Senate Passes Trump's Megabill & The AI Band Blowing Up On Spotify
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the GOP's mega bill is one step closer to being law after the Senate approved it 51 to 50. Then a key California environmental law was just scaled back that could lead to more housing being built. It's Wednesday, July 2nd. Let's ride. ♪

Good morning and happy July 4th Eve Eve. Heads up before we dive into the news. Toby and I recorded this pod yesterday afternoon so we could hop on the road to see friends and family and hope you're able to clock out of work soon if you haven't already. The slip and slide awaits.

As for the rest of the week, we have two great episodes for you to listen to while you're lathering on the sunscreen. Tomorrow is a first half and review show where Neil and I hand out some H1 awards and also make some bold predictions for the rest of the year. Then on Friday, we have an interview episode with a personal finance whiz that will have you rethinking your attitude towards saving, spending, and whether to buy one or two dozen hot dogs for your grill-out performance.

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cup. Head to Taco Bell dot com slash morning dash brew to learn more. That's Taco Bell dot com slash morning dash brew. Legal disclaimer at participating Taco Bell locations for a limited time only while supplies last. Agua refrescas are made with artificial colors and natural fruit flavoring and contain less than one percent juice. Rockstar energy refrescas contain 200 milligrams of caffeine and are not recommended for children, pregnant or nursing women or persons sensitive to caffeine.

Well, they did it. Republicans narrowly passed President Trump's sweeping tax and spending bill in the Senate by a razor-thin 51-50 margin, with Vice President J.D. Vance casting the tie-breaking vote. The marathon 24-hour voting session clears the way for Trump's second-term agenda that focuses on extended tax cuts, new tax breaks, reductions in Medicaid spending, and more money for border enforcement and defense.

On the tax front, it would extend the large cuts put in place during his first term, avoiding the politically disastrous scenario of taxes rising across all income brackets. It also introduces new spending on the military and immigration enforcement. To justify the extended tax breaks, the bill aims to make deep cuts to Medicaid spending, the clean energy industry, student loans, and food stamp programs.

The cuts, however, are not nearly enough to cover the bill's massive cost, with the Congressional Budget Office estimating that a previous version of the bill released over the weekend would add $3.3 trillion to the national debt over the next 10 years. Republicans also made a number of last-minute changes to the bill to get it across the finish line, including delaying nutrition aid cuts for certain states, doubling a rural health fund to $50 billion, and scrapping the more aggressive wind and solar tax.

Now the bill heads back to the House for another vote before hitting Trump's decks ahead of its desired July 4th deadline. But the bill lives, Neil. This is a monumental moment that will ripple through the American economy for years to come. In championing this bill, Senate Majority Leader John Thune, a Republican, said that the bill would deliver on all

the promises Trump had campaigned on. No taxes on tips, no tax on overtime, lower taxes for seniors, for Social Security recipients as well. One thing to know about the particular tax changes of this bill is that 62% of households would see a tax cut from the tax measures passed in this Senate bill. That's according to this Tax Foundation analysis, which was released on Tuesday. It also, according to pretty much every individual

independent analysis would be a regressive on net tax on Americans, which means that the benefits would accrue mostly to people in the top 20% of income while the people in the bottom 20% of income in the United States would see their, uh,

wealth actually dinged. According to the Yale Budget Lab, here are some numbers, this act would reduce income by 2.9%, which is about $700 for the bottom 20% of households. And then for the top 20%, it would raise income by 2.2%, $5,700. So that is where a lot of the criticism from Democrats and even some of the Republican holdouts, there were three,

is directed at where you're seeing a tax cut for the rich while you're burdening and rolling back social safety spending on the bottom 20%. The lawmakers that back this legislation, they see it as a chance to boost economic growth and also, you know,

continue the agenda of cracking down on immigration. But the people who opposed the bill, mostly Democrats, said that this is a wealth transfer from low-income households to the wealthiest Americans. And one of those low-income households that Democrats

Democrats are focusing on that will lose some benefits are people who are on food stamps, who are also potentially losing health insurance. The bill's on track to cut 20% of spending on food stamps. That's the SNAP program that you've heard of. And they think that it could cut Medicare for 20%.

