After months of starts and stops, the House passed President Joe Biden’s $1.7 trillion social safety net and climate bill on Friday.
The process will not get any easier for Democrats as the bill heads to the Senate.
Senate Majority Leader Chuck Schumer wants to pass the Build Back Better Act by Christmas. To do so, he will have to get all 50 members of his caucus — from conservative Sen. Joe Manchin of West Virginia to democratic socialist Sen. Bernie Sanders of Vermont — to back the same sweeping plan.
Multiple senators will push for changes to the bill’s provisions including paid leave and taxes along the way. Any tweaks will require another vote in the House, where House Speaker Nancy Pelosi can afford three defections (only one Democrat, Rep. Jared Golden of Maine, voted against the bill Friday).
Speaker of the House Nancy Pelosi (C), D-CA, speaks during a news conference with Democratic leaders after the passage of the Build Back Better Act at the US Capitol in Washington, DC, on November 19, 2021.
Jim Watson | AFP | Getty Images
Congress will leave Washington for Thanksgiving week, setting up a December rush to approve the bill before the capital’s attention turns to the 2022 midterm elections. In a statement after Friday’s House vote, Schumer said the Senate will take up the package after the Senate parliamentarian completes the “necessary technical and procedural work” to make sure it complies with budget reconciliation rules. The special process allows Democrats to approve the plan with a simple majority without GOP votes.
“We will act as quickly as possible to get this bill to President Biden’s desk and deliver help for middle-class families,” he said.
The House bill includes child-care subsidies, a one-year extension of the enhanced child tax credit and universal pre-K. It would expand Medicare to cover hearing aids and boost options for low-income Americans to buy insurance through Medicaid.
The plan would also put roughly $550 billion into programs designed to curb climate change.
The Senate will likely make changes before it passes the bill. Manchin, who has not publicly endorsed the package as he expresses concerns about spending and inflation, will seek at least one overhaul.
He has signaled he will push to scrap a House provision offering four weeks of paid leave to most Americans.
Sen. Kyrsten Sinema, D-Ariz., is another Democrats who could seek to influence the bill in the Senate. She already shot down her party’s efforts to hike tax rates on the biggest businesses and wealthiest individuals, forcing lawmakers to opt for more complicated policies such as a minimum tax on corporations.
Tax policy could become one of the biggest sticking points in the Senate. Sanders and Sen. Bob Menendez, D-N.J., have taken issue with a House proposal to lift the cap on state and local tax deductions to $80,000 from $10,000 through 2030.
The policy — which Pelosi has defended — would disproportionately help wealthy Americans as part of a bill Democrats have sold as a boon to working families. It would also cost the Treasury revenue.
“You can’t be a political party that talks about demanding the wealthy pay their fair share of taxes, and then end up with a bill that gives large tax breaks to millionaires. You can’t do that,” Sanders, the Senate Budget Committee chair, said in a tweeted statement Thursday. “The hypocrisy is too strong. It’s bad policy, it’s bad politics.”
In a separate statement Friday, Sanders cited tax policy, drug prices, Medicare expansion and climate policy as he pledged to “strengthen the Build Back Better Act” in the Senate.
Democrats will likely have to forge a compromise around the tax deductions. A handful of House Democrats from high-tax states such as New York and New Jersey made lifting the cap a condition for supporting the bill.
Another tax plan that could surface in the Senate is a proposal from Sen. Ron Wyden, D-Ore., to tax billionaires’ assets. Golden said Friday that inclusion of the Senate Finance Committee chair’s levy on billionaires or tweaks to the cap on state and local deductions could get him to support the legislation when it comes back to the House.
In other possible changes, the Senate parliamentarian will likely strike a House proposal to establish limited legal protections for millions of undocumented immigrants.
After the House passed its version of the bill Friday, Pelosi acknowledged she will likely have to resolve differences with the Senate.
“This bill will now be reshaped to their committees and at that point we’ll see where we need to, shall we say, reconcile our differences. But at the end of the day, we’ll have a great bill,” she said.
No cases of new omicron variant in the U.S., CDC says
Pediatric doses of the Pfizer-BioNTech Covid-19 vaccine sit on a table at National Jewish Health on Nov. 3, 2021 in Denver, Colorado.
