Aurelia Butler

The Arizona Democrat was left out of the negotiations between Manchin and Senate Majority Leader Chuck Schumer, which resulted in legislation that, among other things, would eliminate a tax break for fund managers known as carried interest.Sinema, whose attention-grabbing style in the staid Senate belies her tight-lipped negotiating tactics, has given no clue about whether she might provide the 50th vote needed to pass the legislation in the Senate. The 46-year-old brushed off questions last week before the Senate left Washington for the weekend and her staff gave no signal that anything had changed.“Senator Sinema does not have comment,” her spokesperson, Hannah Hurley, said Monday. “She’s reviewing the bill text and will need to see what comes out of the parliamentarian process.”In the evenly divided Senate, Democrats need all 50 members of their caucus to pass the legislation if all Republicans are present and voting “no.” Manchin had been the other holdout blocking more ambitious Democratic initiatives. But with his role in pulling together this latest bill, Sinema becomes the the pivotal vote. Manchin told reporters Monday he hoped to speak to Sinema when she arrived in Washington later in the day.“Kyrsten is a good friend of mine,” he said. Sinema was the key architect of the final drug provisions in the bill, signing off on them after eliminating a proposed 95% tax on pharmaceutical companies that do not cut prices for those with private insurance.Sinema has a long history of throwing up roadblocks to plans backed by more liberal Democrats. She opposed increasing the minimum wage in the March 2021 Covid relief bill, opposes ending the filibuster to pass voting rights and abortion legislation and fought attempts to hold up the bipartisan infrastructure bill she negotiated last year until a $3.5 trillion social spending bill proposed by progressive was passed. That larger bill later died when Manchin came out against it. She is the main reason the smaller Inflation Reduction Act proposal now on the table doesn’t reverse the Trump-era corporate and individual rate cuts. But it does impose a minimum tax on corporations and eliminates the carried interest break, which has led to heavy pressure from Republicans and industry.“I’m not speculating about what she is going to do, but I do know there are some provisions in this field that she has had reservations in the past,” Pennsylvania Republican Senator Pat Toomey said Monday on Bloomberg Television. He called Sinema’s silence on the bill “conspicuous” and said he was “looking forward to chatting with her this week.”Big private equity firms have been encouraging lobbyists to keep fighting through the week to strike any language that suggests carried interest should be taxed at a higher rate.Private equity’s allies in trade association and lobbying circles have been in contact with the Arizona Chamber of Commerce and Industry as well as other pro-Arizona business interests to encourage them to amplify the message to Sinema’s staff that the bill hurts business, people familiar with the matter said.Calls from the buyout industry’s allies and lobbyists to Sinema’s tax and legislative staff have been continuing through the weekend, a person said.Sinema isn’t expected to oppose all tax changes. But in the past she’s indicated that she doesn’t support eliminating the carried interest break. That tax perk allows private equity and hedge fund managers to pay lower capital gains tax rates, which top out at 23.8%, rather than the 37% income tax rate on a portion of their earnings. The senator hasn’t publicly explained the reasoning for her stance on carried interest. “She will likely make a decision on carried interest on her terms and not political pressures from the party,” said James Maloney, managing partner at Tiger Hill Partners, which advises investment firms on government policies and does lobbying. “Self-determination is the one consistency to her seemingly unique style of decision making.”Eliminating carried interest is a relatively small change dollar-wise in the context of the $739 billion in tax provisions in the bill. It would only raise about $14 billion additional tax dollars over the course of the decade. If Sinema were to object to repealing carried interest, it could be stripped from the bill without large consequences on other spending priorities, but it could be politically difficult for other Democrats to hand a win to hedge funds and private equity firms.©2022 Bloomberg L.P. More

The paper by Waller and his Fed research colleague Andrew Figura, released July 29, criticized the approach of research earlier in the month by Summers, Blanchard and Alex Domash that argued the central bank would be unlikely to achieve its goal without inflicting a “painful” spike in unemployment.  Figura and Waller used the so-called Beveridge curve, which plots the job-openings rate against the unemployment rate, and found that a decline in the vacancy rate from 7% to 4.6% would lead to an increase in the unemployment rate of about 1 percentage point or less. “We recognize that it would be unprecedented for vacancies to decline by a large amount without the economy falling into recession. As a result, we are, in effect, saying that something unprecedented can occur because the labor market is in an unprecedented situation,” Figura and Waller wrote in a note published on the Fed’s website. “Because the V-U ratio is so high currently, it is possible to reduce vacancies with a much smaller effect on hiring than is typical.”In a response on the Peterson Institute for International Economics’ website published Monday, Blanchard, Domash and Summers said that it is understandable for senior Fed officials to hold out the prospect of a so-called soft landing for the economy, where inflation declines without a high cost to employment. “We find it entirely unconvincing as support for the ‘soft landing’ idea — pushed mostly recently by Fed Chair Jerome Powell in his July press conference — that vacancies can decline substantially taking pressure off inflation without driving unemployment way up,” they said. “Rather, the data support our conclusion that vacancies are very unlikely to normalize without a major increase in unemployment.”(Upates with comment from paper in fifth paragraph.)©2022 Bloomberg L.P. More

