Economy & business

A Guide to US Federal Budget Process

Here’s a look at how the U.S. government’s budget is drawn up and approved:

— The process starts with the submission of the president’s annual budget request to Congress. Traditionally, this is done on the first Monday in February. The president’s budget request details the administration’s position on a full range of federal revenue and spending questions for the coming fiscal year, which begins October 1.

— Based on the president’s proposal, the budget committees in the House and the Senate each write and vote on their own budget resolutions, which serve as a framework for budget decisions. The resolutions set spending limits but do not decide on specific spending for each program. Each resolution is sent to the floor for a vote.

— The budget appropriations committees in the House and Senate divide the discretionary spending set forth in the budget resolutions among each of their 12 subcommittees. The subcommittees cover different areas of the federal government, such as spending on the military or on energy programs. Each subcommittee conducts hearings in which members pose questions to leaders of the relevant federal agencies about each agency’s requested budget. Each subcommittee holds hearings on the programs and then votes on an appropriations bill, abiding by the spending limits set out in the budget resolution.

Once the subcommittee passes a bill, it goes to the full Appropriations Committee. The full committee reviews it and then sends it to the full House or Senate.

— The full House and Senate then debate and vote on appropriations bills from each of the 12 subcommittees. After both houses of Congress pass their versions of each appropriations bill, a conference committee meets to resolve differences between the House and Senate versions.

After the conference committee produces a reconciled version of the bill, the House and Senate vote again, but this time on a bill that is identical in both chambers. The reconciled bill is then sent to the president for his approval.

— The president must sign each appropriations bill after it has passed Congress for the bill to become law. When the president has signed all 12 appropriations bills, the budget process is complete.

Science & Health

Snooze News: Elephants May Sleep Less Than Any Other Mammal

There’s an old saying that elephants never forget. You also can say they almost never sleep.

Scientists on Wednesday said a first-of-its-kind study tracking the sleep behavior of wild elephants found the world’s largest land mammal sleeps two hours per day on average, and some days not at all, and does so mostly standing up.

This represented the shortest-known sleep time of any mammal. Previous research showed captive elephants got four to six hours daily.

“Sleep needs to be studied in an animal’s natural environment if we are truly to understand it,” said Paul Manger, a research professor in the School of Anatomical Sciences at the University of the Witwatersrand in South Africa who led the study published in the journal PLOS ONE.

The researchers monitored two free-roaming female African elephants in Botswana’s Chobe National Park for 35 days. They got data to track sleep accurately from a wristwatch-sized device implanted under the skin of the trunk that was not harmful to the animals. They used a satellite-tracking collar with a gyroscope to monitor their location and sleep position.

“We do feel these two elephants are representative of the broader population,” Manger said, adding he hoped future research could be done with larger numbers of wild elephants, including males.

The elephants sometimes went up to 46 hours without sleep while walking distances of about 19 miles (30 km), possibly to avoid threats like lions or human poachers.

They typically slept somewhere between 2 a.m. and 6 a.m. After a sleepless night, they had no extra sleep the next night.

The maximum sleep recorded was five hours in a day. They spent just 17 percent of their sleeping time lying down.

The next shortest sleepers among mammals may be domestic horses, which get under three hours daily. Some mammals have been shown in captivity to sleep most of the day, including the little brown bat (19 hours), opossum (18 hours) and armadillo (17 hours), Manger said.

People average roughly six to nine hours, Manger said.

The elephants appeared to experience rapid eye movement (REM) sleep, associated with more dreaming and body movements and loss of muscle tone, only every three to four nights.

“REM sleep is often associated with the consolidation of memories. However, we do know elephants have good memories, so this finding contradicts one central hypothesis of REM sleep function,” Manger said.

Arts & Entertainment

Accountants Blamed for Oscar Blunder Will Not Work Ceremony Again

The organizers of the Academy Awards said Wednesday that the two PricewaterhouseCoopers accountants behind the mix up that saw La La Land incorrectly named best picture before Moonlight was declared the real winner, will not work the Oscars ceremony again.

A spokesperson for the Academy of Motion Picture Arts & Sciences said PwC accountants Brian Cullinan and Martha Ruiz would no longer tabulate Oscar votes and hand out envelopes containing winners’ names at Hollywood’s most prestigious awards ceremony.