Michael Ciaglo | Getty Images News
There are no U.S. cases of the new omicron Covid variant, the CDC said late Friday, referring to a heavily mutated strain of the virus that has been classified as a “variant of concern” by the World Health Organization.
“No cases of this variant have been identified in the U.S. to date,” according to the statement by the Centers for Disease Control and Prevention.
“CDC is continuously monitoring variants and the U.S. variant surveillance system has reliably detected new variants in this country. We expect Omicron to be identified quickly, if it emerges in the U.S.,” it said.
The newly identified strain — referred to as lineage B.1.1.529 — was first detected in South Africa and raised concerns due to the rapid rise in the number of coronavirus cases in the country’s Gauteng province.
The UN health agency only designates Covid strains as variants of concern when they’re more transmissible, more virulent or more adept at evading vaccines and therapeutics.
“This variant has a large number of mutations, some of which are concerning,” the World Health Organization said. “Preliminary evidence suggests an increased risk of reinfection with this variant, as compared to other [variants of concern]. The number of cases of this variant appears to be increasing in almost all provinces in South Africa.”
The U.S. on Friday imposed travel restrictions for non-U.S. citizens from South Africa and seven other countries. The restrictions will begin from Monday, and are part of a global effort to blunt the spread of omicron, according to senior Biden administration officials.
The other countries included in the ban were Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia and Zimbabwe.
There was no indication of how long the restrictions will be in place.
— CNBC’s Christina Wilkie contributed to this report.
The rich are getting richer — and they’re fueling a private jet boom
Private jet demand is booming — to the extent that companies can’t produce them quickly enough and buyers are facing extended wait periods for deliveries.
Even secondhand business jets are vanishing from the market.
“If you look at today compared to 2019, the market has almost exploded,” John Schmidt, global aerospace and defense industry lead at consultancy Accenture, told CNBC at the Dubai Air Show.
The pandemic has converted a lot of travelers to private flying, many for the first time. But analysts say the trend is primarily attributable to a wealth boom in the last year and a half, specifically at the top echelons of society as more companies go public, the stock market hits record highs and spenders enjoy an extended period of low interest rates.
Business jet take-offs and landings in the U.S. are up 40% year-on-year — and at their highest point since before the 2008 financial crisis, according to Morgan Stanley.
Public listings by companies in the U.S. have already hit record highs in 2021. Data from Jefferies Equity Research shows that as IPO activity climbed, the volume of business jet deliveries rose in correlation with it.
The market is also drawing in individual buyers looking for safer and more exclusive travel that guarantees greater reliability than commercial flying, which has been hampered by Covid-19 travel regulations.
Amid the rise in demand in the high-end industry and rising inflation, prices of both new and used jets are are seeing their highest levels in years.
Inventory of used jets — the proportion of aircraft for sale versus the number of said aircraft in existence globally — is at record lows, around or below 3% for most major jet manufacturers including Cessna, Dassault, Gulfstream, Bombardier and Embraer, Jefferies says.
Private flight activity is not only up in the U.S. but also 20% higher in Europe, Schmidt said. “Things are really tight in used business jet aircraft, inventories the lowest we’ve seen in years, and yet prices are 20 to 30% higher,” he added. “So it’s a really hot market right now.”
First-time entrants to the private jet market now make up over 30% of buyers, according to a recent report by Goldman Sachs. For Embraer Chief Commercial Officer Stephen Friedrich, what stands out is the growth in consumer base.
“The addressable market right now for business jets has expanded. The pie has gotten bigger,” Friedrich said. “And the result is from continued wealth creation of over 12% when you take a look at the billionaires in the world, but also from what was traditionally Fortune 100 and large private companies.”
“People are looking for ways to become more productive, more certain in the missions that they have to perform,” he added, describing business aviation as a “productivity tool.”
“Can you fly direct from New York City to Muscle Shoals, Alabama, on a commercial flight? No,” Friedrich said. For the companies or individuals with the wealth to own a business jet, journeys that would take a full day of travel are reduced to a few hours.
