Good morning and we start with another big step forward for Joe Biden’s flagship climate, tax and healthcare legislation.
Last night Kyrsten Sinema, the Senator from Arizona, expressed support for the plan following days of heated intraparty negotiations.
Sinema’s backing was clinched after a last-minute change to the bill introducing a 1 per cent excise tax on share repurchases by large companies. A measure cracking down on preferential treatment of private equity and hedge fund profits known as “carried interest” was scrapped.
The deal paves the way for the first procedural vote on the bill in the upper chamber of Congress as soon as Saturday. Final passage of the bill in the Senate is possible by the end of the weekend, Democrats said, before it is taken up by the House of Representatives.
If enacted, the bill would invest $369bn in clean energy incentives designed to boost the fight against climate change, as well as measures to lower the cost of prescription drugs by empowering the government to negotiate prices. It would also impose a 15 per cent minimum tax on large corporations, helping reduce the budget deficit by $300bn over the next 10 years.
The deal with Sinema followed an agreement last month with Joe Manchin, the West Virginia senator and another Democratic holdout.
The legislation is fiercely opposed by corporate America and congressional Republicans, who have criticised it for being an extension of Biden’s 2021 spending policies that they blame for overheating the economy.
How well did you keep up with the news this week? Take our quiz. Thanks for reading FirstFT Americas and have a great weekend — Gordon
Five more stories in the news
1. China’s war-games enter second day Chinese warplanes and warships entered Taiwan’s waters today, according to the country’s defence ministry. The breaches come a day after China fired 11 ballistic missiles into waters close to Taiwanese ports to punish the country for hosting a visit by US House Speaker Nancy Pelosi. Pelosi met Japanese prime minister Fumio Kishida today, hours after some of the Chinese missiles strayed into Japanese territorial waters.
2. Russia ready to discuss prisoner swap after Griner sentenced Russia indicated today that it was ready to discuss a prisoner swap with the United States in private, according to foreign minister Sergei Lavrov. Yesterday Russian prosecutors sentenced US basketball star Brittney Griner to nine years in prison on charges of drug smuggling.
3. Europe and Asia intensify battle to secure gas supplies Japan and South Korea, the world’s second and third-biggest importers of liquefied natural gas, are intensifying their efforts to secure supplies out of fear of being priced out later in the year as Europe seeks to replace energy from Russia.
4. Bank of England predicts deep recession The Bank of England yesterday raised interest rates by the biggest amount in 27 years but it was the commentary from the UK’s central bank that shocked investors and economists. It said Britain faced a protracted recession and the worst squeeze on living standards for more than 60 years as it predicted inflation would top 13 per cent by the end of the year.
5. Coinbase forges BlackRock deal over crypto access Coinbase has announced a deal with BlackRock that will give the asset manager’s clients easier access to digital asset markets, in the latest sign of traditional investors dabbling in cryptocurrencies. For premium subscribers only we have launched a new weekly cryptocurrency newsletter. Sign up here.
The days ahead
Economic data Jobs data from the US labour department today is expected to show hiring slowed last month, the latest sign of easing demand for labour owing to high inflation, tighter monetary policy and waning fiscal support. Canada’s unemployment rate is expected to move slightly higher, to 5 per cent from 4.9 per cent the previous month, according to economist estimates from Refinitiv.
Company earnings Data storage and hard disc drive maker Western Digital and sports betting company DraftKings report before the market opens. Warren Buffett’s Berkshire Hathaway reports tomorrow.
Erdoğan meets Putin Turkish president Recep Tayyip Erdoğan will meet his Russian counterpart Vladimir Putin in the Black Sea resort of Sochi to discuss military co-operation.
What else we’re reading
Market rally delivers hard lessons Oh, poor fund managers. Why the long faces? July was one of the best months of all time. But it might not be the rebound we’ve all been waiting for. Too much money has been tied up in a safe hidey hole and too little deployed on the upswing, writes Katie Martin.
Conspiracy theorist ordered to pay $4.1mn to parents of Sandy Hook victim A court in Texas yesterday ordered far-right conspiracy theorist Alex Jones to pay $4.1mn in damages to the parents of a Sandy Hook shooting victim. While the firebrand has courted controversy for more than two decades on his website InfoWars, the Sandy Hook action is the first big legal reckoning for Jones’s media business.
Ukrainian refugees relying on the kindness of strangers More than 6mn people have fled Ukraine since Russia invaded. Hundreds have shared their stories with the Financial Times of the anxiety of fleeing a war zone, the difficulty of adjusting to unfamiliar countries and their hopes for the future. Hardship, heartache and uncertainty were constants, but so too were acts of kindness.
Britain’s anxious generation Across the country, schoolchildren this year are probably the most fragile, inadequately prepared and unhappy group ever to collect A-level results. Lucy Kellaway explains why, and what schools are doing to tackle a looming mental health crisis.
Wildfires consume almost all forest carbon offsets in 100-year reserve Wildfires have depleted almost all of the carbon credits set aside in reserve by forestry projects in the US to protect against the risk of trees being damaged over 100 years, a new independent study has found.
Tributes poured in this week for basketball legend Bill Russell, who died aged 88. He was the most successful professional ever to play the game, with 11 championships in 13 years, two collegiate titles and an Olympic gold. But the former Celtics’ star was more than a sporting legend — he was also a great campaigner for social justice.