We have the details on how Schumer and Manchin secretly worked to revive the climate and tax spending bill. We’ll also look at the most recent inflation data and big oil’s huge profits.
But first, find out whether Democrats or Republicans won the most important baseball game.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Inside the secret Manchin-Schumer deal
Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Charles Schumer (D-N.Y.) reached their agreement on a major tax and climate package Tuesday evening but kept it a closely guarded secret — giving Democrats just enough time to pass a $280 billion chips and science bill that Republicans would have otherwise blocked.
The announcement of the deal, which would raise $739 billion in new tax revenue, fund an array of new climate provisions and pay down $300 billion of the federal deficit, came as a complete surprise to their Senate colleagues.
“I’d say it’s somewhere between a surprise and a shock,” said Sen. Chris Murphy (D-Conn.).
- Less than two weeks earlier, talks between Schumer and Manchin fell apart in dramatic fashion and the Democratic leader accused Manchin of “walking away.”
- The two reconvened in secret on July 19 and finally hashed out a deal on Tuesday evening prior to Wednesday’s announcement.
- They agreed to pay for climate and health care investments with a 15 percent corporate minimum tax on large companies, beefing up IRS enforcement of tax compliance and closing the carried interest loophole.
Alexander Bolton details the top-secret negotiations here.
Democrats aren’t out of the woods yet: They’re still waiting to hear from Sen. Kyrsten Sinema (D-Ariz.), who was left out of the last-stage negotiations between Manchin and Schumer and last year opposed doing away with the carried interest tax loophole. Sinema’s office said she’s reviewing the text and will need to see what comes out of the parliamentarian process.
HIGHER AND HIGHER
Fed’s inflation gauge jumped in June as gas prices soared
A June surge in gasoline prices fueled much higher inflation and a dip in household spending power, according to data released Friday by the Bureau of Economic Analysis (BEA).
- The personal consumption expenditures (PCE) price index, a key gauge of inflation, rose 1 percent in June and 6.8 percent annually last month, according to the BEA.
- The monthly inflation rate rose from 0.6 percent in May and the annual inflation rate rose from 6.3 percent that month.
Economists expected the PCE price index to show another big jump in inflation in June, a month when the average cost of a gallon of gas in the U.S. rose above $5.
- The war in Ukraine and the resultant sanctions imposed on Russia have limited the global supply of oil and natural gas — along with food and other commodities — making prices higher and more volatile.
- High energy and food prices also can boost inflation throughout the economy as companies try to cover higher transportation, manufacturing and ingredient costs.
But it wasn’t just the “Putin price hike,” as the White House likes to call it. Without food and energy prices, the PCE price index rose 0.6 percent on the month. It had risen by only 0.3 percent in each month since February.
Sylvan has more here.
Big Oil companies post record profits
ExxonMobil, Chevron and Shell posted record profits in the second quarter of 2022 as companies announced earnings this week.
The profits come as the world saw extremely high prices of both oil and gasoline.
- Exxon said Friday that between April and June of this year, it made
$17.9 billion, up from about $5.5 billion during January through March.
- Chevron, meanwhile, made $11.6 billion, up from around $6 billion last quarter.
- Shell made $11.5 billion, up from $9.1 billion the previous quarter.
Rachel Frazin has the figures here.
McCarthy swipes at Pelosi over ban on lawmaker stock trading
House Minority Leader Kevin McCarthy (R-Calif.) took a swipe at Speaker Nancy Pelosi (D-Calif.) on Friday over reports that Democratic lawmakers are planning to introduce a ban on lawmaker stock trading next month.
McCarthy during his Friday press conference said it is not “proper” for Pelosi to write the bill regarding a ban on congressional lawmakers’ stock trading, pointing to investments her husband, Paul Pelosi, a venture capitalist, has made. According to Insider, the couple has attained the vast majority of their wealth through financial transactions made by Paul Pelosi.
Good to Know
A new poll found overwhelming support from voters in both parties for two key antitrust bills that are facing a dwindling deadline to pass this year.
Asked about the American Innovation and Choice Online Act, a bipartisan bill that would limit tech giants from preferring their own products and services over rivals’, nearly 73 percent of respondents said they lean toward supporting the bill.
Here’s what else we have our eye on:
- A group representing gig workers slammed a House bill it said would misclassify workers in a way that would deny them basic labor protections.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you next week.
VIEW FULL VERSION HERE