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Annmarie Fertoli: The Dow drops more than 540 points as investors prepare for Friday's monthly jobs report. Plus, President Biden unveils his budget plan and braces for battle in Congress. And GOP lawmakers seek more details on US aid to Ukraine.
Lisa McClain: How can we be sending billions of dollars to another country when we need help in our country and our financial health is a mess?
Annmarie Fertoli: It's Thursday, March 9th. I'm Annmarie Fertoli for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that moved the world today. US stocks turned sharply lower and ended the day with losses ahead of tomorrow's jobs report. The Dow fell more than 500 points for the second time this week. The decline comes after the weekly jobless data showed unemployment claims remain historically low. Given strong economic data to start the year, Fed Chair Jerome Powell said officials are keeping their options open regarding the size of rate increases.Amid the broad route across financial stocks, the nation's four largest banks lost $52 billion in market value in trading today. JPMorgan Chase had the steepest losses at about $22 billion, followed by Bank of America, Wells Fargo and Citigroup. President Biden has unveiled his $6.9 trillion budget plan. It calls for reducing federal deficits by $3 trillion over the next 10 years and more than $4.5 trillion in tax increases on high income individuals and large corporations. Our White House reporter, Andrew Restuccia, says the plan is likely to face significant challenges in Congress.
Andrew Restuccia: Republicans have already signaled their opposition to the proposal. They are opposed generally to tax increases of any kind. So this is going to kick off a months long process where appropriators and budget committee members get together and try to find some common ground on their divergent views of how the federal government should work.
Annmarie Fertoli: Republicans have also called for unspecified spending cuts as a condition for raising the federal debt limit. President Biden has said he will not negotiate over raising the debt limit and that Congress should do so without conditions. Although Biden's plan is unlikely to be enacted, it's considered a preview of themes he'll focus on during his expected reelection campaign. During a Senate hearing today, Andy Shaw, the CEO of Railroad Norfolk Southern apologized for the train derailment last month that spilled toxic chemicals into the small town of East Palestine, Ohio.
Andy Shaw: I am determined to make this right. Norfolk Southern will clean the site safely, thoroughly, and with urgency. You have my personal commitment. Norfolk Southern will get the job done and help East Palestine thrive.
Annmarie Fertoli: Lawmakers pushed for the company to commit to paying the full cost of cleanup and make changes to prevent future accidents. They're also proposing legislation to create stricter regulations on railroads. Shaw said Norfolk Southern had committed more than $20 million, what he called just the down payment to help families impacted by the accident. The National Transportation Safety Board has opened an investigation into the company's safety culture. Federal officials say the derailment occurred after a wheel bearing on a hopper car overheated and failed. Former Goldman Sachs Banker Roger Ng was sentenced to 10 years in prison for helping to loot billions of dollars from Malaysian sovereign-wealth fund 1MDB. He was convicted last year of conspiring with a financier and Goldman partner to pay off officials for lucrative contracts with the fund.The US district judge called the scandal one of the biggest financial crimes in history. It was a black mark for Goldman Sachs, which paid more than $5 billion in penalties to the US and Malaysia. And General Motors is offering voluntary buyouts to all US white collar employees who have been at the company for at least five years as of June 30th. That applies to the majority of the automaker's roughly 58,000 salaried US employees. The buyouts are part of a broader effort by the company to cut $2 billion in costs by the end of 2024. It's the latest in a series of auto industry cuts as car companies coming off a period of robust profitability prepare for an economic downturn.Coming up, why some lawmakers are asking questions about US aid to Ukraine. More after the break. As Russia's war in Ukraine continues, questions are being raised about Washington's financial support to Kyiv, particularly from congressional Republicans. The US Congress has approved more than $113 billion for Ukraine since the war began just over a year ago. And the Chair of the House Oversight Committee, James Comer, sent a letter to the Biden Administration asking for more details on how that money is being spent. The administration responded with an offer to brief the committee later this month. Our DC reporter, Daniella Cheslow, has been speaking with lawmakers, asking questions about the support and the Ukrainians who receive it, and she joins me now with more. Welcome back, Daniella.
Daniella Cheslow: Hello, Annmarie. Good to be here.
Annmarie Fertoli: So Daniella, let's set the stage here. We know the US has been sending Ukraine military equipment including weapons and ammunition, but it is far more extensive than that.
Daniella Cheslow: That's right. Russia's assault on Ukraine devastated the economy. Ukraine's economy shrank by about 30%. And now the US, the European Union and other allies are helping cover Ukraine's budget while Kyiv puts its tax revenues toward the battle. So in practical terms, that means Americans are paying the salaries of more than half a million Ukrainian healthcare workers, like doctors, nurses, and first responders, according to USAID. US funding's also being used to pay salaries of more than 600,000 teachers, school workers and professors, and more than 150,000 civil service employees. Now, the World Bank is handling the transfer of US and European funds to Ukraine. And the head of the bank's Ukraine desk, Arup Banerji told me the thinking is those salaries are critical to Ukraine's recovery.
