- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
Sen. Joe Manchin (D-W.Va.) has reversed course again on Democrats’ efforts to fight climate change and raise taxes on the wealthy. We’ll also look at the retail sales recovery, Biden’s challenge with messaging inflation and the push to pass a pared-down semiconductor bill.
But first, see how lawmakers voted on Friday’s abortion rights bill.
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.
Manchin strikes blow to Biden’s agenda
Sen. Joe Manchin (D-W.Va.) told Senate Majority Leader Charles Schumer (D-N.Y.) “unequivocally” on Thursday that he will only support a narrow budget reconciliation package before Labor Day if it does not include new spending to fight climate change or taxes on wealthy individuals or corporations, according to a Democrat briefed on the talks.
Manchin has informed Schumer that if Democrats move the reconciliation bill in August, he will only support a provision to lower prescription drug prices and a two-year extension of expiring health insurance subsidies under the Affordable Care Act, according to the source.
Manchin appears to be backing away from a commitment he made privately to Schumer last week to close a tax loophole on wealthy individuals and couples who earn more than $400,000 and $500,000 annually in pass-through income.
The West Virginia Democrat said Friday that the reversal came after he saw this week’s brutal inflation report.
Manchin also slammed the brakes on a proposal to adopt a 15 percent corporate minimum tax.
“I said, ‘Chuck, until we see the July inflation figures, until we see the July Federal Reserve rates, interest rates, then let’s wait until that comes out so we know that we were going down the path that won’t be inflammatory to add more to inflation.’ Inflation is absolutely killing many, many people,” Manchin told West Virginia radio host Hoppy Kercheval Friday morning.
Alexander Bolton has the details here.
Read more: Biden to Senate: Pass health bill and I’ll tackle climate through executive action
RING ME UP
Retail sales rose 1 percent in June after May dip
Retail sales picked back up in June after falling in May in the face of rapid price increases, according to data released Friday by the Census Bureau.
U.S. retailers, restaurants and bars made $680.6 billion in sales last month, up 1 percent from a May total of $673.9 billion. Retail sales figures are adjusted for seasonal shifts in consumer spending, but not inflation.
Retail sales beat economists’ expectations for June after falling 0.1 percent in May.
While inflation has remained high and rising for more than a year, consumers have powered through price hikes and their own deepening concern about the future of the economy to keep spending more money.
Spending on retail and food services is up 8.4 percent, the Census Bureau said, over the past 12 months as consumer prices rose 9.1 percent in the same time, according to Labor Department data. But consumer spending habits have shifted notably as households adjust to rising prices.
“Today’s retail sales numbers reveal how consumers are continuing to absorb higher prices in non-discretionary categories like gas, and deferring purchases in categories like appliances,” said Claire Tassin, retail and commerce analyst at Morning Consult, in a Friday analysis.
Sylvan has more here.
Why Biden’s inflation message is out of touch with Americans
President Biden’s message downplaying the latest inflation numbers is out-of-touch, according to experts who warn that his remarks make the administration appear unrelatable to most Americans.
Annual inflation hit 9.1 percent in June, the highest rate of price growth since November 1981, despite recent interest rate hikes from the Federal Reserve. Consumer prices rose 1.3 percent last month alone, driving up the costs Americans face to get groceries and fill up their gas tanks.
Biden acknowledged in a statement after the report’s release that inflation remained “unacceptably high” but then downplayed the significance of the new data, calling it “out-of-date” because it does not reflect the decline in gas prices not captured in the June report.
Experts warned that Biden’s message may prove ineffective to most of the public.
“Biden’s response to the inflation report this morning might have been a little tone deaf,” said Derek Tang, co-founder of Monetary Policy Analytics, in a Wednesday interview.
“Telling them this release is out of date because it doesn’t have the latest data is not really going to be well received as a message,” he continued.
Sylvan and The Hill’s Alex Gangitano have more here.
CHIPS ARE DOWN
Biden officials pitch pared-down China competition bill to House
Top Biden administration officials pressed House lawmakers on Thursday to move quickly on legislation designed to boost domestic production of semiconductors, warning of both the national security and economic harm that could come with inaction.
In a closed-door briefing in the Capitol Visitors Center with House lawmakers of both parties, administration officials — Commerce Secretary Gina Raimonda, Director of National Intelligence Avril Haines and Deputy Defense Secretary Kathleen Hicks — urged Congress to step on the gas.
The House and Senate have both passed much larger legislative packages designed to improve U.S. competitiveness with China. But the bills — known as “America COMPETES” in the House and “USICA” in the Senate — have been stalled for weeks in tough conference negotiations between the chambers with no resolution in sight.
If the early response was any gauge, their pitch was highly successful. “Across the board everyone wants to get something done,” said Rep. Brad Schneider (D-Ill.). “My walkaway was — at least in that room — everyone was on the same page.”
The Hill’s Mike Lillis has more here.
Good to Know
While Americans await the Biden administration’s decision on federal student loan forgiveness, the Education Department is encouraging millions to consider applying for a forgiveness program that’s already in place.
On Thursday, Education Department Secretary Miguel Cardona said the Federal Student Aid office was sending emails to roughly 22 million of the 45.3 million borrowers in the U.S., urging them to see if they’re eligible for loan relief under the Public Service Loan Forgiveness program.
Here’s what else we have our eye on:
Treasury Secretary Janet Yellen criticized Moscow during a meeting that included a top Russian minister and other officials from the Group of 20 (G-20) nations on Friday, asserting that Russian officials shared “responsibility for the innocent lives lost” in “Russia’s brutal and unjust war,” according to a Treasury official.
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 next week.