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GM’s Cruise Expands Robotaxi Service to Phoenix and Austin Even With Safety Probe

(Bloomberg) — General Motors Co.’s Cruise unit started offering rides with its self-driving taxi business in two more cities, expanding beyond San Francisco with cars now operating in Phoenix and in Austin, Texas.

The driverless cars are running during limited hours and in limited service areas in both cities and charging fares to friends and family of employees, which is how Cruise started bringing in revenue in San Francisco. Next year, the service will expand rapidly to serve the general public in larger geographic areas.

Cruise’s plans for aggressive growth come at a time of increased scrutiny targeting self-driving cars. Federal safety officials are investigating the company’s autonomous driving system following three non-fatal accidents. Meanwhile, investors have bailed on autonomous-vehicle stocks, and Ford Motor Co. and Volkswagen AG shut down their AV startup Argo AI. 

“Once you have built this technology and have a way to produce it at scale and operate it in a large geographic area, there are very few things that can stand in the way of us reaching a massive amount of revenue,” Cruise Chief Executive Officer Kyle Vogt said in an interview. “We’re at an inflection point here.”

Alphabet Inc.’s Waymo is also pushing ahead by offering service in more parts of San Francisco and ferrying passengers from downtown Phoenix to the region’s airport.

Cruise’s expansion to Austin and Phoenix is the next step toward its goal of $1 billion in revenue in 2025. Growing total fares to $50 billion by the end of the decade is part of GM CEO Mary Barra’s strategy to double the automaker’s revenue by 2030. She is spending about $2 billion a year to grow the autonomous vehicle startup.

The company has 300 autonomous vehicles in the three cities. In Texas, driverless service will run Wednesday through Sunday from 10 p.m. to 5:30 a.m. in downtown and central Austin and expand to nightly service in the coming weeks. In Phoenix, the autonomous cars will run weekdays from 7 p.m. to 2 a.m. in parts of suburban Chandler.

It took Cruise 33 months to get the cars ready and permits in place in San Francisco. In Austin and Phoenix, the company started preliminary work in September and is already charging fares, which gives Vogt confidence that the business can expand quickly.

To keep growing, the company will need to avoid accidents or safety issues. The National Highway Traffic Safety Administration is looking at software in an estimated 242 Cruise vehicles, according to a document posted last week. The three collisions followed hard-braking incidents in which Cruise cars were rear-ended. 

NHTSA is also looking at incidents in which Cruise vehicles stopped and pulled over when the autonomous system could not navigate road or traffic conditions. The agency is probing whether the cars are becoming an obstruction or stranding passengers someplace that isn’t safe.

Safe Location

Vogt said that before NHTSA started its probe, the cars were upgraded and are now equipped to better handle incidents where they need to pull over. He said Cruise’s vehicles will try to drive to a protected location so passengers can get out safely if needed and so the car won’t obstruct traffic.

He would not comment on the investigation into braking, but said Cruise sends out updates to its systems very frequently to improve performance. 

Cruise has had few accidents and zero fatalities over 700,000 miles of driving, Vogt said, adding that he can see a day soon when AVs are clearly better drivers than humans. Already, they come free of bad human behavior like driving under the influence of drugs or alcohol, speeding or otherwise breaking traffic laws. 

“Starting by removing all the bad behavior gets you to a pretty good baseline,” Vogt said. “In the near future, we’ll know AVs are obviously better.”

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Bankrupt Crypto Lender Celsius Receives Multiple Bids for Retail and Mining Assets

(Bloomberg) — Bankrupt crypto lender Celsius Network LLC has received multiple bids for its retail platform and mining businesses, according to a company presentation delivered in court Tuesday.

Terms of the bids weren’t disclosed. They included offers for the retail platform, the mining business and a combination of the two, a lawyer for Celsius told US Bankruptcy Judge Martin Glenn in the hearing Tuesday. The potential buyer pool includes 30 parties.

Celsius advisers haven’t yet decided whether they’ll sell the crypto lender as whole, in pieces or if they’ll pursue a different restructuring plan. They intend to work with potential buyers in the coming weeks to improve existing bids and announce in mid-January whether a sale will occur, company lawyer Chris Koenig said in the hearing. 

Celsius, which went bankrupt in July, held crypto worth $2.6 billion as of Nov. 25, according to the presentation. There remains about a $1.2 billion gap between the value of its assets — including non-crypto — and its total debts.

