terms for lifting US tariffs, according to The Washington Post.


WEDC Chief Hopes Governor-elect Evers Keeps Job-Creation Agency in Place

It’s not clear whether outgoing Gov. Scott Walker’s Wisconsin Economic Development Corp. will remain intact, but the public-private job creation agency’s chief is making a case to keep it running.

Mark Hogan, the agency’s secretary and CEO, told reporters Tuesday in Beloit that he’s reaching out to Gov.-elect Tony Evers’ transition team to persuade Evers that the 7-year-old agency—known as WEDC—has hit its stride and should remain the state’s main jobs organization.

Hogan’s statements come as Evers signaled last week that he will propose a plan to dissolve the organization. He hasn’t given details on how he might replace the partially taxpayer-funded agency, but he has said he was considering reverting back to the former state Department of Commerce.

It’s not clear whether the Legislature, which is still dominated by Republicans, would go along with a proposal to dissolve the agency.

Hogan, a former banking executive for M&I and BMO Harris, has been at the agency’s helm for the last three years. He believes it should continue to operate under Evers because he thinks it is “nimble” enough to tackle the incoming governor’s priorities.

WEDC spokesman Mark Maley said the state budget has funding in place through part of 2019 for agency programs that are already underway, including a half-dozen job fairs to help place veterans in jobs in Wisconsin.

Other initiatives, such as school technical training programs and a marketing campaign to attract young professionals to move to Wisconsin, are rolling out in Chicago and in 13 other cities in the Midwest, Maley said.

Governor-elect Tony Evers Announces Health Policy Advisory Council

Yesterday afternoon,  Governor-elect Tony Evers announced his Health Policy Advisory Council to bring experienced voices from around the state to work with the transition team on health care issues. The council is a diverse group of health care professionals from rural and urban health care settings and community health advocates.

“Expanding access to affordable health care for Wisconsin residents is a top priority for our administration,” said Evers. “Our Health Policy Advisory Council will help our transition team put together a comprehensive health care plan that takes steps to increase access to health care coverage, like taking the Medicaid expansion dollars, while bringing down costs.”

The council will advise the transition team on policy matters relating to the Department of Health Services, Office of the Commissioner of Insurance, the Department of Employee Trust Funds, and numerous stateboards focused on health care.

Health Policy Advisory Council members:

• Dr. Veronica Gunn, CEO Genesis Consulting
• Karen Timberlake, former Secretary, Wisconsin Department of Health & Human Services
• Candice Owley, Wisconsin Federation of Nurses and Health Professionals, AFT VP, RN
• Dr. Jane Mahoney, Wisconsin Institute for Healthy Aging
• Barbara Beckert, Disability Rights of Wisconsin
• Dr. Dipesh Navsaria, UW Health
• Lisa Peyton-Caire, Foundation for Black Women’s Wellness
• Kofi Short, Diverse and Resilient Community, Wisconsin Health Leadership Fellow
• Tanya Atkinson, Planned Parenthood
• Tim Size, Rural Wisconsin Health Cooperative
• Mary Jo Meyers, Milwaukee County Health and Human Services
• Mary Neubauer, Mental Health America of Wisconsin

Net Lending Shows Ongoing Increases at State-Chartered Banks

Net loans grew by 8.8% at Wisconsin’s state-chartered banks in the nine months ending eptember 30, 2018, according to data released by the Federal Deposit Insurance Corp.

“The steady growth in lending activity is terrific news for the state’s banking industry and for the Wisconsin economy,” said Jay Risch, Secretary of the Department of Financial Institutions (DFI), who oversees state-chartered banks.

Compared to the first three quarters of 2017, Wisconsin’s 158 state-chartered banks:

• Increased net loans to $41.6 billion, up from $38 billion.
• Posted a net income of $486.1 million, an increase of 15.9% from $419.4 million.
• Grew total assets by 7.6%, from $50.9 billion to $55.6 billion.
• Maintained a strong capital ratio of 11.47%, compared to 11.75%.

The continued increase in lending combined with a higher net interest margin were the most significant factors in the strong growth in net income. Total interest income increased by 15.3% for the first nine months of 2018 compared to 2017.

Through the first nine months of 2018, 97% of all state-chartered banks were profitable and nearly 77% realized earnings gains compared to the prior year

Direct Primary Care Arrangements Offer New Way to Pay for Routine Health Care

When it comes to paying for health care, most people pay for and use insurance. But some are dropping their coverage or deciding to use it only for big medical expenses as deductibles and copays rise.

An analysis from JP Morgan Chase & Co. shows Wisconsinites pay more in out-of-pocket costs than those in other states.

“That is resulting in people not seeking the primary care they need because they can’t afford to pay those copays and deductibles. So what we want (is) to create more options,” said Rep. Joe Sanfelippo, R-New Berlin.

The Republican lawmaker intends to reintroduce a bill next session to legally define an arrangement where consumers pay a monthly fee to their family doctor for unlimited routine care.

If successful, it’s a health care model that could shake up the market.

“There is a direct fee for service need that’s spreading across Wisconsin fairly quickly. Nationally, it’s a movement that’s unstoppable,” said Dr. Tim Murray, CEO of Solstice Health, which has clinics in New Berlin and Oconomowoc. Solstice Health does not accept insurance and only takes patients who pay directly for routine medical care and basic lab services.

But insurance companies have concerns about people contracting with a doctor for primary care services. The consumer protections aren’t the same, and insurers argue it doesn’t make financial sense for those who have coverage.

“For many individuals the math just isn’t going to work. If you purchase both a direct primary care arrangement and a comprehensive insurance plan, you’re going to be paying twice for a broad swatch of services,” said Tim Lundquist, director of government and public affairs for the Wisconsin Association of Health Plans.

Still, supporters consider it a way provide more access to preventive care at lower costs.

“This is actually very timely just coming off an election where health care played such a prevalent role in everybody’s campaign from the governor’s race right on down to the seats for Assembly,” Sanfelippo said about his bill, which didn’t pass last session.

The effect of direct primary care on medical costs and patient health aren’t certain because there aren’t a lot of studies on such health care arrangements.

In addition to defining what direct primary care is, Sanfelippo proposes the state create a pilot program to use direct primary care for some Medicaid recipients and integrate it into the state employee health plan.

Governor-elect Evers to Propose to Dissolve WEDC

Gov.-elect Tony Evers said Tuesday that after taking office he will propose to dissolve Gov. Scott Walker’s public-private jobs agency, the Wisconsin Economic Development Corp.

“I think it’s important that economic development be part of state government rather than a public-private partnership,” Evers said.

An Evers spokeswoman declined to address specifics of when and how he will propose to eliminate WEDC. Evers spoke during the campaign about moving economic development functions back to the Department of Commerce, which handled them before the creation of WEDC.

WEDC spokesman Mark Maley declined to comment Tuesday on Evers’ remarks.

Rep. John Nygren, R-Marinette, co-chairman of the Legislature’s budget-writing Joint Finance Committee, posted on Twitter that Evers’ position is “concerning.”

“The public-private partnership WEDC has fostered is crucial,” Nygren wrote. “Reverting back to the ways of the failed Department of Commerce is a recipe for over-burdensome government regulation. This will not only stifle the (Wisconsin) comeback but could end it.”

Wisconsin to See Additional $2.1 Billion in Tax Revenue

The Co-Chairs of the budget-writing Joint Committee on Finance Representative John Nygren (R-Marinette) and Senator Alberta Darling (R-River Hills) released the following statement after revenue projections show Wisconsin has an additional $2.1 billion in revenue:

“This is the best revenue estimate since 2002. We delivered $8 billion in tax cuts and the largest real-dollar increase for public education in state history, and today’s estimate shows we are headed in the right direction.

Governor Walker is leaving Wisconsin in much better fiscal shape than what he inherited. Thanks to our reforms, tax cuts, and common sense budgeting, our state is expected to generate an additional $2.1 billion.

There is no deficit. In fact, Wisconsin is projected to end the current budget with a $662 million surplus. Agency budget requests are just that – requests.

Wisconsin is on the right track and this report proves it. With the amount of money coming into the state, we can continue to fund priorities like education, continue to cut taxes, and balance the budget.”

Wisconsin Home Sales Cool as Inventory Remains Tight

Frustrated buyers, fewer homes and rising prices has been the trend throughout the year in Wisconsin’s housing market. In the fourth quarter, there is no sign the inventory shortages that have caused sales to wane will subside.

Throughout the first 10 months of the year, home sales were down 2.2 percent compared to the same period last year. The median prices were up 6.4 percent to $184,000, according to the Wisconsin Relators Association.

“Inventories remain very tight statewide and it’s still a strong seller’s market in most regions of the state,” Jean Stefaniak, chairman of the WRA Board, said in a written statement.

The state had 4.5 months of supply in October, which is down from 5.2 months in October 2017. It is considered a “balanced” market when there is six months worth of supply. Where there are too few homes for buyers to choose from, which has been the case since last year, it is considered a seller’s market.

David Clark, an economics professor at Marquette University, said one of the reasons fewer homes are on the market is because of baby boomers who did not move 10 years ago, during the Great Recession. Those boomers continue to stay put now as older millennials are looking for homes, Clark said.

“Are those aging baby boomers now going to stay stay in their homes forever? Well not forever, but they may well have decided they will stay put until health situations mandate some type of a change,” Clark said.

Total Household Debt Rises for 17th Straight Quarter

On Friday, the Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $219 billion (1.6%) to $13.51 trillion in the third quarter of 2018. It was the 17th consecutive quarter with an increase and the total is now $837 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008.

The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.  Overarching trends from the Report’s summary include:

Housing Debt

  • Mortgage originations increased to $445 billion from $437 billion in the second quarter.
  • Mortgage delinquencies were roughly flat, with 1.1% of mortgage balances 90 or more days delinquent in the third quarter.

Non-Housing Debt

  • Outstanding student loan debt increased by $37 billion and stood at $1.44 trillion as of September 30.
  • Auto loan balances increased by $27 billion to $1.27 trillion in 2018Q3.
  • Credit card balances rose by $15 billion to $844 billion.

Delinquencies, Collection Accounts, and Credit Inquiries

  • Mortgage delinquency transition rates increased slightly with about 1.2% of current balances transitioning into delinquency.
  • The number of credit inquiries within the past six months—an indicator of consumer credit demand—increased slightly, but remains among the lowest seen in the history of the data.

Wisconsin Unemployment Rate Remains at or Below 3% for Record 9th Straight Month

The Wisconsin Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) revisions for September and preliminary estimates for October covering employment and job statistics for the state. The data showed that Wisconsin’s unemployment rate remained at 3 percent in October, marking the 9th straight month that Wisconsin unemployment rate was at or below 3 percent, a state record.

Wisconsin also added a statistically significant 32,000 private-sector jobs from October 2017 to October 2018. The state also added a significant 20,000 manufacturing jobs over the same time period.

“Wisconsin’s employment situation continues to create more and more opportunities for Wisconsin workers, and with roughly 100,000 available jobs on the state’s website, DWD stands ready to help anyone who is still looking for work, find not only work, but a rewarding career,” DWD Secretary Ray Allen said. “With an unemployment rate of 3 percent, the 9th straight month the state’s unemployment rate has remained at or below the 3 percent threshold, there is no better time to be a job seeker in Wisconsin.”