Bill’s Back…Better?

The remains of President Biden’s Build Back Better agenda were revived with last week’s Senate passage of the Inflation Reduction Act, which is expected to become law.

Here’s the vew from our experts on what the bill means in the near and short term for Americans: 

  • The climate and clean energy provisions in this bill take the type of meaningful action on climate that the market—and Democrats—have been demanding for some time. While the package does not adopt mandatory reduction targets—and the full effect of many of these provisions won’t be felt before the midterms—getting this bill across the finish line will likely check the box on climate action for many voters. 
  • Democrats have directly decreased health care expenses for millions of Americans while upholding the promises of the ACA at a time of rising costs in many sectors. While passage of the bill offers Democrats some much needed momentum, its impact on the midterms is unclear; most of its health provisions won’t go into effect before next year.

The bill’s climate provisions:

  • Adopt a graduated scale for some clean energy tax credits.
  • Adopt, for the first time, a series of technology-neutral, performance-based energy credits, creating flexibility for any technology to claim a credit if certain emissions reduction thresholds are met.
  • Include credits that will spur growth in targeted sectors, including hydrogen, sustainable aviation fuel and energy storage. 
  • Include $60 billion in environmental justice funding.

After years of piecemeal extensions, energy tax policy will remain largely static for the next 10 years (barring Congressional action), allowing project sponsors and technology developers to plan against a longer-term horizon. 

Health care-wise, the bill:

  • Extends Affordable Care Act (ACA) health insurance premium tax credits through 2025, greatly increasing health insurance affordability for many Americans.
  • Allows Medicare to negotiate lower prices for some high-cost prescription drugs starting in 2026.

These provisions will decrease costs for seniors and help millions of Americans avoid higher health care premiums. Democrats’ attempts to cap the out-of-pocket cost of insulin broadly, however, were blocked.

Businesses Eye U.S./China Tensions

On the heels of House Speaker Nancy Pelosi’s historic Taiwan visit last week, FGS Global teams in Shanghai, Beijing, Hong Kong, Washington and Berlin offer their outlook on its ramifications for global tensions and the business environment at large.

  • Our assessment is a U.S.-China military conflict over Taiwan is unlikely in the near future, but the next few years – some say the next 1,000 days – will continue to generate uncertainty. 
  • China announced large-scale military exercises surrounding Taiwan in response to the visit.
  • Despite these actions and associated warnings from each side, the U.S. and China are demonstrating they want to avoid a serious conflict over Taiwan.
  • Nonetheless, the visit heightened the sense of distrust and strategic competition that now frames the U.S.-China relationship. Taiwan will remain an issue that could lead to conflicts between the two countries, both deliberate and accidental. 
  • Pelosi’s visit will reinforce Chinese suspicions of U.S. intentions towards Taiwan. And China’s military activities will strengthen the U.S.’s doubts that China’s intends to unify with Taiwan by “peaceful” means.
  • Looking ahead, tensions over Taiwan will intensify as each side moves to test the other and defend its red lines. Actions by either side—coupled with charged rhetoric—will cast uncertainty over the investment climate in both Taiwan and China.
  • Companies should: 
    • Closely consider the geopolitical environment shaping the business environment
    • Understand the risks to their value chains in both Taiwan and mainland China (and for Chinese companies, their U.S. investments) and 
    • Engage in scenario planning. 

The investment climate for foreign companies will remain officially unchanged, though less positive and welcoming in the immediate future. But the cost of getting it wrong will be exceptionally high. 

Read the full analysis here.

Points on the Board

Until last night, it seemed both Biden and Trump had reasons to celebrate ahead of the midterms and a potential rematch in 2024. But even an FBI raid may not dampen Republicans’ support of the former president.

In welcome news for Democrats:

  • The Senate passed Biden’s long-awaited Inflation Reduction Act, addressing key Democratic priorities like climate change, healthcare costs and some corporate taxes.
  • Amid record inflation, gas prices have fallen for 50 straight days and are approaching an average of $4 per gallon.
  • The July jobs report showed a gain of 528,000 jobs—more than double what economists had been predicting.
  • Despite the U.S. economy logging two consecutive quarters of negative GDP – which typically indicates the economy is in a recession – other important indicators contradict this conclusion. Non-farm payrolls, personal consumption and real personal income have all continued to grow, if at slightly reduced rates, for much of the past six months.  
  • Kansas’ surprising abortion referendum victory indicates widespread political energy around the issue.

On the other hand:  

  • During one of the year’s busiest primary weeks, several Trump allies—particularly in Arizona and Michigan—saw victories, and others outperformed expectations.
  • A number of Republican candidates who deny the outcome of the 2020 presidential election also won their primaries Tuesday night, securing nominations for governor, Congress, and other offices in Arizona, Michigan, and Missouri.
  • Additionally, three of the ten GOP lawmakers who voted to impeach Trump were on the ballot Tuesday. Washington Representative Dan Newhouse (R-WA) eked out a victory, but Rep. Jamie Herrera Butler (R-WA) is facing defeat, while moderate freshman Representative Peter Meijer of Michigan was narrowly ousted in his primary. 
  • In last Tuesday’s only primary where two incumbents faced each other due to redistricting, moderate Rep. Haley Stevens (D) defeated progressive House colleague Rep. Andy Levin (D) in Michigan’s 11th District.

Video Killed the Radio Star

Cat Rakowski joins FGS this week after a long-running broadcast news career including roles at MSNBC and ABC News. So we asked her for some TV advice. 