The academy has not said whether it will continue its partnership with PwC, which has handled the Oscar tabulation process for 83 years.

A PwC spokesman said Wednesday that Cullinan and Ruiz were still employed as partners at the accounting firm.

PwC had earlier taken full responsibility for the gaffe that stunned the Dolby Theatre crowd in Hollywood and a television audience worldwide.

The onstage blunder was not rectified until the La La Land cast and producers, who were on stage giving their acceptance speeches, caught the mistake and announced Moonlight as the real winners. The mishap was unprecedented for the usually meticulously choreographed ceremony and stole the spotlight from the winners.

Backup envelope

PwC said Cullinan had mistakenly handed presenters Warren Beatty and Faye Dunaway, who were announcing the best picture winner, the backup envelope for Actress in a Leading Role instead of the envelope for Best Picture.

“Once the error occurred, protocols for correcting it were not followed through quickly enough by Mr. Cullinan or his partner,” the accounting firm said in a statement.

Cullinan had posted a now-deleted backstage photo of actress Emma Stone after she won her best actress Oscar on Twitter minutes before the mix-up.

A day after the incident, the academy apologized to all affected, including presenters Beatty and Dunaway, and said it would “determine what actions are appropriate going forward.”

Science & Health

Hundreds of North American Bee Species on Path to Extinction, Study Contends

More than 700 of the 4,000 native bee species in North America and Hawaii are believed to be inching toward extinction because of increased pesticide use leading to habitat loss, a scientific study showed Wednesday.

The Center for Biological Diversity’s report concluded that of the 1,437 native bee species for which there were sufficient data to evaluate, about 749 were declining. Furthermore, 347 of the species, which play a vital role in plant pollination, are imperiled and at risk of extinction, the study found.

“It’s a quiet but staggering crisis unfolding right under our noses that illuminates the unacceptably high cost of our careless addiction to pesticides and monoculture farming,” its author, Kelsey Kopec, said in a statement.

Habitat loss, heavy pesticide use, climate change and increasing urbanization are the main causes for declining bee populations, the study found.

Experts from the center reviewed the status of 316 bee species and then conducted reviews of all available information to determine the status of a further 1,121 species. The center said the species for which data collection was insufficient were also presumed to be at risk of extinction.

Among the native species that are severely threatened are the Gulf Coast solitary bee, the macropis cuckoo bee and the sunflower leafcutting bee, which is now rarely seen.

First endangered bee

Last month, the rusty patched bumblebee was listed by federal authorities as endangered, becoming the first wild bee in the continental United States to gain such protection.

Bees provide valuable services: The pollination furnished by various insects in the United States, mostly by bees, has been valued at an estimated $3 billion each year.

The center’s Kopec noted that almost 90 percent of wild plants are dependent on insect pollination.

“If we don’t act to save these remarkable creatures, our world will be a less colorful and more lonesome place,” she said.

Science & Health

Study: New Minerals Back Idea of Man-made Epoch for Earth

Scientists have identified more than 200 minerals created as side effects of human industries in a sign that mankind’s imprint on the Earth is so deep that it marks a new geological epoch, a study said Wednesday.

Rare chemical combinations such as those found in mines, ore dumps or smelters have triggered the formation of new minerals, it said. One previously unknown mineral crystal, for instance, was found on a wooden pit prop deep in a nickel mine in Russia.

The scientists listed 208 items in the first global catalog of minerals caused exclusively or mainly by human activities, compared to about 5,000 formed by purely natural processes including iron, silicon, gold or silver.

The new minerals, with names including bluelizardite, luckite or kokinosite, add to other evidence that mankind is leaving an indelible mark in geological records through the use of materials such as concrete, pottery, steel and aluminum.

“They form a layer at Earth’s surface,” said Robert Hazen, of the Carnegie Institution for Science in Washington, D.C., who led the study of new minerals. “If you came back a million years or 10 million years from now, you would find this layer.”

Many scientists favor designating a new epoch in the Earth’s history called the Anthropocene — an epoch dominated by man, or “anthropos” in Greek. It would succeed the Holocene, the epoch that began 11,500 years ago when the Ice Age faded.

