Senate Democrats' massive victory

Transcript

NIALA BOODHOO: Good morning! Welcome to Axios Today!

It’s Monday, August 8th.

I’m Niala Boodhoo.

Here’s what you need to know today: Why this weekend’s conflict in Gaza was different. Plus, rents are skyrocketing everywhere.

But first, today’s One Big Thing: a massive victory for Senate Democrats.

How massive of a win? $740 billion worth in a tax climate and health care bill that was passed after 24 straight hours of debate in the Senate. The Inflation Reduction Act includes lowering the cost of prescription drugs, raising taxes on corporations and the largest investment in clean energy and emissions cuts the Senate has ever passed. Axios congressional reporter Alayna Treene has been covering this weekend vote-a-rama. Hi Alayna.

ALAYNA TREENE: Hi Niala.

NIALA: Even with everything I just said Alayna, this bill isn't as ambitious as Democrats initially wanted. So what did finally make it in?

ALAYNA: Yes, it's not quite the 3.5 trillion that was initially slated for the Build Back Better package. But this bill is huge and it really addresses the core priorities I think that Democrats have been talking about since Biden took office. $370 billion for climate change, that is massive. We have not seen an investment this large in clean energy in the Senate ever. It also allows the federal health secretary to negotiate the prices of certain expensive drugs for Medicare. That's including the insulin cap. They also wanted to have an insulin cap at $35 for commercial drugs but Republicans voted that down. There's also a three year extension on healthcare subsidies in the affordable care act. 15% minimum tax on corporations making 1 billion or more. There's more IRS tax enforcement and there's also 1% excise tax on stock buybacks.

NIALA: So Alayna, what happens next?

ALAYNA: Well, the bill is now headed to the House. They're expected to take this up on Friday. And it really is expected to remain intact. I think there's a lot of provisions that a series of democrats wish were in the bill that aren't in the bill, but by and large, they look like they're gonna hold firm in their unity on this and get this over the finish line. And then looking even further ahead, the midterms, I mean, this is, you know, three months now until the midterm elections and it's a huge win. Democrats have been desperate for over a year now to deliver on their main priorities and this bill does that. And so it's gonna be a huge talking point for them on the campaign trail. And for Republicans I think they're gonna argue that even though this is called the Inflation Reduction Act, they're gonna argue in the short term, you're not gonna see some of those benefits. And so it's gonna be a key messaging point as we move forward.

NIALA: Alayna Treene is part of Axios’ political team. Thanks Alayna.

ALAYNA: Thank you Niala.

NIALA: In a moment, Barak Ravid goes behind the headlines of this most recent conflict in the Gaza Strip.

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NIALA: Welcome back to Axios Today! I’m Niala Boodhoo.

Egypt announced a ceasefire late Sunday evening between Israel and the Palestinian Islamic Jihad, ending an Israeli military operation that began Friday. The fighting between PIJ and Israel resulted in at least 43 Palestinian deaths, including top leaders of the Palestinian Islamic Jihad and at least 19 women and children.

Axios's Barak Ravid told me that the big difference this time though is the role of Hamas in all of this. I asked him to explain why.

BARAK RAVID: Well Niala you know when this operation started, it was after more than a year of the most quiet period in Gaza for a very, very long time. And the reason for this was a new policy by the outgoing Israeli government that decided to start taking steps to improve the humanitarian and economic situation in Gaza after years that one Israeli government after the other refused to do that. And the fact that 14,000 Palestinians in the last year came to work in Israel every day, this pumped a lot of money into the Gaza economy and stabilized the situation. And this is why when the Islamic Jihad entered this conflict, Hamas was just, you know, sitting on the sidelines issuing statements of support and I think that this had big influence on the fact that this of violence was relatively short.

NIALA: And so where does this leave Israel and Hamas now that a ceasefire has been declared between Israel and the Palestinian Islamic Jihad.

BARAK: I think that, uh, this situation actually, uh, creates this window of opportunity to continue stabilizing the situation. The question is, as you know, Israel is going for another election, the fifth consecutive one in less than four years. And, uh, the big question mark is what's gonna be the policy of the next Israeli government and whether it's gonna continue down this path.

NIALA: Axios’ Barak Ravid from Tel Aviv. Thanks Barak.

BARAK: Thank you Niala.

NIALA: The average rent in the U.S. is now more than $2,000 a month. That's up 14% in the last year according to Redfin. Some cities like Cincinnati, Nashville, and Seattle are seeing rent skyrocket by over 30% compared to 2021. Here's what some Axios today listeners have seen in their cities.

JUSTIN: Hi, this is Justin from Shreveport, Louisiana. We're only paying $930 a month right now. But since Roe has been overturned, we wanna move to Colorado same size, it's gonna cost at least twice as much. And even if we split rent with friends, we'd barely be able to afford it.

GARRETT: Hi, Niala. My name is Garrett and I live in Boise, Idaho. My rent increased $300 a month in the month of June, and I work for a local nonprofit called catch and we worked to house individuals and families who are experiencing homelessness. And unfortunately we're seeing more people than ever experiencing homelessness here in the treasure valley.

NIALA: Here to dig into all of this is Axios markets correspondent, Emily Peck. Hi Emily.

EMILY PECK: Hi Niala.

NIALA: Emily, the unfortunate fact is that rents are always going up, but what's behind this current surge in rental prices?

EMILY: Right. So I guess it's three main things. First is inflation is driving up prices for everything that includes rent. And rent prices are actually included in the inflation number as well. The other thing is pandemic migration patterns, a lot of people with more money left big expensive cities and went in search of cheaper rents and cheaper housing in lower cost areas, driving prices up there too. The third thing would be prices for houses have gone up. Mortgage rates are going up. It's hard to buy a house. So if you maybe were in the market for your first house to buy, you might be renting instead for a while.

NIALA: And so I wanna go back to what you said about the idea of people moving during the pandemic, because we heard something similar to this from one of our listeners, Amanda in Columbus, Ohio.

AMANDA: One of the reasons I've stayed here my whole life is it's a really cheap and good place to live, but the area has been outpacing the rest of the country in housing costs and scarcity. My two bedroom apartment in the suburbs has gone up almost $500 in the past six years. And now that my boyfriend moved in with me, we've considered moving closer in the city to be near his work. But what apartments we can find are anywhere from a few hundred to close to a thousand dollars more for the same two bedroom, apartment size.

NIALA: Is this because of more people moving to places like Columbus, Ohio, because of remote work?

EMILY: Yes, it is. That's what's happening around the country. Places that normally don't see a lot of rent inflation are seeing big increases because things got rejiggered during the pandemic. People in high cost cities left to live in lower cost places, and they bought houses in those lower cost places, or they rented apartments and that pushed up demand and it pushed up the rents that landlords charge.

NIALA: Are there any signs that these prices could ease anytime?

EMILY: Well, Redfin's latest report did show signs of easing, which means just that the rate of increases is slowing down. So it's not like the increases have stopped or it's definitely not like decreases are happening. It's just, the increases are less steep. It's kind of cold comfort.

NIALA: Thanks to all our Axios Today listeners who contributed to this. Emily Peck is a markets correspondent for Axios. Thanks, Emily.

EMILY: Thank you.

NIALA: That’s it for us! You can always text me your feedback or thoughts to (202) 918-4893.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow.