Senate Democrats are working to quickly pass a sprawling spending bill that experts say could reduce the deficit and somewhat ease inflation. We’ll also look at the recent slowdown in home prices, a new bill that would guarantee flight refunds and more.
But first, find out why Congress can’t quit TikTok.
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.
Bill could bring down the deficit and maybe inflation
Senate Democrats are plowing forward with a sprawling tax reform and revenue plan that advances key pieces of President Biden’s legislative agenda, including tax provisions long sought by the party to help front investments in health care and climate.
Democrats say the new bill, dubbed the Inflation Reduction Act, aims to live up to its name and fight inflation, in part, by reducing the deficit. And some experts agree that the measure could be a significant tool to begin getting a handle on the country’s finances.
- Many experts agree that the bill, which is projected to bring in more than
- Josh Bivens, research director at the Economic Policy Institute, said he thinks the bill will have a “small sort of deflationary nudge” by way of reducing the deficit, but he added that he thinks “there are questions about how quickly that takes hold.”
The context:In a report released by the CBO in May, the agency projected the federal budget deficit would reach $1 trillion in 2022, after hitting $2.8 trillion the prior year. The latter marked the second-largest deficit in history, though it was down
Data from the Department of Treasury shows that the national debt has climbed to more than $30 trillion so far, putting pressure on Congress for action as the nation also grapples with four-decade-high inflation.
Aris has more here.
Slowdown in home prices broke record in June: research firm
Annual home price growth dropped by nearly 2 percentage points in June, the largest single-month slowdown on record, according to new research.
Black Knight, a real estate software and analytics company that has been tracking the metric since the early 1970s, found that annual home price growth fell from
- Existing home sales have fallen for five consecutive months as record prices and those higher interest rates drive more Americans out of the market. Black Knight’s analysis found that seasonally adjusted home sales were down by more than 21 percent since the start of the year.
- Slowing sales have led to recent inventory increases, according to Black Knight, but nationally, the United States still faces a shortage of 716,000 home listings. The company estimates it would take more than a year for inventory levels to fully normalize even with record increases.
“While this was the sharpest cooling on record nationally, we’d need six more months of this kind of deceleration for price growth to return to long-run averages,” said Ben Graboske, the president of Black Knight’s data and analytics division.
There’s more here from The Hill’s Zach Schonfeld.
Democrats introduce bill to guarantee cash refunds for canceled flights
Democratic lawmakers on Monday introduced a bill that would require airlines to provide cash refunds to travelers when they cancel or significantly delay a flight.
The bill, which would codify a Department of Transportation rule mandating cash refunds, comes as passengers continue to grapple with widespread delays and cancellations stemming from technical problems and a shortage of workers.
- The measure would give travelers the right to a cash refund if they cancel their flight at least 48 hours before their scheduled departure. Airlines commonly give travelers a voucher that can be used to purchase another ticket with that carrier and has an expiration date.
- Supporters of the bill say that airlines often offer customers a voucher without informing them that they are legally entitled to a cash refund if their flight is canceled.
Karl has the breakdown here.
UN hails first grain shipment out of Ukrainian agricultural corridor
United Nations Secretary-General António Guterres hailed the first shipment of grain out of Ukraine on Monday as part of a trade corridor set up by Russia, Ukraine, Turkey and the U.N. as “an enormous collective achievement.”
The shipment left the port of Odesa bound for Lebanon and consisted of nearly 27,000 metric tons of corn as part of the U.N.’s Black Sea grain initiative. It was the first commercial shipment of any kind to leave Odesa since Feb. 26, just two days after Russia launched its large-scale invasion of Ukraine, according to the U.N.
- The agreement struck by Ukraine and Russia with help from the U.N. and Turkey is meant to alleviate a shortage of food in many developing countries and to help bring down global food prices that have risen almost 25 percent since last year as result of the ongoing fallout from the coronavirus pandemic.
- The United Nations’s cereal price index is up 27.6 percent above its level in June 2021. International wheat prices reached a near-record level in May and are still nearly 50 percent higher than they were a year ago.
Tobias Burns has more on this here.
Good to Know
Commerce Department data last week found the U.S. economy shrank for a second quarter in a row, sparking a new debate about whether the nation is in a recession.
Negative growth in two consecutive quarters fulfills a common definition for a recession — and it’s the official way of making such a call in some countries. But it’s not in the U.S., where a relatively under-the-radar group — the National Bureau of Economic Research — is in charge of making an official call on whether the country is in a recession.
Tobias breaks down the process here.
Here’s what else we have our eye on:
- A bipartisan group of senators on Monday introduced legislation that would codify the right to an abortion into federal law but it faces an uncertain future.
- A trade group representing American chemical manufacturers filed a lawsuit against the Environmental Protection Agency over new nonbinding advisories for so-called toxic “forever chemicals.”
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.