Blunting Biden’s wins

As details of the tax, climate, and health-care pact agreed by Democrats in the US Senate emerge, one thing is clear: It’s a big deal.If app [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( As details of the tax, climate, and health-care pact agreed by Democrats in the US Senate emerge, one thing is clear: It’s a big deal. If approved, it should cast doubt on the narrative of a Democratic Party too riven by ideological differences to govern. But with economic concerns grabbing the spotlight, the question is whether that will make any difference in November midterm election fight for control of Congress. Key reading: - [Manchin-Schumer Shock Deal Began in Basement, Unfolded in Secret]( - [Senate Deal Puts US Back in Climate Fight With ‘Huge’ CO2 Cuts]( - [Manchin Wins Big Nods to Oil in Deal Ending Logjam on Climate]( - [Here’s What’s in Democrats’ $370 Billion Climate Spending Deal]( - [Senate Tax, Climate, Drugs Bill in Limbo as Sinema Reviews Text]( - [‘Technical Recession’ Sets Up War of Words as US Voters Suffer]( The $370 billion climate and energy spending package and $313 billion in corporate-tax increases would complement last year’s $1.2 trillion infrastructure law and a $52 billion bill to boost the US semiconductor industry. It would lower eye-watering prices for drugs like insulin and envisions a 15% minimum tax on corporations and abolishing a workaround that billionaire fund managers use to avoid paying the same rates as average workers. The bill would also put the US within striking distance of meeting President Joe Biden’s goal of cutting emissions by half by 2030, even if it may open the way to holding oil and gas lease sales that could undercut the climate-friendly focus. Obstacles remain. Arizona Democratic Senator Kyrsten Sinema — a repeat spoiler of the party’s legislation — has long opposed closing the so-called “carried-interest” loophole that the bill targets. Her vote is vital. And the Democrats still face economic challenges. Despite roaring employment and consumer spending, the economy contracted for the second time in as many quarters from April to June. Inflation is the worst since the 1980s, the stock market is stumbling, and borrowing costs are rising. Unfortunately for Democrats, when elections come, the bills voters are more likely to focus on are the ones they have to pay, rather than those hashed out in Congress. — [Michael Winfrey]( Workers install solar panels in Hayward, California, on Feb. 8. The deal agreed by Senate Democrats offers incentives to increase the production of energy from renewable sources. Photographer: David Paul Morris/Bloomberg Click [here]( for this week’s most compelling political images and share this newsletter with others. They can sign up [here](. Global Headlines Face-to-face | Biden and his Chinese counterpart, President Xi Jinping, told aides to plan an [in-person]( meeting, their first since Biden became president, a US official said. The overture was made during a call lasting more than two hours yesterday that centered on Taiwan, a flashpoint exacerbated by House Speaker Nancy Pelosi’s possible visit to the island claimed by China. Startling failure | Three hostile foreign actors carried out “an incredibly significant and sophisticated” [cyberattack]( on the US federal courts document management system, the chairman of the House Judiciary Committee said. The breach of the electronic case filing system was committed more than 18 months ago, in what Representative Jerrold Nadler called a failure of “startling breadth and scope.” Global central banks made one of their biggest forecasting [failures]( on record when they woefully underestimated the magnitude and duration of the worst inflation surge in decades. The fallout going forward includes a greater risk of recessions as officials seek to regain control of inflation. Lagging behind | Rishi Sunak conceded he was the [underdog]( in the race to be the next Conservative Party leader and UK prime minister, and vowed to fight for every vote. The former Chancellor of the Exchequer admitted to party members at the first official hustings event his pledge not to cut personal taxes until inflation is under control was not popular. His rival, Foreign Secretary Liz Truss — who has vowed to cut taxes as soon as she takes office — seemed to enjoy a warmer reception at the gathering yesterday. Best of Bloomberg Opinion - [Democrats Shockingly Getting Things Done: Opinion Wrap]( - [Orban Wants No Mixed-Race Europe. Ready, CPAC?: Andreas Kluth]( - [Is Russia Winning the War for African Support?: Clara F. Marques]( Party connections | The assassination of Japan’s former Prime Minister Shinzo Abe has thrown a [spotlight]( on the little-known relationship between the country’s ruling party and the South Korea-based Unification Church. The man arrested for the shooting was quoted as saying he was motivated by a perceived connection between Abe and the church, which he blamed for his family’s financial ruin. A local tabloid published a list of over 30 senior lawmakers it said had links with it. Explainers you can use - [What to Know About Bolsonaro-Lula Showdown in Brazil]( - [What Are Recessions? Plus Thoughts on the Next One]( - [New US Climate Deal Could Make EVs, Energy Bills Cheaper]( Ma’s tour | Jack Ma is taking a weeks-long tour in Europe after largely disappearing from public view for almost two years, adding to signs that China’s government is easing pressure on the entrepreneur as he steps back from a business empire that had made him one of the nation’s most powerful people. While it’s not the Alibaba co-founder’s first trip outside China since he criticized Communist Party officials in 2020, it’s a [stark change]( from the days when the billionaire was being advised by the government to not leave the country. Ma speaks in Paris in 2019. Photographer: Marlene Awaad/Bloomberg Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1 p.m. ET, with a second hour on Bloomberg Radio from 1 to 2 p.m. ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - Treasury Secretary Janet Yellen gave a glass-half-full [assessment]( of the US economy, acknowledging a slowdown while rejecting the notion the country had entered a recession. - The US is poised to deliver a [bumper]( spring wheat crop in the coming weeks that could help relieve global shortfalls caused by blockades in the Black Sea. - A Russian state-owned company is [wiring money]( to a subsidiary that’s building a $20 billion nuclear power plant in Turkey, alleviating concerns in the country that the project will be delayed by war sanctions. - A US delegation met with senior Taliban officials in Uzbekistan to discuss efforts to [unfreeze]( some $3.5 billion in central bank reserves as the humanitarian crisis in Afghanistan worsens. - West Africa’s economic bloc is considering establishing a military force to deter coup plotters, following a string of [power grabs]( in the region. - Mexico doesn’t want a [rupture]( of North America’s free trade deal but will defend its sovereignty against any impingement, according to President Andres Manuel Lopez Obrador, whose energy policy is the source of a trade complaint. Pop quiz (no cheating!) Which country’s leader became the first to meet in-person with Xi since the Winter Olympics in February? Send your answers to balancepower@bloomberg.net. And finally ... The UK’s heat wave this month fueled so many blazes in London that the city’s fire service was busier than any day since Nazi attacks in World War II, and more than 840 people may have died in England and Wales. As [Eric Roston]( reports, a rapid scientific analysis of the event now concludes that without climate change those conditions would have been “[extremely unlikely](.” A fire in Wennington, UK, on July 19. Photographer: Leon Neal/Getty Images Europe Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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