Celsius mining operations have generated positive operating cash flow every month this year, Interim Chief Executive Officer Chris Ferraro said in the hearing. The company continues building out the mining business, he said.

The bankruptcy is Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York (Manhattan).

 

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Musk Actively Looking for New CEO After Losing Poll, CNBC Says

(Bloomberg) — Elon Musk is actively searching for a new chief executive officer for Twitter Inc., CNBC’s David Faber reported, after the billionaire lost a straw poll he posted on the social media site that asked users whether he should relinquish his role as head of the company.

More than 10 million votes, or 57.5%, were in favor of Musk stepping down, according to results that came in Monday morning. Musk committed to abide by the results when he launched the survey, but nearly a day later he had tweeted more than 10 times without directly addressing the outcome. Musk responded to a tweet suggesting the poll may have been manipulated by bots with a single word: “interesting.”

Announcing a new policy move in one of his first tweets after the poll, Musk said Twitter will restrict voting on major policy decisions to paying Twitter Blue subscribers.

Responding to a Blue member going by the name Unfiltered Boss, Musk agreed with the suggestion that only subscribers should have a voice in future policy and said, “Twitter will make that change.” Twitter Blue had attracted about 140,000 subscribers as of Nov. 15, the New York Times has reported.

Earlier, the billionaire pledged to submit all future policy decisions to a vote and offered Twitter users a choice on leadership, asking them if he should step down from the top leadership position at the company he bought in October for $44 billion.

Read about some of the potential candidates for Twitter CEO job

Musk’s dramatic offer came shortly after he attended the World Cup final match in Qatar, triggering a wave of trending topics such as “VOTE YES” and “CEO of Twitter.” He didn’t identify an alternative leader and went so far as to say anyone capable of doing the job wouldn’t want it.

Musk has warned that Twitter is at risk of bankruptcy and instituted a “hardcore” work environment for the remaining workers after a drastic cutback in staff. In his less than two months at the helm, he has spooked advertisers, alienated Twitter’s most ardent creators and turned the service from a reflection of the news of the day into the main topic.

After losing the initial poll, Musk, who’s also chief executive officer of Tesla Inc., retweeted promotional material for the car company and for Twitter’s Blue for Business service. He also responded to an article about rival Toyota Motor Corp.’s criticism of electric vehicles with a simple “Wow.”

The stock of Tesla, by far Musk’s most valuable holding, has plummeted since the Twitter acquisition and critics have argued he’s spending too much time on the social media company.

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Another Bitcoin Miner Teeters on the Edge of Bankruptcy

(Bloomberg) — Greenidge Generation Holdings Inc., once one of the largest public Bitcoin miners in the US, warned that it may seek bankruptcy protection while entering into debt restructuring talks with lender New York Digital Investment Group. 

The firm, probably best known for a long-running dispute with environmentalists over the impact of its operations on New York’s Seneca Lake, is the latest miner to teeter on the edge of bankruptcy in the wake of the plunge in the value of the largest cryptocurrency. 

Greenidge has entered into a “non-binding term sheet” to restructure about $74 million debt with NYDIG, according to a filing with the US Securities and Exchange Commission. Under the pact, the lender would purchase mining rigs from Greenidge and enter into a hosting agreement. In exchange, NYDIG would agree to reduce from around $57 million to $68 million of debt. If consummated, the deal would effectively shift Greenidge from a mining to a hosting firm. 

Bitcoin miners raised billions of dollars from debt financing to fund their rapid expansion in the last bull run. But low Bitcoin prices, soaring energy costs and stiff competition have plunged profit margins and made it difficult for them to repay debt. Major Bitcoin miners such as Core Scientific and Argo Blockchain warned of potential bankruptcy in recent months largely due to their mounting debt with crypto lenders. 

Greenidge’s average monthly cash burn rate in the past two months was approximately $8 million. That is typically used to describe the rate at which a company spends capital to finance overhead before generating a profit or loss from operations. About $5.5 million of that cost was associated with principal and interest payments to NYDIG. The firm expects to have a similar cash burn rate and similar payments to NYDIG in December, according to the filing.