Arup Banerji: The research shows that one of the major ways in which a war-torn country can recover fast is that the government institutions and the social payments are actually preserved during war.
Daniella Cheslow: He says the bank can trace the funds from the Ministry of Finance in Ukraine directly to the recipients, but it is a colossal effort. And Banerji told me it's the largest effort the World Bank has ever done.
Annmarie Fertoli: So Daniella, how is this type of support playing out on Capitol Hill right now?
Daniella Cheslow: It's a mix. You have the bipartisan Congressional Caucus for Ukraine Co-Chair Marcy Kaptur, she's an Ohio democrat, she wrote to me saying she thinks all aid to Ukraine should continue and she could even see an increase in non-military support to help Ukraine rebuild. But you're also seeing public opinion cracking a little bit. A Pew Center poll from late January showed that a quarter of Americans think that we're providing too much aid to Ukraine. And among Republicans, that number goes up to 40%. GOP Congresswoman Lisa McClain of Michigan told me her constituents are asking questions about accountability and when the war will end.
Lisa McClain: How can we be sending billions of dollars to another country when we need help in our country and our financial health is a mess? That's number one. Number two is, the other bucket is it feels like we're in another never ending war without a clear objective.
Daniella Cheslow: McClain signed that letter you mentioned above that was authored by the Republican Chair of the House Oversight Committee, James Comer. He was asking the Defense and State Departments and the US Agency for International Development, USAID, for information about where and how aid to Ukraine is being spent. Those agencies sent a letter back this week offering a briefing. And the inspector general from those agencies just went to Kyiv in late January to meet with Ukraine's government. This week, we saw lawmakers from both parties ask Secretary of State Antony Blinken to make it possible for inspector general staff to spend more time in Ukraine to conduct their oversight.
Annmarie Fertoli: So how has Ukraine responded to all of this?
Daniella Cheslow: Ukraine is aware it has a reputation challenge. Transparency International, based in Berlin, ranked Ukraine 116th out of 180 countries in its Corruption Perceptions Index last year. On Monday, Ukraine appointed an anti-corruption chief. And President Volodymyr Zelenskyy has fired almost a dozen senior people in his administration on suspicion of bribery and embezzlement. Marcin Walecki is the Ukraine Director for the National Democratic Institute based in DC. His group surveyed about 2,500 Ukrainians in January and found that since the war started, about 30% of Ukrainians went without salaries occasionally or often. But for the public sector, which is funded by foreign aid, the percent drops down to nine. And Walecki saw that as an indication that American funds are going to the right place and that Ukraine's anti-corruption push is working.
Marcin Walecki: Time is needed. Those institutions will not be able to act immediately. But there is now a critical anti-corruption infrastructure in place. And there's a very strong public support for anti-corruption efforts.
Daniella Cheslow: Walecki spoke to me this morning from Kyiv, and he warned me he might have to go to a shelter during the interview. It was a reminder that Ukraine is dealing with blackouts and physical damage from Russia's strikes that can make transparency harder to achieve.
Annmarie Fertoli: So I'm wondering, are Ukrainians who get paid via this mechanism worried now?
Daniella Cheslow: I spoke this morning to Serhiy Kubansky, he's president of the Council of Kyiv City's Health Workers' Union, which has about 57,000 members. And he told me with the help of a translator that US support is critical to keeping Ukraine's healthcare system running. Losing that aid was unthinkable.
Translator: He can't imagine this because it can lead to a collapse of healthcare system in Ukraine.
Daniella Cheslow: The US aid spokesperson told me the US has promised budget support to Ukraine through September. And Republican leadership, including Senate Minority Leader Mitch McConnell, say the US support for Ukraine isn't going anywhere. But I think we can expect more questions about this aid going forward.
Annmarie Fertoli: I've been speaking with Daniella Cheslow, our DC reporter. Daniella, thank you so much.
Daniella Cheslow: You're welcome. Thank you.
Annmarie Fertoli: And finally, a new superconductor. A material that can conduct electricity without any energy loss could have a big impact on energy efficiency. In a new study published in Nature this week, researchers say they've discovered a method to create a superconductor that can operate at room temperature and at a much lower pressure than previously discovered superconducting materials, which normally require extreme cold and pressure to work. Our science reporter, Aylin Woodward, says the production of the first commercially accessible superconducting material could have many applications.
Aylin Woodward: Neat thing about so-called superconductors is they have the potential to make the batteries in your cell phone or your laptop be more efficient, last longer. You could utilize them in magnetically levitating trains, but those trains would be cheaper and they would be easier to build and maybe we'd see more of them across the world than just in Asia right now. And you could have a superconducting power grid that could store regular electricity or solar or wind energy. And the cool thing about superconductors is that they can store energy for an indefinite period of time, and then transferred over fast distances without a loss, which isn't what our current power grids are like.
Annmarie Fertoli: And that's What's News for this Thursday afternoon. We'll be back tomorrow morning. If you like what you hear, please rate and review us. I'm Annmarie Fertoli for the Wall Street Journal.
