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The White House wants to pass whatever it can from President Biden’s Build Back Better plan. We’ll also look at the golden opportunity inflation has given some businesses and nosedive in housing starts.
But first, it’s probably not a good idea to get in the route of the first lady’s motorcade.
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.
White House looks to salvage domestic agenda
The White House is hoping to salvage what it can of President Biden’s agenda after Sen. Joe Manchin (D-W.Va.) all but struck a fatal blow to talks on climate and tax provisions.
Rather than publicly sparring with Manchin or going back to the drawing board for a reworked deal, the White House is hoping to take any wins it can get in the short time between summer and the midterms, when Republicans appear to have a good chance at retaking both chambers of Congress.
White House officials and their allies believe passing a slimmed down reconciliation bill that addresses prescription drug pricing and health care subsidies would still make for a strong record given the narrow majorities Democrats have in each chamber of Congress.
That would be combined with the bipartisan infrastructure law, the American Rescue Plan and the recently passed bipartisan gun safety bill as major achievements for Biden.
“Don’t sleep on the health care pieces that will get done. If they get over the finish line, they will be significant wins,” said Eric Schultz, a former spokesperson in the Obama White House. “If you add that to the rest of the victories from the past two years, we’ll have an impressive story to tell.”
The Hill’s Brett Samuels has more here.
THE FIX IS IN
Inflation is providing cover for price fixing: economists
Economists and lawmakers are warning that high inflation is providing companies with an excuse to telegraph price increases during earnings calls, reducing market competition and compounding the pain for consumers.
“They’re profiteering, and they are using this moment and their monopoly power in many industries to raise prices on consumers,” Rep. Pramila Jayapal (D-Wash.) said in an interview, ahead of dozens of companies reporting second-quarter earnings this week.
The worldwide trend of high inflation, which has led to unrest and labor protests in numerous countries, is caused by larger disruptions in the global economy resulting from the coronavirus pandemic.
However, it is being exacerbated by companies in concentrated sectors essentially acting in cahoots to further price increases, economists argue.
“A bout of inflation creates an opportunity that didn’t previously exist for firms in concentrated industries to coordinate better their pricing decisions,” Hal Singer, managing director of Econ One Research and an adjunct professor at the Georgetown University McDonough School of Business, said in an interview.
The Hill’s Tobias Burns explains here.
DOJ pitches Senate on use of anti-mafia laws to seize Russian assets
The Department of Justice (DOJ) asked Congress for permission on Tuesday to use a sweeping set of laws originally designed to break up the mafia as part of their efforts to pursue the assets of the Russian elite following the country’s war in Ukraine.
The DOJ wants to include violations of sanctions and export controls in its definition of racketeering under the Racketeer Influenced and Corrupt Organizations Act, or RICO Act, which allowed federal prosecutors in the 1980s and 1990s to go after organized crime rings on charges of extortion and murder for hire.
Under current law, the DOJ can only freeze assets that are deemed to be illicit, which means it can only prosecute people for transacting with them. The proposed rule changes would allow authorities to actually take control of certain Russian assets, extending what it describes as a “powerful forfeiture tool against racketeering enterprises engaged in sanctions evasion.”
The DOJ’s request at a Senate Judiciary Committee won immediate support from some senators — including Sen. Chuck Grassley (Iowa), the top Republican on the panel, who said beefing up the RICO statute would help prosecutors secure convictions. But some senators wondered how far laws originally built to piece together vast criminal conspiracies from smaller bits of evidence could be extended in the international realm.
There’s more here from The Hill’s Tobias Burns.
HOW LOW CAN YOU GO?
New home construction falls to nine-month low
New U.S. home construction slipped in June to the lowest level since September 2021, underscoring a housing market slowdown.
Housing starts fell 2 percent last month to a seasonally adjusted annual rate of 1.56 million units, according to Commerce Department data released Tuesday. The decrease was driven by an 8.1 percent decline in single-family housing construction. Residential construction permits for future projects fell 0.6 percent.
Higher mortgage rates stemming from the Federal Reserve’s interest rate hikes has cooled down demand for houses as first-time homebuyers struggle with sky-high prices. The average 30-year rate was 5.51 percent last week, up from around 3.3 percent at the start of the year, according to Freddie Mac.
While weaker demand could bring down housing prices in the near term, an extended slowdown in construction could send prices soaring, as the U.S. faces a severe shortage of housing supply.
The Hill’s Karl Evers-Hillstrom has more here.
Good to Know
The Biden administration is considering the declaration of a climate change emergency in response to congressional inaction on the issue.
It’s unclear when and if such an announcement will come, though the White House had been considering a move as early as Wednesday.
Here’s what else we have our eye on:
Twitter’s lawsuit seeking to force Elon Musk to complete his $44 billion acquisition of the company will take place in October, a judge ruled Tuesday.
Social media platform Facebook is moving resources from its news initiatives and newsletters in an effort to build a more robust creator economy, according to a company memo.
🍺 Lighter click: Whoops
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.