WASHINGTON (Reuters) -A union representing nearly 2,500 employees at three Boeing (NYSE:BA) Co defense locations in the St. Louis area said on Saturday they will vote on the company’s revised contract offer, canceling a strike that was set to start Monday.The International Association of Machinists and Aerospace Workers (IAM) said an overnight bargaining session had led to the new Boeing offer and workers will vote Wednesday on whether to accept it. Under the new contract offer https://www.iam837.org/news/new-contract-offer-from-boeing, employees can opt to receive an $8,000 lump sum payment — minus tax withholdings — upon ratification or can choose to have the entire amount deposited in a 401(k) plan. The company is dropping its revised 401(k) match proposal.Boeing said in a statement Saturday “this new offer builds on our previous strong, highly competitive one and directly addresses the issues raised by our employees. We are hopeful they will vote yes on Wednesday.”Workers at the three plants in Missouri and Illinois build the F-15, F-18, T-7A trainer, and the MQ-25 unmanned refueler. Boeing said on July 24 it was activating a contingency plan in the event of a strike.The standoff began after the union had criticized Boeing’s 401(k) payments in the contract and workers rejected the offer.”Boeing previously took away a pension from our members, and now the company is unwilling to adequately compensate our members’ 401(k) plan,” IAM said on July 24.Boeing’s earlier 401(k) offer on Sunday included a company match of workers contributions up to 10% of workers’ salaries along with an automatic contribution of 2% for 2023 and 2024. Boeing had also offered a $3,000 ratification bonus.Boeing currently provides a 4% company contribution and a 75% match on the first 8% of an employee contribution. More

Good evening,Today’s flurry of purchasing manager indices from S&P Global and others highlight the struggle of manufacturers as they face slowing demand and a looming economic downturn.In the eurozone, activity shrank in all the big economies in July, according to S&P Global. Surging inflation hit demand, bringing the bloc’s average PMI score to a 25-month low of 49.8 from 52.1 the previous month — 50 marks the divide between activity expanding and shrinking.Italy, the eurozone’s second-largest manufacturing hub after Germany, fared the worst, recording a score of 48.5 and the biggest drop in orders since the height of the pandemic in April 2020. Chris Williamson, chief business economist at S&P Global, said eurozone manufacturing was “sinking into an increasingly steep downturn, adding to the region’s recession risks”.In the UK, manufacturing activity fell to 52.1, the lowest level since June 2020. Rob Dobson at S&P Global said the sector had been hit by “rising market uncertainty, the cost of living crisis, war in Ukraine, supply issues and inflationary pressures all hitting demand for goods at the same time, while lingering post-Brexit issues and the darkening global economic backdrop are hampering exports”.In the US, the S&P Global reading fell to 52.2 from 52.7 in June, the lowest reading in two years, as output and new orders declined against a backdrop of weakening demand, supply chain problems and surging inflation. A separate PMI reading from the Institute for Supply Management, a measure closely watched by investors, showed growth falling to 52.8 from 53. ISM also indicated that cost pressures might be easing.In China, S&P’s PMI reading showed activity still recovering from recent Covid outbreaks but at a slower pace, falling to 50.4 from 51.7 in June. Separate official PMI data at the weekend showed factory activity unexpectedly shrinking.In Japan, the S&P Global PMI hit a 10-month low of 52.1 from 52.7 in June, as output and new orders shrank, although unlike China companies continued to add staff.India proved to be a notable exception, recording a jump to 56.4 from 53.9 in June, as new business and output grew while inflationary pressures weakened.Latest newsUN chief warns world is one step from ‘nuclear annihilation’ (AP)Russian central bank says economic downturn to deepen in Q3 (Reuters)Saudi Aramco to buy Valvoline’s products arm for $2.65bnFor up-to-the-minute news updates, visit our live blogNeed to know: the economyThe first shipment of Ukrainian grain in months left the port of Odesa today after weeks of negotiations between Kyiv and Moscow. The Razoni, which is carrying 26,000 tonnes of corn, is due to arrive in Istanbul tomorrow. The first €500mn of up to €9bn in financial aid from the EU arrived in Ukraine today with a further €500mn to be sent on Tuesday. Latest for the UK and EuropeThe UK launched its new property register to curb flows of “dirty money” into the country — an amount estimated to be £100bn a year. Anonymous foreign owners or buyers of property will no longer be able to hide behind secretive shell companies when trying to hide their illicit wealth.German retail sales fell by a much more than expected 8.8 per cent in real terms in June compared with last year, marking the largest drop in nearly 30 years as consumers tightened their belts. Sales fell 1.6 per cent between May and June.France is mobilising businesses, households