12 million people. And there's a ton of overlap here. 30 million of the 38 million people receiving SNAP in 2022 were also enrolled in Medicaid. So that is one of the potential hangups for the Democrats here, where they're saying that this is going to impact

adversely the bottom percentile of Americans when it comes to income. What didn't get into the bill is worth is of note for the business community. In a previous version of the bill, there was a moratorium on states regulating artificial intelligence. This measure was endorsed by most of the Silicon Valley leaders and companies that you've heard about, OpenAI and Microsoft. But

early Tuesday morning, senators voted 99 to 1 against this measure, delivering a win for advocates of AI safety and regulation. So a big loss for Silicon Valley in terms of the fact that this AI regulation moratorium was stripped out of the bill before it was passed. And then speaking of Silicon Valley, one person kind of

Tangent to Silicon Valley, who is really upset about this, is Elon Musk. He thinks that this bill is fiscally irresponsible. He went on a little bit of a tirade on X, saying every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame. He said that he's going to do everything in his power to make those lawmakers lose their primary. He said that if it's the last thing I do on this earth, and then he even floated the idea of

starting a new political party called the America Party. So that bifurcation between the Trump camp and the Elon Musk camp is only growing wider after this bill is passed. And in response to that, Trump said he might look into deporting Elon Musk back to South Africa. So those fissures that emerged...

at the beginning of the debate of this bill are only growing wider. What happens next? This bill has to go to the House to get approved, and then it will go to President Trump's desk. But a monumental moment for tax policy, for the economy of the United States that will ripple for years to come.

Okay, remember that public toilet in San Francisco that took four years to make and had an original budget of $1.7 million, a symbol of California's dysfunction and bureaucracy when it came to actually building things? The state is trying to turn a new page.

In a major announcement late Monday, California leaders rolled back a strict environmental law that critics say was needlessly hamstringing development projects, fueling the state's soaring housing prices and homelessness crisis. The California Environmental Quality Act, better known as CEQA, was signed into law in 1970 by none other than Governor Ronald Reagan. It was intended to safeguard sensitive habitats by requiring extensive public disclosure of the potential environmental impacts of new developments.

But, opponents say, it grew into a monster that stifled the building of pretty much anything. That's because CEQA allows any individual or group to sue to stop a project if they show the environmental assessment to not be detailed or thorough enough. In recent years, it's resulted in the delay of a new bike path

in San Francisco, ostensibly what environmentalists would want, and block the construction of a new dorm at UC Berkeley over concerns of social noise pollution. Developers say they are hesitant to build anything due to the open-ended threat of CEQA lawsuits. Democratic Governor Gavin Newsom heard these concerns...

and dismantled CEQA requirements for urban infill developments in the state, meaning that most new apartment buildings in California will no longer face the risk of endless environmental litigation. Toby, a huge win for the YIMBY movement, Yes In My Backyard. Yeah, and a big loss for the environmental movement. It just shows how the priorities have shifted in California and how much

Voters and now the lawmakers are looking at affordable housing as the core issue right now that is affecting so many people. And you see that in the wider, quote unquote, abundance movement that has emerged over the last few months that

of course, is tied to Ezra Klein and Derek Thompson's book that was released with the title Abundance. Essentially, this idea is you approach problems by planning for the abundance of things people need rather than regulating from a scarcity mindset and that they think it's a big shift for the Democratic Party in these blue states. So pulling back from CEQA is exactly that thing of it

ditching the scarcity mindset because it caused less housing to be built. So it is a world for this new worldview that is a win for this new worldview that is taking over specifically the Democratic Party right now. And they need to build housing in California. There is no question. Nine of the 10 least affordable cities in the country are located in California. That's according to a mayor report by Orbiton.

WalletHub. And the heart of the problem here is that they're just not able to build, perhaps because of CEQA or any other types of regulations. The state needs 3.5 million units to be built to fulfill all the demand. Only about 100,000 units are built annually. Gavin Newsom has

sort of taken the mantle here and said, we really need to address this. After years of letting it language and having this major homelessness crisis, people are moving out of the state because it's become simply too unaffordable. He and he has sort of taken the abundance mantle and even name checked that particular book. It's been so influential in driving democratic discourse and saying we need to roll back regulations here. We need to start building stuff.