The Fairfield, Connecticut-based miner has a natural gas plant that powers its Bitcoin mining facility in Dresden, New York. It is one of the earliest and largest crypto-mining firms in the state. While Greenidge’s current operations remain intact, New York Governor Kathy Hochul signed one of the most restrictive laws in the US on crypto mining last month with a two-year moratorium on new permits from the miners that are powered by fossil fuel. 

Shares of Greenidge have tumbled about 98% this year and trade at around 33 cents. Bitcoin has slumped about 63% during the same period.

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Ukraine Latest: Zelenskiy Visits ‘Eastern Fortress’; Pipe Blast

(Bloomberg) — Ukrainian President Volodymyr Zelenskiy made a surprise visit to Bakhmut, a city hailed by his deputy defense minister as “our eastern fortress” amid heavy fighting over the past few weeks.

As the president handed awards to servicemen, Ukraine’s government said it had reached a deal with Elon Musk’s Space Exploration Technologies Corp. to get thousands more Starlink antennas to help keep people online amid Russia’s attacks on infrastructure. 

In Russia itself, an explosion hit a natural-gas pipeline that goes to Ukraine for further supply to Europe. The blast occurred on a section of the Urengoy-Pomary-Uzhgorod link, though the local unit of Gazprom PJSC said transportation of fuel was being provided to consumers in full through parallel pipelines.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Ukraine to Get Thousands More Starlink Antennas, Minister Says
  • Ukraine Gets IMF Nod for Non-Cash Program, Paving Way for Aid
  • US Lawmakers Release Huge Spending Bill Before Year-End Deadline
  • Germany Demands Rheinmetall Fix Faulty Puma Armored Vehicles

On the Ground

Ukrainian units have downed 67 drones since Dec. 7, Air Force spokesman Yuriy Ihnat said at a briefing. Yesterday’s attack was the most powerful, as Russia launched 35 UAVs, 30 of which were shot down, Ihnat said. Russian forces had launched four missile attacks, 60 air strikes and more than 80 salvos from multiple-launch rocket systems over the past day, Ukraine’s General Staff had said earlier on Facebook. 

(All times CET)

Russian Gas Flows to Europe Unaffected After Pipeline Blast (3:30 p.m.)

A blaze at the site of the incident, which reportedly happened during scheduled maintenance work on the link, has been extinguished, according to local emergency services. Gas nominations for Wednesday transit via Ukraine so far remain unchanged, grid data show. 

The Urengoy-Pomary-Uzhgorod is one of the oldest gas conduits linking Russia and Europe via Ukraine. Gas flows through Ukraine are scrutinized by the market as it remains the last route delivering Russian fuel to western Europe amid the Kremlin’s war in Ukraine. 

Dutch front-month gas futures, Europe’s benchmark, briefly surged as much as 6.6% on the explosion reports before trading lower. 

Steinmeier Calls on Xi “use his influence” on Russia (3:17 p.m.)

German President Frank-Walter Steinmeier asked Xi Jinping to “use his influence” on Russia to end the war in Ukraine in an hour-long phone call with the Chinese president to mark 50 years of bilateral relations between Germany and China on Tuesday, Steinmeier’s office said in a statement.

Bakhmut Servicemen Hand Zelenskiy Flag (1:45 p.m.)

Ukrainian soldiers in Bakhmut handed over the flag of Ukraine to the president, asking for it to be passed on to “our brothers in America.” 

“We have a difficult situation, the enemy is increasing its numbers,” Zelenskiy said in comments shown on the Freedom TV channel. “We will pass on to the US Congress, to President Biden, our gratitude for their support.” 

Ukraine’s Capital Restoring Water Supplies (12:04 p.m.)

Damage caused by Russia’s shelling is being fixed and water supply is resuming in Kyiv, according to mayor Vitali Klitschko. The power situation remains “critical” for the whole region, with 80% of residents still facing blackouts, the region’s military authorities said on their Telegram-channel.

More Than Half of Kyiv Has Power Problems, Ukrenergo Says (11:30 a.m.)

Less than half of power demand in Kyiv city is being met on Tuesday following Russian drone attacks, national grid operator Ukrenerego said on Telegram.

City authorities are prioritizing the supply of electricity to key infrastructure as the country’s energy system continues to experience a significant power deficit, Ukrenergo said.

Putin Says Situation in Southeastern Ukraine ‘Extremely Difficult’ (11:15 a.m.)

President Vladimir Putin said the situation in southeastern Ukrainian regions occupied by Russia is “extremely difficult,” following Ukraine’s success in wresting back control of an increasing part of this territory.