Cabin pressurization in business jets is also significantly lower than that of commercial airliners — for some, it’s less than half. That difference means passengers feel significantly less fatigued upon landing, making multiple city stops and meetings much easier. Embraer’s flagship Praetor 600 has a cabin altitude of 5,800 feet while Dassault’s Falcon 6X has a cabin altitude of 3,900 feet. Compare that to an average cabin altitude up to 8,000 feet for commercial jets.
Private jet charter company VistaJet reported a 29% increase in new members over the past year, with 71% of new requests coming from passengers who did not regularly use private aviation before.
It also found that more that half of its new private aviation users — 53% — will keep flying privately on a regular basis post-pandemic.
Wealth creation since the pandemic has been starkly unequal, with U.S. billionaires getting approximately 62% richer – gaining more than $1.8 trillion– since March of 2020, according to U.S. think tank the Institute for Policy Studies.
Private jets were a fairly common sight at the COP26 climate summit in November, drawing intense criticism from environmental activists, who say that 1% of air travelers are responsible for 50% of the industry’s carbon emissions.
A recent report by the European campaign group Transport & Environment found that private jets are 5 to 14 times more polluting per passenger than commercial planes and that in one hour, a single private jet can emit two tons of CO2. The group also found that in Europe alone, CO2 emissions from private jets increased by 31% between 2005 and 2019, outpacing the growth in commercial jet emissions.
Executives in the industry say that sustainability is becoming a key priority for their businesses. Embraer has made a pledge to reach net-zero carbon emissions by 2040, and charter business jet provider VistaJet aims for the same by 2050.
To this end, some carriers are starting to use sustainable aviation fuels, or SAF, which generate 80% less CO2 emissions over its full life cycle than fossil fuels. But the pickup has been slow so far.
That’s because sustainable aviation fuels are expensive and difficult to obtain, said Accenture’s Schmidt, although there are currently more than 20 locations globally where sustainable aviation fuels can be found. Private jet charter service NetJets in November celebrated a year of using SAF, having flown 2.5 million nautical miles on the cleaner fuel.
“I see (SAF) as being the next step in sustainability for business aviation, followed by new programs, new engines, and the continuation of technologies to drive sustainability,” Schmidt said.
There are 3.7 billion gallons of SAF in forward purchase agreements, according to the International Air Transport Association. Twenty six million gallons of SAF will be produced in 2021, and some 45 airlines have experience using the fuels. More than 370,000 flights have been made using SAF since 2016.
“What we found is we knew it was good for business to make sure that we had a sustainable product,” Embraer’s Friedrich said. “It’s not just the right thing to do, it’s also good for business. It’s the right thing to do for the company.”
The coming years will tell whether companies’ promises result in long-term change. But given the spike in private flying, which industry analysts expect to continue, any substantial reduction in the damage it causes is likely a long way away.
Apple AR glasses to launch in 2022, according to top analyst
Tim Cook introduces iPhone 13
Source: Apple Inc.
Apple’s computerized glasses will be as powerful as its Mac computers and launch at the end of 2022, top analyst Ming-Chi Kuo of TFI Asset Management said in a note to investors Friday.
Kuo has a stellar track record at predicting future Apple product launches thanks to his research throughout Apple’s supply chain. Kuo said the huge processing power will help the glasses stand out from competitors since they’ll perform intensive tasks without a connection to a smartphone or computer. Previous reports said the glasses would need a connection to an iPhone in order to work.
The latest report is likely thanks to Apple’s development of its own processors for Mac computers. Those chips, which Apple calls the M1, outperform Intel processors Apple previously used while greatly preserving battery life.
This fall, Apple released the newest and most powerful versions of the M1 processor, the M1 Pro and M1 Max, in the new MacBook Pro. Kuo said Apple’s glasses will also use a processor based on the M1.
Still, Kuo said Apple will position the glasses as an iPhone accessory, not a replacement for the iPhone. That would play well into Apple’s strategy of selling wearable accessories like AirPods and Apple Watches tied to its flagship product, the iPhone.
Apple’s glasses are said to make use of augmented reality, which is the technology that overlays digital images on top of the real world. The company has supported augmented reality on the iPhone for several years, but computerized glasses have the potential to open up even more uses for the technology.
Apple shares were down more than 2% Friday amid a broader market selloff.
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