“Mineralogy supports the idea of the Anthropocene epoch,” Hazen told Reuters of the findings published in the journal American Mineralogist.

Mankind’s impact on minerals has been the greatest since an increase in oxygen in the atmosphere more than 2.2 billion years ago gave rise to hundreds of new minerals such as oxides of iron and manganese, the scientists said.

Minerals “add another argument to recognize the Anthropocene as an epoch,” said Colin Waters of the British Geological Society, who is secretary of the international Anthropocene Working Group and was not involved in Wednesday’s study.

Many experts favor the mid-20th century as the start of the Anthropocene, partly because fallout from U.S. atomic bombs dropped on the Japanese cities of Hiroshima and Nagasaki and nuclear tests left traces around the planet, he said.

It will take years for experts to decide if the Anthropocene is a new epoch, and when it should start, he told Reuters.

Economy & business

Czech Firms Plot Successions as Post-Communist Founders Retire

Vladimir Jehlicka and his business partners spent 25 years building up their Czech machinery firm before deciding to call it a day.

However, they faced a problem that is growing as the first generation of post-communist entrepreneurs nears retirement.

Their children weren’t interested in running the shop but equally Jehlicka and his three partners didn’t want to sell their life’s work simply to the highest bidder: securing a future for the firm was as important as the sale price.

In the end they found a suitable buyer for STS Olbramovice, which employs 90 people making cattle feeders and other farm machinery. The sale went through in January, part of a business that is long-established in western Europe but new and rapidly expanding in former communist countries such as the Czech Republic: managing ownership succession at family firms.

“We decided to sell after a long hesitation,” 63-year-old Jehlicka said. “Our children’s focus is very varied, there was no interest to take over running the firm.”

“Our main criterion for picking a future owner was a pledge to maintain production and jobs,” he told Reuters.

Four decades of communism largely eliminated legal private enterprise in the country and its neighbors such as Hungary, Slovakia and Poland. But after 1989, managers or employees often clubbed together to buy frequently decrepit state enterprises, while other entrepreneurs started businesses from scratch.

A quarter century later, many of these owners now need to hand over what have become valuable firms. Some find successors in the family; most look for other options including management buy-ins or a sale, creating an opportunity for investors.

Sales of family firms are in vogue. Consultants KPMG said they accounted for 30-40 percent of the Czech transactions it took part in over the last two years in the 20 million-60 million euro range.

The country’s small bourse and cheap acquisition financing mean direct sales are preferred to stock market floats.

The trend is likely to accelerate in Slovakia as well.

“This is a transition from the first founder generation to the second. In several firms it is already happening, in most it will happen in the upcoming period,” said Mario Fondati, a Bratislava-based partner at Amrop consultancy.

A good match

Jehlicka’s firm, based in the village of Olbramovice about 50 km (30 miles) south of Prague, has annual sales of 5 million euros ($5.3 million) and EBITDA operating profits nearing half a million euros. In SkyLimit Industry it believes it has found a buyer that is a good match.

SkyLimit is a new Czech investment fund that targets machinery-making firms facing generational change, with up to 500 million crowns ($20 million) in annual sales. It took on another fund, RSJ Investments SICAV, as a junior partner in buying STS Olbramovice.

SkyLimit says it wants to keep its holdings for the long term, acting more like a strategic investor, and help company managements in making major decisions.

STS was its first transaction — it says only that the price was in the single millions of euros — and plans about two to three purchases a year to build a group of manufacturing firms.

The fund’s board member Michal Bakajsa told Reuters that smaller industrial companies in the sector can be found at lower multiples of their operating earnings than bigger firms. It aims to assure sellers of their businesses’ future and make sure there are managers who will stay on under the new ownership.

“Many companies reject classic financial investors, they fear what would happen with them. Many are in smaller towns, the people know each other, the owners employ people for many years, they are often friends,” Bakajsa said. “We look at companies that have in some way an independently functioning management, where the company does not stand and fall with the owner.”

Petr Kriz, head of mergers and acquisitions at consultancy EY in Prague, said there were 310 M&A transactions in the Czech market last year, up from 185 in 2015. A few dozen were related to succession, with the market in general lifted by a surplus of liquid capital.

A survey by the Czech Association of Small and Medium-Sized Enterprises among 400 family-type companies last year showed 60 percent would consider a sale if an attractive offer comes.

