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Markets: Moody’s couldn’t dampen the mood on Wall Street yesterday. Stocks rose even as bond yields spiked in response to the rating agency’s decision to downgrade the US’ credit. UnitedHealth popped as investors decided to buy the dip the insurer faced last week amid a slew of bad news.
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While you were sleeping or perhaps enjoying an emotionally charged episode of The Last of Us on Sunday night, the House Budget Committee advanced President Trump’s previously stalled “big, beautiful” tax and spending legislation, setting up a House vote as soon as Thursday.
What’s in it now?
In order to appease hardline conservatives holding up the bill, there were two big changes: 1) Moving up the timeline for Medicaid work requirements, which would save money but also result in an estimated 5 million Americans losing their health coverage, per Energy and Commerce Committee Republicans and 2) a quicker phase-out of clean energy tax breaks on things like electric vehicles.
While the bill will likely go through more rewrites than your average cover letter, as it stands now, it includes nearly $4 trillion in tax cuts:
It would make the lower tax rates for individuals put into place in 2017 during Trump’s first term permanent.
The bill also includes temporary tax deductions that would eliminate taxes on overtime pay and on tips.
What are the sticking points?
The GOP lawmakers who delayed the bill want even more changes, and so do other members of their party.
Debt on arrival: Remember how Moody’s downgraded the US’ credit rating over the weekend and cited rising debt for doing so? Nonpartisan analysts believe this bill would add as much as $5 trillion to the US’ $36.2 trillion debt over the next decade.
Needs SALT: Republicans from blue states with higher taxes are threatening to torpedo the bill if the state and local tax deductions aren’t increased. In the bill’s current iteration, the current SALT deduction would be tripled to $30,000 for joint filers with yearly incomes below $400,000.
Tech issues: More than 100 groups are pushing back against a provision in the bill that would not allow states to regulate AI tech for 10 years.
Big picture: While various factions inside the Republican Party fight over numerous aspects of the bill, House Speaker Mike Johnson hopes to pass it before the holiday weekend. President Trump reportedly plans to speak to lawmakers today to urge them to do so.—DL
Spencer Rascoff co-founded Zillow, scaling it into a $16b real estate giant. But everyday investors couldn’t invest until after the IPO, missing early gains.
“I wish we had done a round accessible to retail investors prior to Zillow’s IPO,” Spencer said later.
Now he’s doing just that. Spencer teamed up with fellow Zillow exec Austin Allison to launch Pacaso, whose co-ownership marketplace is disrupting the $1.3t vacation-home market. They’ve already surpassed $110m in gross profit and $1b in transactions.
Trump says Ukraine and Russia will talk ceasefire after his call with Putin. President Trump spoke on the phone with Russian President Vladimir Putin for two hours yesterday, and while Trump called the conversation “excellent,” it didn’t yield a ceasefire between Russia and Ukraine. Trump said that Russia would “immediately” start ceasefire talks with Ukraine, but it was unclear whether the US would continue to be involved in those discussions. “The conditions for that will be negotiated between the two parties, as it can only be, because they know the details of a negotiation that nobody else would be aware of,” Trump posted on Truth Social.
CBS News chief out as Paramount seeks Trump settlement. CBS News CEO Wendy McMahon announced her resignation yesterday, saying, “It’s become clear that the company and I do not agree on the path forward.” Multiple news outlets reported that she was forced out as CBS’s parent company, Paramount, looks to settle a lawsuit President Trump filed accusing 60 Minutes of deceptively editing an interview with his election opponent, Kamala Harris. Paramount is also seeking government approval for the sale of the company to Skydance. It’s the latest high-profile departure from CBS, which also recently saw the exit of veteran 60 Minutes executive producer Bill Owens that garnered a rare on-air rebuke.
Supreme Court lets Trump admin end deportation protections for Venezuelans. The high court ruled that the Trump administration could revoke the temporary deportation protections that were put in place toward the end of President Biden’s term for 350,000 Venezuelans. A federal judge had blocked the government from doing so while a lawsuit challenging the removal of the protections plays out, but the Supreme Court overturned that, potentially allowing deportations while the case progresses. As is typical for rulings on emergency applications, the justices did not explain their reasoning, though Justice Ketanji Brown Jackson said she would have denied the government’s request to remove the protections.—AR
Sold to the highest bidder: One gargantuan treasure chest of genetic data. Regeneron, the pharmaceutical company that created the world’s first Ebola treatment, has struck a deal to buy the once-hot DNA-testing company 23andMe out of bankruptcy, the drugmaker announced yesterday.
