The US Senate has passed president Joe Biden’s flagship economic package after a marathon overnight voting session that handed the president a major political victory just months before the midterm elections.
The climate, tax and healthcare bill, known as the Inflation Reduction Act, passed by 51 votes to 50, with voting split along party lines and vice-president Kamala Harris casting the deciding vote in an evenly divided Senate.
The Inflation Reduction Act includes some of the most significant climate legislation enacted in the US, with $369bn dedicated to climate and clean energy programmes. It also includes new measures allowing the government to negotiate lower prescription drug prices, a provision to apply a minimum 15 per cent tax on large corporations, and a new 1 per cent tax on share buybacks.
The bill still needs to pass the House of Representatives and be signed by the president before it becomes law, but its passage through the Senate marks the biggest in a string of recent victories for Biden as he aims to defend slim majorities in both chambers in November.
In a statement, Biden said the bill would “make government work for working families again” by lowering the cost of prescription drugs, health insurance and everyday energy costs while reducing the deficit. “It required many compromises,” Biden said. “Doing important things almost always does.”
Happy Monday, and thanks for reading FirstFT Asia — Sophia
Five more stories in the news
1. Alarm mounts over Turkey’s deepening ties with Russia Western capitals are increasingly alarmed at the relationship between Turkey’s president Recep Tayyip Erdoğan and Vladimir Putin, raising the prospect of punitive retaliation against the Nato member if it helps Russia avoid sanctions.
2. Chinese aircraft simulate attack on Taiwan’s main island The Chinese military completed its largest-ever military exercise around Taiwan yesterday in order to intimidate “Taiwan independence forces” and deter US intervention. Beijing characterised the four-day drills as punishment for US House Speaker Nancy Pelosi’s visit to Taipei.
3. Spectre of Russian interference hangs over Italy’s snap elections Italian cabinet minister Mara Carfagna defected to the centrist Azione party over suspicions that Putin played a role in Italy’s political crisis as payback for ousted prime minister Mario Draghi’s tough stand over Russia’s invasion of Ukraine — and her belief is not uncommon.
4. Tensions escalate as Israeli strike kills second militant leader Khaled Mansour, a senior figure in the militant group Palestinian Islamic Jihad, was targeted by an air strike on Saturday. Israeli forces have repeatedly bombed sites in Gaza since late last week, marking the sharpest escalation in violence since Israel and Hamas fought an 11-day war last year.
5. Taiwanese Apple supplier battles activists over $4bn cash pile In a case that signals increasing shareholder activism in Taiwan, Catcher Technology, which manufactures electronic casings for Apple devices made in China, is being challenged by Hong Kong-based investment firm Argyle Street Management to improve its governance and return some of its $4.2bn of net cash to shareholders.
The day ahead
Colombia’s president Ex-guerrilla and former mayor of Bogotá Gustavo Petro takes office as the country’s new president today, marking a break from decades of mostly conservative rule in the South American country.
Japanese trade Japan releases June trade balance figures today.
Corporate earnings Porsche releases its H1 earnings today; AIG, BioNTech, and NTT Group release quarterly earnings; News Corp releases its fiscal-year results.
What else we’re reading
The end of the warehouse bubble The pandemic put industrial sheds at centre stage of commercial real estate since they were less vulnerable to Covid lockdowns than offices and shops. But, now, warehouses are suffering from rate rises and cooling demand as the global economy causes a slowdown in ecommerce.
Climate, war and inflation jolt reinsurers into action Claims for natural catastrophes and pandemic-related losses have wiped out a large part of reinsurers’ profits in the past few years, causing the price of coverage to rise — and the options for insurers looking to pass on risks are shrinking.
Japan has ‘once-in-lifetime’ chance to end deflation Japan needs bolder monetary and fiscal stimulus from global inflationary pressures, according to Goushi Kataoka, an outspoken reflationist who left the BoJ board last month. Japanese interest rates have remained low, causing a divergence in global yields that sent the yen to a 24-year low against the US dollar.
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.
Why airports lose your luggage Baggage blunders in airports have increased by 17 per cent since July 2019. Staff shortages and the logistical complexities of connecting flights are both partly to blame. Heathrow, the UK’s main airport, has a third fewer airline ground handlers now compared to pre-pandemic levels.
If you are in the market for child-friendly electronics, check out this tech for mini maestros, gamers — and insomniacs.