A fund run by Genesis Capital bought 75 percent last year in Quinta-Analytica, a firm supplying analysis and clinical studies for drug makers. Genesis bought the stake from three out of five owners who wanted to exit after 20 years in the business.

“[Generation shift] is an important and large share of deal origination for us,” said Genesis Capital’s managing partner Jan Tauber. “What we can offer is creating structures allowing owners to depart gradually.”

Last year Genesis sold AZ Klima, an air conditioning and cooling systems supplier, along with the firm’s founder Jiri Cizek who still held a 30 percent stake. AZ Klima’s purchase by Czech energy firm CEZ completed a five-year ownership transition: from Cizek and his partner, who together built up the firm in the early 1990s, through the financial investor Genesis to the strategic buyer CEZ.

Money-printing contest

Some entrepreneurs are reluctant to invest their wealth outside the companies they founded at a time when the loose monetary policies of the U.S. Federal Reserve, European Central Bank and Czech National Bank make good returns hard to achieve.

Zbynek Frolik, 63, founded Linet in 1990 and now employs 900 people making hospital beds for customers in over 100 countries.

He has handed over daily business to an executive director and is considering what to do next, but is not selling his 33 percent stake for now.

One reason is that the best way he knows to manage his money is to invest it back into his own business. In his experience, putting it elsewhere doesn’t work.

“You’d have to be solving the problem of what to do with money at a time when the Czech National Bank, the ECB and the Fed are all printing money like it was a contest, and everyone is looking where to invest,” he said.

Still others are looking at a philanthropic exit, such as Dalibor Dedek, 59, who founded the Jablotron group in 1990. He sold a 40 percent stake in the firm, which employs 600 making house alarms and other electronics, to its executive manager Miroslav Jarolim last year. Dedek plans to hand the rest to a charitable body and not his children.

“I want my share to be put into some foundation or an institution that will not die with me,” he told Reuters. “I did not build the firm for the family. I do not want to punish my children by forcing them to deal with money problems.”

Economy & business

Trump Administration Calls for Tougher Stance on Trade Deals

Trump administration officials say it is time for a “more aggressive approach” to trade negotiations and enforcement.  

Wednesday’s 2017 Trade Policy Agenda says Washington will strongly defend U.S. sovereignty in trade issues, strictly enforce trade deals, protect U.S. intellectual property, and negotiate “new and better trade deals with countries in key markets around the world.”

The report by the staff of the U.S. Trade Representative says U.S. exports are hurt when some trading partners restrict the flow of digital data, create unnecessary regulations, manipulate their currencies, steal trade secrets or unfairly subsidize their companies.  The report’s authors say these tactics may give an unfair advantage to companies in non-market economies.

U.S. officials say they will fight back by emphasizing deals with one nation at a time rather than multilateral pacts like the World Trade Organization.  

White House officials say voters in the last election called for “fundamental” changes that expand trade that is “freer and fairer for all Americans.”

Arts & Entertainment

Lady Gaga Replaces Pregnant Beyonce at Coachella Music Festival

Lady Gaga will step in for Beyonce at this year’s Coachella music festival after the R&B singer, who is pregnant with twins, dropped out of her headlining slot due to doctor’s orders.

Gaga, 30, made the announcement late Tuesday on her social media pages with an image of the three-day lineup at the festival, her name at the top of the second day’s schedule, accompanied by the caption, “Let’s party in the desert!”

Beyonce, 35, was due to headline the annual Coachella Valley Music & Arts Festival in the Southern California desert on April 15 and April 22. She pulled out last week, saying in a statement that she was “following the advice of her doctors to keep a less rigorous schedule in the coming months.”

Gaga’s Coachella headlining slot follows her performance at February’s Super Bowl, where she sang, danced and soared over the stage suspended on cables, delivering a flawless choreographed medley of her hits that include “Poker Face” and “Born This Way.”

The singer is also due to kick off her world tour in support of her latest album “Joanne” in August.

Coachella is the first major U.S. festival of the summer live music scene and hosts two consecutive weekends of the same line-up.

Beyonce and her rapper husband Jay Z, who have a five-year-old daughter Blue Ivy, have not said when the twins are due. The singer said she’ll headline Coachella next year.