Let's move on. The hot new band Velvet Sundown is gaining a following on Spotify, racking up half a million monthly listeners with their twangy country rock vibe and hits like Dust on the Wind and Drift Beyond the Flame. The only issue is Velvet Sundown isn't real. Yep, we got ourselves another AI controversy on our hands. Velvet Sundown's mix of classic rock with a dash of auto-tune doesn't immediately set off alarm bells if a song came up on your playlist.

The lack of any real identifiable information on the group's Spotify page is what eventually got listeners' spidey senses tingling. First, the band has four members which don't appear to exist outside of the band's own social media handles, handles that are filled with

clearly AI-generated images of the band. Things got even murkier when the band's fledgling X account posted a thread claiming they were very much real, prompting many to wonder if this was all just some big Nathan Fielder experiment. Whatever their origin story, Velvet Sundown have found their way onto a mysteriously large number of user-created playlists which helped boost its listenership and set off a renewed round of debates around AI's place in the music industry. Spotify happily exclaimed

I mean, some of the details here are quite hilarious. They're banned music.

bio on Spotify. They had this quote attributed to billboard that said, they sound like the memory of something you never lived and somehow make it feel real. After that was called out, the billboard mentioned got stripped out. The description of their bandmates says vocalist and a

These sound AI made up. I mean, even if you've used ChatGPT or any other LLM, it seems very much in line with what you would expect. If I input, make up some bandmates for me, this is kind of exactly what it would spit out. So not a surprise that it raised some alarm bells. And a lot of the band's Instagram is flooded with comments calling out the use of AI. But a lot of people are saying, wait, there's nothing inherently wrong with

wanting to listen to AI-generated music. You can go on YouTube right now and listen to full playlists of AI-generated music, but the frustration comes from the fact that people should know it is AI rather than a band posing as real and actually being AI. But that line is only getting blurrier and blurrier, especially because Spotify doesn't have any labels right now. They have no real fact-checking that says AI

a song is AI or not. So it's really the mechanism of how it's being delivered that has people up in arms, not necessarily the fact that the music is AI generated itself. But some of the biggest names in music are fully leaning into AI, even as many human musicians are criticizing it. So Timbaland, who is this God tier producer, a few weeks ago said,

said that he signed the first non-human artist to his AI record label, which is called Stage Zero. This non-human artist is named Tata, and Timbaland is full bore on AI. He says that the new artist, human artist, now we have to distinguish between the two, that are coming out now are completely boring and completely soulless to him, and he feels like AI is the next frontier for music. This is a huge name that is fully leaning into artificial intelligence as perhaps the future of music.

So Velvet Sundown if you're looking for a weird kind of soulless soundtrack to keep your 4th of July weekend company. Up next, we're gonna talk about a controversial AMC change.

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Before

Before you watch any movie at an AMC theater, you hear Nicole Kidman say dramatically, we come to this place for magic. Well, it needs an update. We now come to this place for commercials. As of Tuesday, AMC has begun placing ads right before the movie starts, what's known in the industry as the platinum spot.

The deal, announced with ad company National Cinemedia last month, will give AMC a much-needed short-term boost in revenue but could dent its brand over the long term as audiences are forced to sit through an even longer period of trailers and ads before the feature begins. AMC features a disclaimer on its website stating that movies start 25 to 30 minutes after showtime. That could be extended with the new ad slot.

Stuffing more ads into the pre-movie experience is also a 180 from six years ago when AMC got on its high horse and said it wouldn't do this. In 2019, Regal and Cinemark struck a deal with Cinemedia to include as much as five minutes of commercials after a movie's start time plus a 30 to 60 second ad in

in that platinum spot. At the time, AMC said it flatly rejected the offer from CineMedia, predicting U.S. moviegoers would react quite negatively to the concept. Fast forward to 2025, it seems that's a reputational risk AMC is willing to take. Yeah, because they looked at their competitors and realized that, wait a second, they haven't really seen any direct impact in their attendance so far.

that was related to this additional ad spot. But that's not to say there aren't downsides. For one, movies are supposed to be that escapism that Nicole Kidman talks about at the beginning of AMC featured presentations

which is why they should not be a place for a commercial. They're supposed to feel different from your couch. They're supposed to feel different from just sitting there and being inundated like ads like most of us are when we're watching normal TV. It's part of the reason why IMAX has done so well in recent years is because it does feel like it's spectacle. It is very much different from your couch experience. So that is one of the long-term reputational risks that