Regeneron beat out six other qualified bidders, according to an SEC filing. The $256 million acquisition values 23andMe at less than one-twentieth of its peak ~$6 billion valuation from 2021. But that’s still way above the biotech company’s recent market cap of ~$25 million, before yesterday’s news lifted the stock.
This could reflect competitive demand for 23andMe’s assets, the most valuable of which is its biobank of genetic material from as many as 15 million customers.
Privacy watchdogs and public officials urged people to delete their data after the company’s bankruptcy filing in March, but it’s unclear how many have done so.
Regeneron executives said they’re “committed to protecting the 23andMe dataset,” which will fuel the pharma giant’s “large-scale genetics research.”
Research was always 23andMe’s vision. “From day one, it was set up to be a database you could leverage for research,” co-founder Anne Wojcicki told BioPharma Dive in 2023. But she intended to retain control: After trying and failing to launch in-house drug development as CEO, Wojcicki resigned in order to bid on her startup independently when it declared bankruptcy.—ML
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Sesame Street is moving to a different address. Sesame Workshop, the nonprofit studio that has served muppetry to the masses for over 50 years, said yesterday that the iconic kids’ program will now stream on Netflix.
The newly inked distribution deal, which includes rights to video game development, represents a lifeline for the financially embattled show after its new episodes were dropped from HBO Max late last year:
Sesame Street has streamed on HBO Max since 2015 through an arrangement that brought its creators up to $35 million a year, per the New York Times.
The Netflix deal is reportedly less lucrative, but it will expand the show’s reach to an audience of 300 million subscribers.
What’s changing? New episodes will air on PBS stations and the PBS KIDS YouTube channel on the same day they appear on Netflix. Previously, they only made it to PBS months after debuting on HBO Max. And episodes will reportedly now put more emphasis on animated segments and character-driven humor.
Big Bird’s big move…from the Warner Bros. Discovery ecosystem to Netflix is emblematic of larger shifts at the two streaming companies. WBD has deprioritized kiddo content, as its signature series about mafiosos and media moguls aren’t exactly toddler magnets. Meanwhile, Netflix has increasingly catered to the youths, saying that kids and family programming account for 15% of its viewing.—SK
While the ranks of the wealthiest might seem easy to sort into two classes of bros (finance and tech), there’s another group increasingly making bank, albeit with less swagger: the owners of medium-sized regional businesses. The Wall Street Journal recently spoke with a pair of economists who study these “stealthy wealthy” owners of businesses like auto dealerships and dental practices, and learned that their share of the big money pie has gotten bigger:
Anonymized tax records showed that business ownership generated ~35% of income for the top 1% of earners in 2022, up from ~30% in 2014.
For the top 0.1% of earners, it went up from ~37% in 2014 to ~43% in 2022.
The economists, Princeton’s Owen Zidar and University of Chicago’s Eric Zwick, say these business owners have benefited from tax cuts aimed at them, as well as the years of low interest rates that raised company valuations. It also helps that their not-so-highfalutin services are simply worth paying for. For example, one entrepreneur who has done well for himself making machines that rip up carpeting explained to the WSJ, “The average elementary school in the United States has seven miles of carpet—and children are disgusting.”—AR
Together With The Female Quotient
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JPMorgan CEO Jamie Dimon cautioned yesterday that investors aren’t worried enough about the risks created by the US deficit, tariffs, and geopolitical tensions.
China accused the US of undermining trade talks by warning that using Huawei’s AI chips anywhere in the world ran afoul of US export controls. It urged the US to “correct its mistakes.”
Federal prosecutors charged Rep. LaMonica McIver, a Democrat from New Jersey, with assaulting an immigration officer during a chaotic protest at an ICE detention facility that also led to the arrest of the mayor of Newark. The charges against the mayor have been dropped. McIver called the charges against her “purely political.”
The UK and the EU signed new trade and defense agreements five years after Brexit.
Warren Buffett—who announced plans to step down as CEO at Berkshire Hathaway’s annual shareholder meeting this year—said he won’t speak at next year’s event, leaving “Woodstock for Capitalists” without its Jimi Hendrix.
They are (or have been) judges on American Idol. The 23rd season of the show wrapped up Sunday night.
Word of the Day
Today’s Word of the Day is: highfalutin, which means “pretentious, fancy.” Thanks to Bob from Stoughton, WI, and several other salt-of-the-earth readers, for the suggestion. Submit another Word of the Day here.
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Trump says Ukraine and Russia will talk ceasefire after his call with Putin. President Trump 
CBS News chief out as Paramount seeks Trump settlement. CBS News CEO Wendy McMahon 
Supreme Court lets Trump admin end deportation protections for Venezuelans. The high court 
Organize: A chic 
