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Senate Majority Leader Charles Schumer (D-N.Y.) and Joe Manchin (D-W.Va.) reached a surprise deal on a reconciliation bill earlier this week, shocking Democrats and leaving Republicans feeling betrayed.

Why this was such a surprise: “[L]ess than two weeks earlier, the talks between Schumer and Manchin fell apart in dramatic fashion, when Schumer signaled he would proceed with a scaled-down budget reconciliation bill that included only prescription drug reform and a two-year extension of expiring Affordable Care Act subsidies.” 

What happened — things got a bit heated: “Manchin admitted Thursday morning that he and Schumer lost their tempers in a heated discussion on July 14 when the Democratic leader accused him of ‘walking away’ from a deal after months of negotiations.”  

Then what happened?: “Manchin said he bumped into Schumer again the following Monday and their tempers had cooled at that point.” 

The full story of what happened behind-the-scenes, via The Hill’s Alexander Bolton 

The Associated Press’s Seung Min Kim tweeted about her colleague Lisa Mascaro’s story: “One bit of color from the Biden-Manchin phone call Wednesday when they discussed the reconciliation deal: The two men, both isolating with COVID, compared their symptoms.” The full AP story 

Sen. Kyrsten Sinema (D-Ariz.) still won’t say whether or not she will support the negotiated reconciliation bill. 

One of the dynamics at play: “Sinema has already expressed her support for setting a 15 percent corporate minimum tax for companies that earn more than $1 billion in profits … But the bigger question is whether she’ll agree to close the carried interest tax loophole that allows asset managers to pay only a 20 percent capital gains tax rate on income earned from managing profitable investments.”  

The plot thickened yesterday: Sinema did not attend a special Senate Democratic Caucus meeting yesterday where Senate Majority Leader Charles Schumer (D-N.Y.) explained the deal. What we know about Sinema’s position, via The Hill’s Alexander Bolton

“Across the broad spectrum of the diverse caucus, Democratic lawmakers are praising the surprise arrival of Manchin’s proposal, saying it takes great strides to help ensure health care access, fight climate change and bring fairness to the tax code.” Why House Dems are supportive, via The Hill’s Mike Lillis 

Via CNN’s Ella Nilsen

Via The Hill’s Zack Budryk

HAPPY FRIDAY! I’m Cate Martel with a quick recap of the morning and what’s coming up. Did someone forward this newsletter to you? Sign up here. 

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“A June surge in gasoline prices fueled much higher inflation and a dip in household spending power, according to data released Friday by the Bureau of Economic Analysis (BEA).”  

The numbers: “The personal consumption expenditures (PCE) price index, a key gauge of inflation, rose 1 percent in June and 6.8 percent annually last month, according to the BEA. The monthly inflation rate rose from 0.6 percent in May and the annual inflation rate rose from 6.3 percent that month.”  

What this means for the economy, via The Hill’s Sylvan Lane 

It’s never been more important to be transparent about how companies are progressing toward a more sustainable and inclusive future. As one of the world’s largest brands, McDonald’s is committed to doing just that. Click here to learn more about their progress in their recently released Purpose & Impact Reporting.  

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Via NBC News’ Melissa Chan, Phil McCausland and Daniel Arkin, “Blindsided veterans erupted in anger and indignation Thursday after Senate Republicans suddenly tanked a widely supported bipartisan measure that would have expanded medical coverage for millions of combatants exposed to toxic burn pits during their service.” 

Why many were caught off guard: “41 Senate Republicans blocked the bill's passage, including 25 who had supported it a month ago.” 

Had the bill changed a lot? Not really: “The Senate passed the original legislation 84-14 in June. It underwent minor changes when it moved to the House, where it passed 342-88. When the bill returned to the Senate, the bill had not changed much but the view — and vote — of 25 senators did.”  

Soo, what happened?: “While it's unclear what prompted the flip, veterans believe the move was political.” The full story 

" This is total bulls--- … We had strong bipartisan support for this bill. And at the eleventh hour, Sen. Toomey decides that he wants to rewrite the bill, change the rules, and tank it.”  — Sen. Kirsten Gillibrand (D-N.Y.)

From Tom Porter, executive vice president of governmental affairs for the Iraq and Afghanistan Veterans of America: “How can fellow veterans turn their backs, and stab us in the back like that?” More reactions 

"I'm used to the hypocrisy…I'm used to the lies...I'm used to the cowardice...I'm used to all of it, but I am not used to the cruelty," Stewart told a gaggle of reporters after the vote. Watch Jon Stewart’s remarks outside the U.S. Capitol — warning, he uses some choice language 

“A group of veterans is staging a sit-in at the Capitol in response to Senate Republicans blocking a bill that would extend health care benefits to millions of veterans who were exposed to toxins during their service.” What we know 

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The Hill’s Niall Stanage writes, “No, really — What if Alexandria Ocasio-Cortez runs for president?”  

Via The Hill’s Amie Parnes 

The Department of Health and Human Services just purchased 66 million doses of the updated Moderna vaccine for a planned booster campaign in the fall. 

What do you mean ‘updated?’: The updated vaccine is designed to target the BA.4 and BA.5 subvariants of omicron. What we know 

Cases to date: 90.7 million

Death toll: 1,023,991 

Current hospitalizations: 37,695

Shots administered: 603 million

Fully vaccinated: 67.2 percent of Americans

CDC data here.

McDonald’s purpose is rooted in feeding and fostering communities. It takes ambitious targets and dedicated action to make a lasting impact on the planet and people. Learn how McDonald’s is progressing here.  

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Dark Palder, communications assistant for the second gentleman, tweeted a photo of Sen. Jon Ossoff (D-Ga.) showing second gentleman Doug Emhoff a photo of his baby during the Congressional Baseball Game yesterday. Photo 

If you didn’t watch the Congressional Baseball Game, here are a few of the highlights: And the post-game handshakes. Video from C-SPAN’s Howard Mortman 

The House is in. The Senate is out. President Biden and Vice President Harris are both in Washington, D.C. Harris has no events scheduled. 

• 9:45 a.m.: First House votes of the day. Today’s House agenda 
• 10:15 a.m.: Biden received his daily briefing. 
• 3 p.m. Monday: The Senate meets next. Monday’s Senate agenda 

All times Eastern. 

• 1:30 p.m.: White House press secretary Karine Jean-Pierre gives a press briefing. Livestream 
• Sunday morning: Sen. Joe Manchin (D-W.Va.) will appear on NBC’s “Meet the Press.”  

Today is National Chicken Wing Day and National Lasagna Day! Tomorrow is National Cheesecake Day and Sunday is National Avocado Day! 

Hershey is warning that it will not be able to meet the demand for Halloween candy this year.  

Why: Demand has been high during the pandemic — and ongoing supply chain issues. 

The full story from CNN Business’s Danielle Wiener-Bronner

From The Washington Post’s Jason Wilson, “From Dry January to Fake Cocktails, Inside the New Temperance Movement: Many Americans are reconsidering their relationship to alcohol. But if we drink less, is that automatically a good thing?” The Washington Post magazine read 

And to get your weekend off to a fun start, here’s a dog with a little side hustle. 

^ Make sure your sound is on. ;) 

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