Congress sends $740 billion tax, health and climate bill to Biden’s desk

Congress sends $740 billion tax, health and climate bill to Biden’s desk

The House of Representatives on Friday passed Democrats’ $740 billion tax, health care and climate bill, which now goes to President Biden’s desk for his signature.Why it matters: The bill’s passage notches a big legislative victory for Democrats with the midterms approaching and delivers on several long-standing liberal policy goals.Driving the news: The bill passed 220-207 with all Republicans voting against it.Details: By far, the largest spending provision in the bill is nearly $370 billion to combat climate change, including tax credits and funding for renewable energy, electric vehicles and energy-efficient home improvements, as well as incentives for companies to cut methane emissions. It also:

  • Extends enhanced Affordable Care Act subsidies.
  • Allows Medicare to negotiate the prices of certain prescription drugs and requires drug companies to pay rebates for raising prices faster than inflation.
  • Imposes a 15% minimum tax on corporations making $1 billion or more in annual profits and a 1% fee on stock buybacks.
  • Invests $80 billion in the Internal Revenue Service to crack down on tax evasion by the wealthy and corporations.

What they’re saying: “This landmark [legislation] that we send to the president’s desk is a resounding victory for America’s families starting at their kitchen table,” said House Speaker Nancy Pelosi (D-Calif.) in a floor speech.Swing-seat Democrats told Axios they think the bill will boost them on the campaign trail.

  • “The prescription drug portions, in particular, are really going to be impactful,” said Rep. Elissa Slotkin (D-Mich.), adding she got almost 1,000 calls in the last few days urging her to vote yes for those provisions, “which is high for us.”
  • But, Slotkin added, the bill won’t just sell itself: “We need to explain it because we live in a world where, if you don’t message, someone else will do it on your behalf.”
  • Democratic Congressional Campaign Committee Chair Sean Patrick Maloney (D-N.Y.) told Axios: “Results get results. … This is going to be a shot in the arm to Democrats everywhere.”

The other side: House Minority Leader Kevin McCarthy (R-Calif.), in a floor speech, called the legislation “the largest tone-deaf bill I’ve ever seen in this chamber in 232 years.”

  • “They are choosing to spend the session by spending half a trillion dollars more of your money, raising taxes on the middle class and giving handouts to their liberal allies.”

The backdrop: The bill was rolled out last month as a compromise between Senate Majority Leader Chuck Schumer (D-N.Y.) and centrist Sen. Joe Manchin (D-W.Va.). Yes, but: The bill falls far short of what most Democrats had hoped for when Biden took office last January.

  • Democrats spent months last year pushing for a $3.5 trillion package that included paid family and medical leave, universal pre-K, tuition free community college, and an extension of the child tax credit.
  • That proposal was rejected by Manchin in December.

.

Quad’s mutual cooperation is achieving a free and open Indo-Pacific region: PM Modi in Tokyo

Quad’s mutual cooperation is achieving a free and open Indo-Pacific region: PM Modi in Tokyo

Prime Minister Narendra Modi Tuesday attended the second in-person meeting of Quad leaders in Tokyo, where he said that the Quad has gained a significant place on the world stage in a short span of time. He said that Quad’s mutual cooperation is achieving a free, open and inclusive Indo-Pacific region.

My remarks at the Quad Leaders Meeting in Tokyo. https://t.co/WzN5lC8J4v
— Narendra Modi (@narendramodi) May 24, 2022
The Prime Minister spoke of India’s contributions to ensuring stability in the Indo-Pacific region. Earlier in the day, India had joined the Indo-Pacific Economic Framework (IPEF), an Indo-Pacific economic bloc led by the US to counter China.
“Despite the adverse situation of Covid-19, we’ve increased our coordination for vaccine delivery, climate action, supply chain resilience, disaster response, economic cooperation and other areas. It has ensured peace, prosperity and stability in Indo-Pacific,” PM Modi said at the summit.
He also referred to the Quad’s commitment to a free and open Indo-Pacific. “Our mutual cooperation is encouraging achieving a free, open and inclusive Indo-Pacific Region,” he said.
PM Modi was welcomed by US President Joe Biden, among other world leaders. It’s wonderful to see you again in person, Biden told Modi.
The Quad summit is being attended by US President Joe Biden, Japanese Prime Minister Fumio Kishida and Australia’s newly-elected Prime Minister Anthony Albanese.
(With inputs from PTI)

!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘444470064056909’);
fbq(‘track’, ‘PageView’);
.