AMC was trying to avoid, you know, a few years ago, but they kind of went to the sirens called little extra ad revenue because they do need it right now because the box office is down. And according to industry experts, this is a very lucrative and very attractive ad spot because

You have a very much captive audience because if you take out your phone, people are going to look at you askance. And, you know, you you're fully tuned in to a particular screen in a way that most people are not anywhere outside of the movie theater. AMC does need the revenue.

had a really bad Q1 in its first quarter financial report. It said that the industry had its worst start to a year since 1996, excluding the COVID-19 pandemic. Does seem like box office has picked up over Memorial Day weekend. We had that record-setting

box office numbers over MDW. So things are picking up at AMC is still in a tight financial spot and it's going to take all the money it can get. It looked to its rivals, Regal and Cinemark and didn't see much of a negative impact. So it's willing to take that gamble. I do think a funny trickle down effect of

this is that they did finally put in writing exactly how long after the preview start the movie actually comes on which is that you know 25 to 30 minute window everyone kind of knew this like everyone knows you don't have to show up directly on time but nowhere has it actually been codified down on their website and amc did it this time so next time you are running late remember you have that

30 minute buffer. At least people are already being trained to do this so far this year, 42% of movie goers in Los Angeles were in their seats in time to see every trailer that's compared to 55% last year. So a huge plunge and New York were also learning, but not as much as New York. 42% of movie goers were in their seat for the first trailer this year compared to 47% last year. So we were already kind of hip to, uh, what was going on.

Let's sprint to the finish with some final headlines. Records are falling across Europe as a heat wave is gripping the continent with no signs of letting up. In France, temperatures topped 104 degrees Fahrenheit. Portugal set an all-time high for June, clocking 157.

15.9 degrees in Mora and Seville Spain saw 109 extreme heat can be especially brutal and dangerous in Europe where many households don't have air conditioning and neither do public spaces half of Paris's Metro system doesn't even have AC meanwhile just be thankful you're not playing

The tennis tournament in London set a temperature record for its opening day on Monday with the thermometer topping 90 degrees on the grounds. Yeah, the temperatures in southern France were specifically so high over the weekend that they shut down their nuclear reactor because they didn't want to discharge the heated water into an already very hot river that would endanger the wildlife. So it just shows you how important

intense these temperatures are right now. And specifically, a statistician at the London School of Hygiene and Tropical Medicine called out to Politico that this heat wave could cause more than 4,500 excess deaths between June 30th and July 3rd. So it's not just an annoyance. It is a public safety issue, especially in a region where air conditioning is not very common.

Amazon is getting extremely close to a pretty insane milestone. There are almost as many robots working in its warehouses as humans. The e-com giant said that there are more than 1 million machines active at its fulfillment centers, making sure your meat thermometers are arriving in time for your 4th of July cookout. It's been a remarkable scaling up of its robotic workforce, one that Amazon says now helps with 75% of its global deliveries.

helping productivity and relieving some of the strain on human workers. Now you might be thinking, hmm, relieving strain, that's an interesting way of framing workforce cuts, and you're partially right. Robots are helping Amazon slow hiring, bringing the average number of employees per facility down to just 670 last year, the lowest in 16 years.

But Amazon says it's also creating new jobs in the process, like robot technicians, which require less manual labor. Neil, one million robots is a lot of robots. It's so much, and it really is improving efficiency when you look at the stats. The number of packages that Amazon ships

per employee each year has jumped from 175 in 2015 to nearly 4,000 today. They are deploying robots at a very fast pace across their fulfillment centers. Seventy-five percent of Amazon's global deliveries are assisted in some way by robotics. Of course, you have to wonder what does this mean for Amazon's workforce, which is

is the second largest workforce in the entire country. Amazon's going to say that they're moving to higher paying jobs, overseeing the robots. Critics would say that they are going to eliminate those jobs. And Amazon CEO Andy Jassy said a few weeks ago that

Eventually, ultimately, Amazon's workforce will be less than it is now. But whenever you talk about Amazon, it's sort of a canary in the coal mine. It's a harbinger of things to come because it's deploying technology the fastest. So as Walmart, as any other retailers looking what Amazon's doing with these insane levels of robot deployment, you know, that's going to come to other workplaces as well.

