The $1 trillion infrastructure bill, in short
The bipartisan infrastructure plan, drafted during a marathon weekend session in the Senate, may go to a vote in the chamber this week. It is just over 2,700 pages long, with allocations for everything from broadband and bridges to ports and pedestrian crossings, plus proposals for how to pay for it all.
You can read the entire bill here (before amendments), or get the gist from our handy top-line summary and links:
About $110 billion will go on roads, bridges and transportation programs. Pedestrian commuting, projects that reduce collisions between cars and wildlife, and a federal program intended to encourage children to walk or bike to school all get funding. But it adds up to a small fraction of what’s needed to address a $786 billion backlog of repairs for roads and bridges alone, according to the American Society of Civil Engineers.
There’s $73 billion for a clean-energy makeover of the electric grid. That is much less than what President Biden sought for projects like electric-vehicle charging stations and green public transport. There are also billions of dollars for climate resilience programs, such as flood control, and funding for investment in new technologies, including carbon capture.
Some $65 billion is budgeted for broadband in rural areas and programs to help low-income city dwellers who can’t afford high-speed internet. Biden initially proposed $100 billion to close that so-called digital divide.
Amtrak gets $66 billion and a new mandate. The bill will address rail’s significant repair backlog. Also, Amtrak’s mission would change to “meet the intercity passenger rail needs of the United States” rather than achieving “a performance level sufficient to justify expending public money.” That implies that profit is no longer the top priority.
The bill repurposes more than $200 billion in pandemic relief. The package redirects money once dedicated to expanded jobless benefits, small-business loans and other emergency aid. Some fiscal watchdogs say the supposed savings are budgetary gimmicks. As aid expires or is redirected, the economic challenges from a surge in the Delta variant of the coronavirus cloud the economic outlook for the months ahead.
Cryptocurrency advocates are fretting. A provision intended to raise about $28 billion in taxes from crypto transactions sent lobbyists scrambling. Despite already winning some concessions, crypto supporters said the language in the bill would define most participants in the sector as brokers, including Bitcoin miners, prompting onerous tax disclosures.
The coronavirus could delay the bill’s passage. Senator Lindsey Graham, Republican of South Carolina, announced yesterday that he had tested positive for the coronavirus. (His symptoms are mild, which he attributed to being vaccinated.) He has gone into a 10-day quarantine, and if infections spread to other supporters of the bill, it may cost the votes required to pass the legislation, delaying a vote into the Senate’s planned August recess.
HERE’S WHAT’S HAPPENING
The White House is trying to slow evictions after a federal moratorium expired. Key to the effort is encouraging states to speed up rental assistance: So far, $3 billion has been dispersed from a $47 billion fund authorized by Congress in March.
New York urges businesses to require vaccines, while other cities and states reimpose mask mandates. As the Delta variant of the coronavirus surges, Gov. Andrew Cuomo said it was in the “best interest” of bars and restaurants to mandate inoculations for admission. Elsewhere, Louisiana and San Francisco reintroduced indoor mask mandates.
An official at the National Labor Relations Board recommends a redo of the Amazon union vote. Workers at an Amazon plant in Alabama voted two-to-one not to form a union, but if the board follows the hearing officer’s recommendation, the union could restart the effort. Amazon said it would defend the original result, which the union said was marred by company interference.
Bill Gates and Melinda French Gates make their divorce official. Details of the couple’s separation agreement were not made public, unlike in the recent divorce of Jeff Bezos and MacKenzie Scott. Questions remain over how, or indeed whether, Mr. Gates and Ms. French Gates can continue to work together at their giant charitable organization, the Gates Foundation.
The I.M.F. approves its biggest-ever aid injection to fight the pandemic’s economic effects. Much of the $650 billion allocation will go to nations long helped by the institution, but as much as $275 billion was earmarked for the world’s poorest countries. The move was rejected by the Trump administration, but it gained U.S. support after President Biden took office.
What C.E.O.s talk about when they talk about inflation
It’s peak earnings season on Wall Street. Nearly 300 companies in the S&P 500 have reported their latest quarterly profits, with the rest set to open their books in the next two weeks. Bottom lines are way up from a year ago, but the hottest topic is inflation.
Analysts at Bank of America said that the word “inflation” was getting an average of two mentions per earnings conference call — unlike in previous quarters, when rising prices rarely came up. Inflation in labor costs was the most common concern, the analysts said.
Here’s what some executives have been saying:
“We know what happens in an inflationary environment, don’t we?” said Carol Tomé, the C.E.O. of UPS. “Price increases get passed along all the way to the end to the consumer until the consumer says, ‘Ouch, I’m not going to buy any more.’”
“The wage increase that we normally would do in October we pulled forward into May,” said Brian Olsavsky, the C.F.O. of Amazon. “We’re spending a lot of money on signing and incentives. And while we have very good staffing levels, it’s not without cost.”