Putin referred to Donetsk, Luhansk, Zaporozhzhia and Kherson as “new regions of Russia,” in a video address on Tuesday marking a holiday dedicated to the country’s security agencies. 

Russia annexed the four provinces in September but has been steadily losing ground there in the face of a Ukrainian counter-offensive. Last month Russia withdrew from Kherson City, the only regional capital it controlled since invading Ukraine 10 months ago.

Ukraine to Get More Starlink Antennas (8 a.m.)

“SpaceX and Musk quickly react to problems and help us,” Mykhailo Fedorov, deputy prime minister and minister for digital transformation, said in an interview in Kyiv, adding that he spoke directly with Musk. 

“Musk assured us he will continue to support Ukraine. When we had a powerful blackout, I messaged him on that day and he momentarily reacted and has already delivered some steps. He understands the situation.” More than 10,000 devices, which provide internet service beamed down from satellites, will be sent to Ukraine, according to Fedorov.

Starlink played an important early role in the war, as Russia’s military focused on destroying communications. But Musk, SpaceX’s chief executive officer, drew the wrath of Ukrainians in October when he tweeted that Kyiv should remain neutral — an apparent suggestion that it not join military alliances like NATO — and should cede territory to Russia in exchange for a peace deal.

Kyiv Has Significant Power Cuts, Mayor Says (7:41 a.m.)

Periods of power cuts will be extended in the capital, Mayor Vitali Klitschko said on Telegram. There is enough power to supply critical facilities and about 20% of residents.

The oldest line of Kyiv’s subway network was partially closed for passengers due to a voltage drop, the subway operator said on Telegram. Two other lines resumed operation.

Ukraine Gets IMF Nod for Non-Cash Program (1:21 a.m.)

The International Monetary Fund’s management approved a new four-month program for Ukraine that doesn’t envisage lending money but may serve as a bridge to a multi-billion-dollar loan package.  

The IMF executive board discussed so-called program monitoring with board involvement, or PMB, for the war-torn nation on Monday, the Washington-based lender said on its website.

The PMB “is tailored to Ukraine’s exceptional circumstances,” and helps the nation’s government implement prudent policies and catalyze donor financing,” IMF First Deputy Managing Director Gita Gopinath said.

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Amazon, P&G Fall Short on Environmental Paper Goals, Group Says

(Bloomberg) — Companies from Procter & Gamble Co. to Walmart Inc. are lagging in efforts to mitigate environmental impact from the paper products they make and sell, according to a new report from an advocacy group. 

Environment America assessed the progress of six companies on their use of virgin fibers and indirect greenhouse-gas emissions. The group also looked at whether they obtained consent from Indigenous communities whose land is used for pulp supplies. It found most of the firms lacking, either because they hadn’t made explicit promises to address those issues or because their plans didn’t go far enough.

“The industry has made progress, but it still has a long way to go,” report author Sammy Herdman said in an email. “Companies should prioritize providing consumers with sustainable products that don’t harm our forests.”

The group assigned grades from A through F based on its criteria. Walmart was given an F because it doesn’t disclose how many products are made with 100% recycled fiber or other non-virgin wood, according to the report. In addition, its goal to reduce indirect greenhouse-gas emissions isn’t as ambitious as what Environment America recommends, and it has “no public policy relating to the free prior and informed consent of Indigenous communities.” The other three companies given a failing grade for similar reasons were Costco Wholesale Corp., Amazon.com Inc. and privately-held Georgia-Pacific, which makes toilet-paper brand Quilted Northern.

P&G, which received a D, released a bamboo toilet paper product this year, which the advocacy group said is a “step in the right direction.” But it said the Charmin manufacturer’s emissions could be improved.

In November, another environmental group called on US regulators to review P&G’s claims to investors about its wood-pulp sourcing policies. The consumer-goods giant issued a policy update earlier this year pledging to preserve forests “for generations to come.”

Kimberly-Clark Corp. got the best grade — a C — because it has already committed to cutting  its use of “natural forest fibers” by 50% by 2025. However, the Cottonelle maker doesn’t have an explicit policy on “informed consent” with Indigenous communities, Environment America said, adding that the company could also have a more ambitious emissions-reduction target. 