Hope you're hungry because Burger King Japan is rolling out a new burger that could fill you up for weeks and keep you in the bathroom for even longer. As part of a partnership with the Japan Sumo Association, Burger King unveiled a 1900 calorie behemoth of a sandwich with five beef patties, four slices of bacon and four slices of cheddar cheese. It weighs 668 grams or about one and a half pounds and costs eighteen dollars.

Toby, you've never met a challenge you haven't faced head on. Can I interest you in a 1900 calorie burger? Absolutely not. The thing I want less of is fast food burger patties here. And this burger has five of them stuffed into one. I do think it's a fun promotion, though, you know, associating yourself with sumo sumos obviously have to eat a lot. And Burger King does like to do these

big marketing swings. This is not their first collab this year. They also released a pickleball burger earlier in collaboration with the Pickleball Japan Federation. So they're clearly trying to make inroads in different markets in the international space. But I do encourage you to look up this burger. It's even taller than you could possibly imagine. Five patties. That is too many patties. If you're playing the Toby mentions pickleball game, take a drink. Take a bite of your burger.

Speaking of lots of cheese, I regret to inform you that it might be giving you nightmares. No, not nightmares on the toilet. Actual bedtime nightmares that could be messing with your sleep, according to a new study in the Journal of Frontiers in Psychology. Researchers surveyed sleep habits and dreams in conjunction with eating habits and

And a key finding was that the worse symptoms of lactose intolerance people had, the more intense their nightmares were. It may not be anything specifically in the cheese that is causing you to have the recurring nightmare of your teeth falling out. The researcher said it's probably just the anxiety that comes from gastrointestinal stress that are causing you to have intense dreams.

Put more plainly, your tummy aches from eating too much dairy are stressing you out, which is in turn causing you to run in slow motion while an axe killer chases you. So, Neil, unfortunately, no Burger King sumo burgers for you before bed. No, I know at bed, at breakfast, at lunch, I will happily pass on that. The idea that cheese is

eating late at night leads to nightmares actually has been around for over a century in 1904, the American newspaper comic strip dream of the rare bit fiend showcases character who had a nightmare bizarre dream after consuming Welsh rare bit, which is this cheese sauce served on toast. So this has been a part of the American imagination for a very long time. Finally, some scientists are doing something about it and we're learning a little more nuts and bolts.

I just can't believe that. Like, jeez, like I do love cheese and it's giving you those tummy aches essentially that are causing you to have like these micro wake-ups that are interrupting your sleep. I think a lot of people anecdotally have probably experienced this because if you go to bed with your stomach hurting, you're not going to sleep very well. But it turns out that if you do have lactose intolerance, it could be leading to those wacky and crazy dreams that you are having. Who is eating cheese before they go to bed? I've done it.

A little charcuterie board before bed? Come on, live a little, Daniel. He's looking at me crazy. I can't tell if you're being serious. I have done that. I really have. Yeah, it seems to me like the last thing you'd want to eat before you go to bed, whether you have nightmares or any other issues. Okay, that is all the time we have. Thanks so much for starting your morning with us. Have a great day.

Have a wonderful Wednesday and safe travels if you're hitting the road. If you have any thoughts on today's episode, send an email with questions, comments, or feedback to morningbrewdaily at morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and Makeup is selling two tickets for the Velvet Sundown show at Red Rocks. If you're interested, send them an email. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. Let's run it back.

- Tomorrow. - Oh man, I am fading. I either need an iced coffee or vacation or both. - Toby, what if I said you could get the benefits of both in one cup? - What? - That got all over the studio. But yes, Taco Bell's new lineup of refresca drinks are like a little out of office in a cup. - So I am to believe that agua refrescas with green tea and freeze dried fruit, Rockstar Energy Refresca with extra energy and the new Refresca Freeze are all handmade to order? - That is correct.

He left. Anyway, head to Taco Bell dot com slash morning dash brew to learn more. That's Taco Bell dot com slash morning dash brew. At participating Taco Bell locations for a limited time only while supplies last. Agro refrescas are made with artificial colors and natural fruit flavoring and contain less than one percent juice. Rockstar Energy refrescas contain 200 milligrams of caffeine and are not recommended for children, pregnant or nursing women or persons sensitive to caffeine.