Q: Some many big stories are dominating TV – recession, war, the Jan. 6 investigation – how can our clients break through and be heard? 

A: Peg your pitch to those front-page stories, if at all possible. If you’ve tried everything and find yourself stuck, I’d recommend acknowledging that when you pitch. But do it in a way that isn’t apologetic. The news will turn eventually — sometimes in an instant! — and you want to be top of mind when that moment arises. 

Q: Ok, if I have a great angle – any tips for how to land the pitch?

A: Customize your pitch as elegantly as you can. See what the host has been tweeting about and personalize the pitch to them. Consider adding a little joke or a little passion, if appropriate. And then, edit it down to a few confident sentences. I don’t think I ever had a cold pitch that won me over in the fourth paragraph. 

One thing I’d be cautious about is pitching to yesterday’s segment. Unless it’s a hot topic, you may have missed your chance.

Q: Is the Zoom interview here to stay? Or do guests need to be back in studio? 

A: At this point, if you’re going to Zoom, do it right. There’s no excuse not to have a ring light and reliable earbuds with a decent mic. Set your camera to the level of your eye and consider a nice fiddle leaf fig in the background.

We Can’t Rewind, We’ve Gone Too Far

It’s not every day we get to share insights fresh from behind the scenes of a major television broadcast. Let’s keep going with Cat, who you can follow on Twitter and LinkedIn

Q: What made for a great TV guest you’d want to invite back? 

A: Great guests make it look easy, which it ain’t. They have so much mastery over their topic they can listen actively and engage comfortably in the periphery of what they want to discuss. Audiences can tell right away if you’re there just to deliver a few key words and phrases. 

And being nice to the bookers goes a long, long way, especially when it comes to being asked back. 

Q: Thank you notes and candy grams for all the bookers! And what is the biggest mistake to get a guest on a “do not book again” list? 

Think of a dinner party. You’re the invited guest; don’t insult your host. Disagree respectfully all day long, but watch your tone.

Q: What was your goal each day as you put together Morning Joe? What made for a successful episode in your mind?

A: Joe often said we would never fail if we went smart, and that was a guiding philosophy that brought me clarity and pride over the years. Yes of course, we want the bullseye newsmakers and most incisive analysts. Yes of course, we want terrific conversationalists who can as easily pivot to ACC basketball as to Reagan’s top five speeches. But as long as we programmed for smart, fizzy conversation, we were heading in the right direction.

Blue Skies Ahead?

Democrats’ climate and tax package is racing forward. Senate Democrats remain confident they can start in the Senate as soon as later this week, which could allow them to send it to the House by the weekend. The House is currently slated to return on August 15 to take up the bill.

Here’s what’s happening now and what comes next:

The Byrd Bath process:

  • Is ongoing on all sections of the bill, including health care.
  • The Senate parliamentarian is reportedly very far along on the process on many sections of the bill.
    • This is helped by the fact that she has previously seen, read and reviewed versions of many of the bill’s provisions.
  • Democrats currently expect the parliamentarian to finish all or most of her review later this week.
  • The Byrd Bath process could continue on the floor as members raise challenges to underlying language in the bill or to new language is offered on the floor.

Floor timing and process:

  • Senate Democrats currently expect to vote on a motion to proceed to the House-passed reconciliation by Friday. 
  • Democrats’ timing and pace of the floor process depends on Democrats being confident they have the votes locked down and all 50 Democratic senators being present and voting—something that has been difficult to achieve in recent months.

Floor amendment process:

  • Following up to 20 hours of debate, the “vote-a-rama” begins where any senator can offer and has a decent shot at getting a vote on his or her amendment.
  • Some amendments will require 60 votes and some only 50 or 51.  
  • Even though there is likely to be close to $300 billion in deficit reduction in the bill, amendments that are not deficit-neutral are likely to require 60 votes.

No One Else Was in the Room Where It Happens

This is Nedra, reporting live this month from a new location: The office. 

After more than two years of editing this newsletter from home, I decided to spend the month of July going to FGS Global five, yes FIVE, days a week. And let me tell you, it is giving me LIFE.

The question of how to balance remote verses in-person work has become a dilemma for many employers. And I’m here to evangelize that we all make our best efforts to be together again. 

This is not easy for me: I’m a single mom of two kids who are going to different schools on opposite sides of town. Getting into the office some days from my house seems more complicated than launching a space shuttle. But I’m convinced it’s well worth the maneuvering. Here’s why: 

  • I love my job and the work I get to do. But I’m going to admit my favorite things about being a professional really are more basic – hanging out with friends and wearing nice clothes. The endorphin shot I’ve gotten from restoring those two routines has given me a renewed energy for my career I simply can’t get from unmuting myself at my dining room table. 
  • Our firm is encouraging attendance two to three days a week. Michele Soho, our savvy chief operating officer for North America, says she wants our employees to have FOMO if they aren’t in person. So the firm is taking a smart approach to incentivizing in-office attendance with meals and treats Tuesday-Thursday. It’s clearly working. The numbers are up those days, while Mondays and Fridays I can practically hear myself echoing off the vast expanse of empty desks. 
  • Hybrid meetings, where some attendees are in person and some are on video, are hard. We can’t see and hear each other clearly, the tech set-up is more complicated on a big screen than a laptop and we’ll have to find better ways to make that work. Clearly hybrid meetings are here to stay. One consideration: Is it a good time to bring back the conference call?
  • But my advice: Get in the room and off the Zoom, even if it takes a little extra effort. Reconnecting is electric.