In a response to questions about the report, Georgia-Pacific, which is owned by Koch Industries Inc., said it follows guidelines on forest protection and sustainable practices. The company said its suppliers are private companies that are approved by local governments — and Indigenous groups help to determine how the these suppliers use the land. Georgia-Pacific is also working to reduce greenhouse gases by improving energy efficiency and using new technology, the company said in an email.

Kimberly-Clark said it’s progressing toward its goal of sourcing 90% of its tissue fiber from “environmentally preferred sources” by 2025, with 87% coming from such sources in 2021. The company said it reduced its use of forest fibers by 34% in 2021 from its 2011 baseline and is “committed to unlocking further reductions through innovative new materials and technological solutions.” An increasing percentage of virgin wood fiber used by Kimberly-Clark is certified by the Forest Stewardship Council, a nonprofit group that promotes responsible forestry, the company said in an email. The FSC “applies the most rigorous criteria for the conservation of biodiversity and the protection of the rights of Indigenous communities,” Kimberly-Clark said. 

P&G said it has “comprehensive policies, practices and investments” in order to “ensure no one has to choose between the products they use today and what they hope to preserve for tomorrow.” In an emailed statement, P&G said it has strengthened its supplier policies and audits in the areas of human rights and forest protection. The company said it received a score of A- for wood pulp in the CDP Forest Survey. 

Walmart referred to its Project Gigaton climate plan, which aims to “engage suppliers, NGOs and other stakeholders in climate action with a goal to reduce or avoid one billion metric tons (a gigaton) of greenhouse gas emissions in the global value chain by 2030.” 

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Magna to Buy Veoneer Vehicle Safety Unit for $1.5 Billion

(Bloomberg) — Magna International Inc. has agreed to buy a driver-assistance unit from SSW Partners for about $1.5 billion following a drawn-out battle to control the previous parent of the business, Veoneer Inc. 

The purchase will complement the Canadian-Austrian automotive supplier’s advanced driver-assistance business, with combined sales expected to reach $3 billion in 2024, Magna said Tuesday. The cash acquisition will also add engineering resources and expand the company’s customer base. 

Magna fell 2.2% to $55.81 at 9:46 a.m. in New York. The shares have fallen 31% this year. 

“We plan to accelerate innovation by building on both organizations’ strengths, including customers, suppliers, technology partners and employees,” Magna Chief Executive Officer Swamy Kotagiri said in a statement. 

Carmakers and suppliers have been fine-tuning their approach to self-driving and driver-assistance systems after struggling to deliver meaningful progress on deploying robotaxis on public roads. Volkswagen AG and Ford Motor Co. last month pulled their support from self-driving firm Argo, after pouring billions into the startup. Other carmakers like Tesla Inc. have also fallen short on self-driving goals. 

Magna’s deal follows a takeover battle last year that saw Qualcomm Inc. partner with private equity group SSW to take Veoneer private for $4.5 billion. The US chipmaking giant took the Arriver autonomous-driving software operation, while SSW worked alongside Veoneer management to buy the rest of the Swedish company with plans to sell it onwards. 

The Qualcomm group trumped an earlier offer from Magna.

Read More: 

SSW Partners Is Said to Prepare Auto Supplier Veoneer for Sale

Qualcomm Prevails Over Magna With $4.5 Billion Veoneer Deal 

(Adds share price move in third paragraph)

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Amazon Seals EU Antitrust Truce to Dodge Fines, Boost Rivals

(Bloomberg) — Amazon.com Inc. settled European Union antitrust investigations over how the U.S. ecommerce giant allegedly abused rivals’ sales data to unfairly favor it own products and squeeze out other traders on its platform. 

The European Commission said Tuesday it accepted a number of proposals from Amazon, including a vow to stop using non-public data on independent sellers on its marketplace for its competing retail business. 

Amazon also pledged to address concerns about the way its Buy Box for showcasing specific offers and Prime unduly favored its own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services. The commitments include a promise to display a second Buy Box, immediately underneath the first one. 

“Today’s decision sets the rules that Amazon will need to play by in the future instead of Amazon determining these rules for all players on its platform,” EU Antitrust Commissioner Margrethe Vestager told reporters in Brussels. “With these new rules, competing independent retailers, carriers and European customers will have more opportunities and choice.”

