News and Featured image

Some of the code you have in here is really outdated and has been deprecated for quite some time. I am going to use updated code so that it’s more useful to those who will stumble on this thread.

<div class="news_item">
    <?php 
    $posts = get_posts( 'numberposts=2&order=DESC&orderby=post_title&category_name=news' );

        foreach ( $posts as $post ) : setup_postdata($post);  ?>
            <?php toolbox_posted_on();

            //Check if post has thumbnail 
            if ( has_post_thumbnail() ) :

                //Output img tag automatically
                the_post_thumbnail();

            //Output
            ?>
            <?php endif; ?>
            <h4>
                <a href="https://wordpress.stackexchange.com/questions/179548/<?php the_permalink() ?>" title="<?php the_title(); ?>">
                    <?php the_title() ; ?></a>
            </h4>
        <?php endforeach;
        wp_reset_postdata(); ?>
</div>
<a href="#" class="btn blue">Read All News</a>

Your CSS

.news_item {
    float: left;
    padding: 5px;
    width: 33.33%;
}