“We’ve seen unprecedented increases in commodities, particularly lumber, over the last 12 to 18 months. Our anticipation and our plan was that that would decelerate throughout the back half of this year,” said David Denton, the C.F.O. of Lowe’s. “Is it going to happen over a six-week time frame, over a five-month time frame? Hard to predict that.”
Inflation, for now, is more of a drag on executives’ moods than on the bottom line. Second-quarter earnings are up 85 percent from last year for S&P 500 companies, and profit margins are at record highs, according to FactSet. That means, for now, that talk of inflation is rising faster than prices themselves.
“While I’m neutral on the technology, even intrigued — I spent three years teaching it, leaning into it — I’m not neutral about investor protection.”
— Gary Gensler, the S.E.C. chairman who previously taught a course about blockchain technology at M.I.T., in an interview with Bloomberg Businessweek about his plans for regulating cryptocurrencies. “Gensler signaled that his deep interest in the subject doesn’t mean he’s simpatico with the hands-off oversight approach that many enthusiasts would like to see,” Robert Schmidt and Benjamin Bain write.
Three takeaways from a new history of Tesla
A new book, “Power Play: Tesla, Elon Musk and the Bet of the Century” by Tim Higgins of The Wall Street Journal, chronicles Tesla’s journey from near financial ruin to seller of the most popular electric car in the world. Musk has already called the book, out today, “false and boring,” but Walter Isaacson had a more positive take in The Times’s review. Here are three things in the book that caught our eye:
The book claims that Musk (maybe) asked Tim Cook to make him C.E.O. of Apple. At the time, Tesla was struggling with quality problems in the Model X and Apple with its own electric-car program. Cook tested the waters about an acquisition. Musk said he would only consider a deal in which he’d be C.E.O. — not of Tesla, but of Apple. Cook responded with an expletive, and hung up the phone. On Twitter, Musk said he had never spoken with Cook. The book itself is cautious in relaying the exchange, recounting it as a story that Musk told others. “Whether or not this was an accurate recounting, it’s hard to imagine Musk was serious about wanting to be C.E.O. of Apple,” Higgins writes. “Rather, the story played into Musk’s vision of Tesla becoming on par with Apple.”
Musk often clashed with executives. In one of the book’s most vivid examples, Musk fired Tesla’s deputy head of manufacturing, Josh Ensign, after a worker demonstrated how to fix an irritating screeching sound made by the Model X’s windows. The factory had yet to make a Model X flawlessly, and was under enormous pressure because of optimistic production goals Musk had shared with investors. “Musk erupted at Ensign: How the [expletive] do you have somebody in your organization that knows the solution?” Higgins writes. Ensign did not want to embarrass the worker by telling Musk that engineers had already tested the solution and found it to be only a temporary fix.
Tesla has tried to get Musk to stop tweeting. “Power Play” vividly recounts Musk’s 2018 public meltdown beginning with his attempt to intervene in the rescue of a boy’s soccer team trapped in a flooded cave in Thailand and ending with him smoking weed on Joe Rogan’s podcast. (Here’s the excerpt in Vanity Fair.) An internal memo fretted that investors saw Musk’s tweets as proof that he was “distracted from Tesla’s main business,” and staff suggested a break from Twitter. Shortly thereafter, Musk tweeted that he was considering taking Tesla private, setting off an S.E.C. investigation. “A less brash executive might have been chastened,” Higgins writes. “But amid all of this, Musk returned to Twitter.”
THE SPEED READ
The actor Reese Witherspoon sold her production company, Hello Sunshine, to a Blackstone-backed firm for $900 million. (WSJ)
PepsiCo plans to sell Tropicana and other juice brands to the private equity firm PAI Partners in a deal reportedly valued at $4.5 billion. (WSJ)
Google is dropping Qualcomm to build its own smartphone processors. (CNBC)
A SPAC-on-SPAC deal (it’s complicated) involving the pharma firms Immunovant and Roivant fell apart. (Bloomberg)
Shares of Chinese companies like Tencent plunged after state media called video games “opium for the mind,” signaling that the sector could be next in a widening regulatory crackdown. (WSJ)
A new online database will make it easier to track what stocks politicians and their family members are buying and selling. (Business Insider)
Germany is testing electrified highways in a bid to reduce emissions from trucks. (NYT)
“Don’t Want a Vaccine? Be Prepared to Pay More for Insurance.” (Times Opinion)
Best of the rest
New animal welfare rules could cause a bacon shortage in California. (NBC News)
“Clean crypto” is being pitched by a growing group of entrepreneurs who say they have an answer for the industry’s outsize energy use. (Forbes)
Trying to address an imbalance between creators and brands, a new app (with an unprintable name) serves as a kind of Glassdoor for online influencers. (NYT)
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