On The Money — Biden signs sweeping economic bill into law
President Biden just signed sprawling legislation into law to lower health care costs and address climate change, notching a significant win. We’ll also look at how commercial investors have been taking advantage of the hot housing market, the Biden administration’s latest round of student debt forgiveness and more.
But first, the NBA announced a no-games day as part of a new effort to get people to vote.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Aris Folley and Karl Evers-Hillstrom. Subscribe here.
Biden signs expansive health, climate bill into law
President Biden signed into law a sweeping bill to lower health care costs and address climate change on Tuesday, sealing a legislative victory more than a year in the making.
The $740 billion bill was significantly slimmed down from the original $3.5 trillion package some envisioned last fall, but nevertheless represents an undeniable win for Biden and Democrats in Congress. It includes some of Biden’s key campaign promises and makes the largest investment in federal climate programs in history.
The White House has pointed to the bill as a way to lower costs for American families during a period of high inflation, though some of the provisions of the bill that will ultimately lower prescription drug costs will take years to go into effect.
The bill would pay for climate and health measures by introducing new taxes on large corporations with the package’s tax plan involving a 15 percent minimum tax on the income that big companies report to shareholders. The tax would exempt companies taking advantage of accelerated depreciation, a popular deduction that helps pay for capital investments, which was included to secure the support of Sen. Kyrsten Sinema (D-Ariz.).
Still, Democrats view the climate change provisions in particular as game-changing investments. By 2030, the law is expected to bring U.S. planet-warming emissions down to lower than they were in 2005 through many of its provisions to promote the deployment of clean energy.
Next steps: Biden’s signing of the bill is expected to kick off a multistate tour to promote the legislation and other administration accomplishments, with less than three months until the November midterm elections.
Biden, who is headed home to Wilmington, Del., on Tuesday night for the remainder of his summer vacation, is scheduled to attend a Democratic National Committee event in Maryland next Thursday. The president is also expected to host another event early next month to celebrate the passage of the bill.
The Hill’s Alex Gangitano and Morgan Chalfant have more here.
LEADING THE DAY
Real estate trusts pay out big home dividends as builders bemoan ‘housing recession’
Dividends paid out on single-family homes owned by real estate investment companies have jumped more than 44 percent since last year, showing how commercial investors are taking advantage of a hot housing market that’s pricing out middle-income and first-time homebuyers.
Real estate investment trusts (REITs) paid out $212 million in dividends in the second quarter of this year on single-family homes, up 44.2 percent from $147 million last year, according to a report released Monday by the National Association of Real Estate Investment Trusts trade group.
Dividends paid out on the residential sector as a whole were up almost
10 percent on the year, while dividends on mortgage-backed REITs increased more than 15 percent.The payouts come as the U.S. faces what many lawmakers are describing as a national housing crisis, driven by skyrocketing home prices, rising mortgage rates and a dearth of new constructions in the wake of the coronavirus pandemic.
The median price of a house sold in the U.S. was up 15 percent to $440,300 in the second quarter of 2022 from $382,600 in the same period last year, according to the Federal Reserve Bank of St. Louis. Home prices are up more than 33 percent since just before the pandemic, and the 30-year fixed mortgage rate now stands at 5.22 percent, down from a June high of
5.81 percent.
Despite the premium prices and shortage of units, contractors and construction companies are hesitant to start building, citing apprehension on the part of consumers and an environment of rising interest rates.
National Association of Home Builders (NAHB) economist Robert Dietz went so far as to label the current situation a “housing recession.”
There’s more here from The Hill’s Tobias Burns.
SEE ALSO: New poll finds 62 percent of Americans worried about paying for housing in the next year
STUDENT DEBT CANCELLATION
Education Dept. discharges $3.9 billion of student debt for 208,000 borrowers
The Education Department on Tuesday announced plans to discharge $3.9 billion in federal student loans for 208,000 borrowers in its latest round of relief.
The office said the discharge would apply to any remaining federal student loans that the borrowers received to attend ITT Technical Institute, which closed in September 2016, from January 2005 onward.
The move follows previous decisions by the administration to approve loan discharges for borrowers to attend ITT, after the office said the institute was found to have “engaged in widespread and pervasive misrepresentations related to the ability of students to get a job or transfer credits.”
The department also charged the institute with “lying about the programmatic accreditation of ITT’s associate degree in nursing,” citing extensive internal records, testimony from staff and first-hand accounts from borrowers.
Aris has more details here.
SEE MORE: Fiscal watchdog argues against Biden student debt action
WORKERS WALK OFF
160 Amazon workers walk off jobs at California hub
One hundred and sixty Amazon employees walked out of a San Bernardino, Calif., warehouse this week, demanding higher wages and better working conditions.
“We’ve been organizing for a $5 pay increase, safe working conditions, and an end to retaliation at the KSBD warehouse,” Inland Empire Amazon Workers United (IEAWU) said Monday, adding that its repeated demands for change at the facility have been ignored.
The facility, referred to as KSBD, is one of Amazon’s largest facility’s on the West Coast and one of only three “air hubs” in the U.S. The company uses the facility to transport packages to its warehouses across the country.
The union said that 900 workers at the facility have signed a petition asking the company to raise its hourly base pay rate to $22 an hour, up from the current $17 an hour base pay rate. The union also raised concerns about working in dangerous heat conditions, which it says has resulted in illness.
The Hill’s Olafimihan Oshin breaks it down here.
Good to Know
As the school year begins, the IRS is telling educators that they can deduct up to $300 of out-of-pocket classroom expenses, the first increase in two decades.
The special educator expense deduction increase is the first since it was enacted in 2002 with a $250 annual limit, and the IRS said in a release this month it will continue to rise in $50 increments to adjust for inflation.
Here’s what else we have our eye on:
The Food and Drug Administration (FDA) on Tuesday finalized a rule allowing hearing aids to be sold over the counter.
Meta, the parent company of Facebook, pledged to remove misinformation about voting and invest an additional $5 million in fact-checking ahead of the midterm elections, according to a Tuesday blog post.
States along the Colorado River missed a federally imposed deadline to develop a new water-sharing agreement, and the federal government on Tuesday announced new water allocation reductions, including nearly 25 percent in cuts to Arizona.
Boston Mayor Michelle Wu (D) wants to ban the use of fossil fuels in new buildings.
American automobile company Dodge is discontinuing production of its widely popular gas-powered muscle cars.
TikTok pushed back on claims that a top House official made last week about security concerns related to the social media platform.
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 tomorrow.
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