The settlement is the latest round in a long-running Europe-wide crackdown on the market power of tech firms such as Google, Apple Inc. and Meta Platforms Inc. that’s led to multiple probes, fines and beefed-up laws. While the deal takes off some of the regulatory pressure Amazon has been facing over accusations it has become too dominant a force in European ecommerce, the tech company continues to be subject to scrutiny from Germany’s Federal Cartel Office and the UK’s competition watchdog.

Read More: Meta Hit With EU Antitrust Charges Over Marketplace Service

Seattle-based Amazon said that despite the settlement, it continues to “disagree with several of the preliminary conclusions” the EU’s antitrust arm made. It said it has “engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium sized businesses selling through our stores.”

Amazon shares were little changed at $84.97 at 9:42 a.m in New York, while the Russell 3000 Index Diversified Retailers Subsector declined.

Vestager said the second Buy Box will give more visibility to independent sellers and will offer consumers “a greater variety of offers.” The EU will monitor how this will work and will be able to request “adjustments to the presentation” if it doesn’t attract consumers enough, she said.

Amazon will have to implement its commitments by June 2023. The commission said that a violation of the agreed deal could then result in a fine of up to 10% of the company’s worldwide sales, without the EU regulator having to prove an infringement of antitrust rules — or a periodic penalty payment of 5% per day of Amazon’s daily revenue for every day of non-compliance.

(Updates with more about a second Amazon Buy Box in third paragraph)

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Congress Releases Year-End Spending Bill as Deadline Nears

(Bloomberg) — US lawmakers have agreed to a $1.7 trillion funding bill and plan to ram the compromise legislation through the House and Senate this week to avert a Dec. 24 government shutdown. 

The bill, which would provide funding for government agencies through the Sept. 30 end of fiscal 2023, includes $858 billion for national defense, a $76 billion increase over current levels. Domestic agencies would see $773 billion. 

The White House Office of Management and Budget has urged passage of the legislation, but it could get tied up in the Senate, where any one senator can cause procedural delays that would threaten passage by the deadline. Utah Republican Mike Lee warned on Twitter that senators shouldn’t assume he and others would cooperate with passing the bill by the deadline.  

The measure would provide more than $45 billion to aid Ukraine in its defense against Russia’s invasion. This aid may be the last for Ukraine for a while given significant House Republican skepticism about the war effort. The bill also includes $41 billion in disaster relief for US communities affected by recent hurricanes and wildfires.

“The pain of inflation on American families is real, and it is being felt right now across the federal government,” Senate Appropriations Chairman Patrick Leahy said in a statement upon releasing the bill. “From funding for nutrition programs and housing assistance, to home energy costs and college affordability, our bipartisan, bicameral, omnibus appropriations bill directly invests in providing relief from the burden of inflation on the American people.”

The 4,155 page bill was filed after 1 a.m. Tuesday.  

The release of the bill was delayed for hours as Democrats squabbled over language concerning the location of a new headquarters for the Federal Bureau of Investigation until a compromise was reached to satisfy lawmakers from Maryland and Virginia. The compromise, brokered by Senate Majority Leader Chuck Schumer, requires consultations with lawmakers from both states, according to an aide. 

In the overall bill, the majority Democrats agreed to a roughly 10% increase to defense funding while limiting non-defense funding to a 5.5% increase to gain enough Republican support to pass the measure under the Senate’s filibuster rules. Funding for veterans’ programs would receive a 22% increase, Leahy said. 

Competing Boasts

Each party underscored different parts of the package as accomplishments.

Republicans pointed out that the legislation would provide US troops with a 4.6% pay raise and would expand a program to hire more police officers by 32%. 

Democrats boasted that the legislation increases grants for child care by 30%, along with more money for the National Institutes of Health, the Environmental Protection Agency and the National Park Service.

The Senate will vote first and intends to pass the measure before Thursday, leaving the House no time to demand changes before the Christmas holiday. Meeting the deadline will require cooperation of all senators. 

The sequence of votes is to help House Speaker Nancy Pelosi handle the tiny two-vote majority she now holds and ensure her members back the bill. Some progressives are expected to oppose the large increases for defense and policing.  

House Republicans were left out of the negotiations and have argued that any bill should wait until at least January when they will take over the House. They are expected to mostly stick together in voting against the bill, heightening the need for Democrats to be unified. 

Senate Republican leaders have concluded that the narrow and fractious GOP House majority would be unable to complete the fiscal 2023 spending bill anytime soon, and instead chose to compromise with Democrats. Senate GOP leader Mitch McConnell portrayed it as a victory.