Russian assets tank, leading global market sell-off after Putin acts

Russian assets tank, leading global market sell-off after Putin acts

A child is seen inside a bus arranged to evacuate local residents, in the rebel-controlled city of Donetsk, Ukraine February 18, 2022.Alexander Ermochenko | ReutersLONDON — Russian assets led a global pullback on Tuesday after Russian President Vladimir Putin ordered troops into two breakaway regions of eastern Ukraine.The Russian ruble slid below 80 to the dollar following Putin’s announcement, its lowest for two years, before recovering to around the 79 mark. The Ukranian hryvnia dropped further however, shedding 2.1% against the ruble. Russia’s MOEX stock index plunged 6% by late morning in Moscow to its lowest point since mid-2020, and was down 4.1% by early afternoon. The RTS Index was last seen down around 6.5%.European markets slid as much as 1.8% at the open on Tuesday morning but retraced the losses about three hours into trading to return to the flatline. Shares in Asia-Pacific closed lower on Tuesday and U.S. stock futures pointed to slight losses on Wall Street later in the day, also paring earlier losses amid volatile premarket trade.Meanwhile oil prices surged, with U.S. crude jumping 4.2% to $95 per barrel and international benchmark Brent crude climbing 2.9% to around $98 per barrel.Digital currencies also took a beating, with bitcoin sinking as low as $36,370 in early morning trade, its lowest level in more than two weeks, before recovering to $37,630 by late morning in Europe.Sanctions expectedIt comes after Putin announced Monday evening that he would recognize the independence of Donetsk and Luhansk and signed a decree calling for forces to enter the two enclaves of the Donbas partially held by Moscow-backed separatists.The United Nations Security Council held an emergency meeting in New York on Monday night as the long-simmering conflict entered a new phase. U.S. President Joe Biden signed an executive order prohibiting new investment, trade and financing from the U.S. to the two breakaway regions.U.K. Health Minister Sajid Javid told Sky News on Tuesday morning that “the invasion of Ukraine has begun.”Broader economic sanctions are expected to be announced by the White House on Tuesday and European foreign affairs ministers are gathering in Brussels to discuss the EU’s next steps.Neil Shearing, group chief economist at Capital Economics, said in a note Tuesday that the impact on Russia’s economy will depend in large part on the response of Western governments.Russian President Vladimir Putin delivers a video address to the nation, following the initiative of the country’s lower house of parliament and security council to recognise two Russian-backed breakaway regions in eastern Ukraine as independent entities, in Moscow, Russia, in this picture released February 21, 2022.Alexey Nikolsky | Sputnik | via Reuters”Its balance sheet is stronger than at the time of the 2014 Crimea crisis – external debt is lower, and financial linkages with other major advanced economies are smaller,” Shearing said.”The imposition of sanctions will still have an impact on the economy, but all other things being equal this is likely to be smaller than in 2014-15 (when GDP fell by ~2.5% and the country experienced a financial crisis).”Berenberg Chief Economist Holger Schmieding said the big uncertainty remains as to whether Putin will move Russian troops further into the Donbas — beyond areas held by pro-Russia groups — encroaching on Kyiv-held free Ukraine.If he stops before this point, “sanctions would weaken the Russian economy over time with very limited impact on the advanced world. Markets would return to normal after a while,” Schmieding said.However, should the situation escalate into a full-scale invasion, Berenberg expects further significant risk-off moves in markets over the next one to two months, followed by a rebound once the outlook becomes clearer, with markets mostly returning to previous trends over the next three to 12 months.Goldman on risk premiumAttempting to quantify how much geopolitical risk is currently priced in by stock markets, Goldman Sachs strategists said Tuesday that their benchmarks implied a discount of around 5% on the S&P 500, 8% on the Stoxx 600, 25 basis points on U.S. 10-year Treasury yield and around 2% on the euro versus the dollar.Larger discounts were seen in European satellite currencies, while gold was estimated to be trading at around a 5% premium based on the risks baked into market pricing year-to-date.”At the moment, USD/RUB stands somewhat above its levels in early January, when tensions around Ukraine began to rise sharply,” the Wall Street giant’s analysts said.”A better measure of the amount of risk premium still priced into the Ruble YTD, however, likely comes from comparing the Ruble to its high-yielding, commodity-exporting EM FX peers, which have seen significant spot gains versus the Dollar in 2022.”On this basis, Goldman Sachs estimated a risk premium from recent escalation of 9% based on Friday’s closing prices, which is likely to have risen following Monday’s escalation.Russia-focused gold miner Petropavlovsk plunged almost 30% over the past two sessions in London, while eastern Europe-exposed carrier Wizz Air also slid disproportionately compared to other airlines, which face cost pressures due to further rises in the oil price.”The threat of Russia invading Ukraine was clearly visible at the end of 2021, but most investors were more concerned about inflation and how fast interest rates might go up,” said Russ Mould, investment director at British retail investment platform AJ Bell.”Now the threat of war is very real, and investors will need to add it to their growing list of things to worry about. This could prompt another bout of panic and lead to heightened market volatility.”Mould suggested that portfolios will likely be reappraised, with investors considering increasing their weighting to cash in order to insulate against the next shock to hit equity markets. .