and government agencies to make radical cuts in energy use ahead of the potential loss of gas from Russia. The UK too has an energy security problem, writes energy editor David Sheppard, but the country does not want to admit it.The boom in tourism is one of the eurozone’s few bright spots as the outlook for the bloc’s wider economy dims. One industry benefiting from the rise in living costs is the UK’s pawnbroking sector, as borrowers increasingly seek small loans secured on assets such as jewellery and watches. This market has also been boosted by a crackdown on high-interest lenders.Global latestPending legislation on US semiconductor manufacturing, designed to reverse the decline of US market share from 38 per cent in 1990 to just 10 per cent today, has been described by Intel’s chief as “the most important piece of industrial policy” in America since the second world war. The $280bn Chips and Science Act is a big economic win for President Joe Biden, agrees columnist Rana Foroohar.Emerging markets have been hit by a record streak of withdrawals of foreign investment over the past five months, as fears of recession and rising interest rates rattle developing economies such as Sri Lanka, Bangladesh and Pakistan.India could overtake China as the world’s biggest buyer of minerals over the next 10 years, according to a prominent industry investor, as China’s debt and demographic challenges become “incredibly problematic”.Hong Kong has fallen into its second recession in three years, as Beijing’s zero-Covid strategy batters the territory’s status as an international financial centre. Official data today showed that its economy shrank 1.4 per cent in the second quarter after a 3.9 per cent fall in the first three months. Japan is struggling with its biggest coronavirus outbreak since the start of the pandemic, fuelled by children and adolescents who have not been fully vaccinated.Need to know: businessHSBC, Europe’s biggest bank, has promised to restore its dividend to pre-pandemic levels after beating estimates to record pre-tax profits of $5bn in the second quarter. Lenders across Europe are having to rethink as they face up to rising interest rates, inflation, new taxes and a global economic downturn, or as the UBS chief told the FT: “The world will have to relearn banking.”Companies in England face an “iceberg” next spring, with a £3bn jump in business rates — the taxes they pay based on the rental value of the property they occupy. The annual uplift, which is linked to inflation, has been cancelled for the past two years because of the pandemic.Sudden shifts in consumer spending are creating havoc with big US retailers’ inventories. Households not only have less to spend but prefer to use their money on experiences they missed out on during the pandemic such as travel and eating out.Dutch brewer Heineken reported surging sales and profits in the first half of the year thanks to thirsty consumers returning to bars and shrugging off higher prices for their drinks. Revenues were up 37 per cent to €16.4bn.The rise of the sandwich industry became a symbol of how the UK economy has changed in recent decades. But as our Big Read details, it now faces an uphill struggle to survive after being derailed by the pandemic, rising ingredient costs, the loss of cheap labour because of Brexit and changing consumer tastes. The wine industry is also undergoing fundamental changes because of the pandemic.It is impossible to predict what the lasting legacy of Covid will be on working patterns, writes FT deputy editor Patrick Jenkins, but few bosses would dispute that it will mean less time in HQ buildings. Rising interest rates, remote working and the push for greener developments suggest a bleak outlook for the commercial property market, he says. The FT editorial board said public and private sector leaders needed to think more deeply about what the changes mean for the future of cities.The World of WorkFlexible and hybrid work offers are now expected as standard by Gen Z staff, writes careers expert Jonathan Black. But what else can companies do to attract and retain young workers who want a conversation rather than an interview and jobs with a wider purpose?Those companies that do strive towards better social behaviour not only make for better places to work but also enjoy better returns, says the Lex column.One welcome change, says columnist Emma Jacobs, is the growing awareness of the difficulties faced by women undergoing menopause. Too often however it can just be a smokescreen for ageism, she writes. “All the desk fans, cool-down rooms and ambassadors do nothing to address the lack of career development — or worse, discrimination — on offer for women (or men for that matter) in their late 40s, 50s and 60s.”Hybrid and remote work policies are becoming ever more common but some companies are taking location flexibility a step further, writes Isabel Berwick in the Working It newsletter. “Work from anywhere” policies actually encourage employees to travel and work abroad without the need to show your face at an actual office. However, remote working can mean a very different experience for those without the luxury of a dedicated office space. Toiling in a stifling heatwave, for example, will always be much more pleasant for those who can afford an airy home with shutters.Get the latest worldwide picture with our vaccine trackerSome good newsEngland’s Lionesses took the crown in a Euro 2022 tournament that could prove to be a turning point in the commercial progress of women’s football. If you want to get a sense of last night’s euphoria — a rare event in English football — check out this impromptu press conference invasion (BBC).If only all press conferences were like this . . .   © Sarah Stier/UEFA/Getty Images More