“President Biden wanted to cut defense spending and grow liberal domestic spending in real dollars,” McConnell said on the Senate floor. “But Congress is rejecting the Biden Administration’s vision and doing the exact opposite.”

For the GOP, that means forgoing a chance to claw back money for more Internal Revenue Service agents that was part of the Democrats’ Inflation Reduction Act, though Republicans were able to block any further increases to the IRS budget. The IRS regular budget receives a small cut in the bill.

The bill continues funds for family planning but Democrats abandoned an attempt to green-light tax-payer funded abortions by stripping out the so-called Hyde Amendment containing the prohibition. 

Election Integrity

The legislation would change the way electoral votes are counted for presidential elections, clarifying that the vice president doesn’t have the ability to toss out Electoral College votes. The inclusion of the Electoral Count Act is intended to prevent a repeat of the Jan. 6 insurrection, which was inspired by unfounded claims the 2020 election was stolen and that then-Vice President Mike Pence had the ability to declare Donald Trump the winner. 

Of interest to China-watchers: Along with $2 billion in weapons funding for Taiwan, the bill contains a ban on downloading the social media app TikTok to government phones. A proposal to ban Chinese telecommunications company Huawei from the US banking system wasn’t included, however. 

The bill also contains changes to tax-shielded retirement accounts, would reauthorize Food and Drug Administration fees and finance Medicaid in Puerto Rico and other territories.

And it would provide $1.8 billion to boost semiconductor-related innovation authorized in Biden’s signature CHIPS act. 

Chopping Block 

Lawmakers were unable to attach a bevy of other congressional priorities to the must-pass legislation despite weeks of negotiations.  Among the items on the cutting-room floor are a deal on corporate tax breaks, including the expensing of research and development spending. Democrats had demanded a revival of the 2021 expanded child tax credit in exchange, which Republicans deemed too costly.

An administration request for billions in coronavirus funding was ignored, as were a last-minute attempt to attach changes for farm-worker visas and to impose new FDA oversight over commercial laboratory testing. 

West Virginia Senator Joe Manchin attempted to add changes to energy project permitting, but he was rebuffed. 

Lawmakers are also forgoing the opportunity to attach an increase to the nation’s $31 trillion debt ceiling to the bill, setting up a fight next year with House Republicans. They plan to use the need to stave off a payments default in the second half of 2023 to seek cuts to domestic spending. 

–With assistance from Laura Davison and Laura Litvan.

(Updates key provisions starting in third paragraph)

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Electric Cars May Be Eligible for Full Tax Credit as US Delays New Rules

(Bloomberg) — Some restrictions on the electric-vehicle tax credit that were slated to take effect Jan. 1 will be delayed until March after the US Treasury Department postponed issuing related guidance on how to meet the new requirements.

The climate-spending bill pushed through Congress earlier this year included restrictions on the potential $7,500 credit consumers can claim for buying electric vehicles. The goal was to push the auto industry to increase the percentage of battery components made in North America and to favor using critical materials extracted or processed in countries with which the US has a free trade agreement.

The Treasury Department says those restrictions, which were supposed to phase-in starting in January, can’t take effect until it issues a proposed rule detailing how to meet the requirements. That rule is now expected in March, the department said in a notice, adding that “information on the anticipated direction” of those requirements would be published by year’s end. 

The delay in the sourcing requirements could be beneficial to General Motors Co., which has previously indicated it might not be eligible for the full value of the credit because of the rules, said Corey Cantor, an electric vehicles analyst with Bloomberg NEF.

Even so, there’s limited upside potential to incremental sales because the supply of EVs is still tight and because credits will still be limited to consumers under certain income levels, said Joe Spak, an analyst at RBC Capital Markets. One exception may be for Tesla Inc., whose availability of vehicles “seems to be improving,” he said. 

“There may be a short period of time in early 2023 when certain EVs qualify when they won’t later in the year,” Spak wrote in a note Tuesday. 

Read more: Manchin seeks to block Korean lobbying push on EV rule

Other restrictions contained in the spending bill, including new caps on the income of buyers and vehicle retail prices, will still take effect Jan. 1. Some limitations, including a mandate that all vehicles eligible for the credit be made in North America, took effect upon the bill’s enactment. 

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