joe manchin – Michmutters
Categories
US

Here’s what’s in the Inflation Reduction Act, the sweeping health and climate bill passed Sunday

The Senate passed Democrats’ Inflation Reduction Act on a party-line vote Sunday afternoon, delivering the long-awaited centerpiece to President Biden’s agenda.

Democrats rallied behind the $430 billion climate, health care and tax overhaul after Senate Majority Leader Charles Schumer (DN.Y.) reached a last-minute deal with Sen. Joe Manchin (DW.Va.), who had held up previous proposals.

The House is expected to approve the legislation on Friday and send it to Biden’s desk.

Here’s a summary of what’s in the Inflation Reduction Act:

ENVIRONMENT, ENERGY AND CLIMATE

Businesses would get incentives for deployment of lower-carbon and carbon-free energy sources.

  • Tax credits are extended for energy production and investment in technologies including wind, solar and geothermal energies. The investment tax credit also now applies to battery storage and biogas.
  • Tax credits would be created or extended for additional technologies and energy sources including nuclear energy, hydrogen energy coming from clean sources, biofuels and technology that captures carbon from fossil fuel power plants.
  • Many of the incentives also contain bonuses for companies based on how much they pay their workers and offer credits for manufacturing their steel, iron and other components in the US

Consumers and businesses get incentives to make cleaner energy choices.

  • Tax credits are extended for residential clean energy expenses including rooftop solar, heat pumps and small wind energy systems. Consumers can get credits for 30 percent of expenditures through 2032, and the credit phases down after that.
  • Tax credits of up to $7,500 are offered to consumers who buy electric vehicles — but this credit comes with stipulations that may make it difficult for vehicles to actually qualify.
  • A tax credit would be expanded for energy efficiency in commercial buildings.

Some fossil fuel production on public lands would be bolstered.

  • The future of solar and wind on public lands and wind in public waters would be tied to requirements to hold lease sales that open up new oil and gas production.
  • The bill reinstates the results of a recent offshore oil and gas lease sale that was struck down on environmental grounds. The Interior Department would be required to hold at least three more offshore oil and gas lease sales by next October.

New programs boost investment in climate.

  • A new program aims to reduce emissions of the planet-warming gas methane from oil and gas by both providing grants and loans to help companies reign in their emissions and levying fees on producers with excess methane emissions.
  • $27 billion would go to a green bank that would provide more incentives for clean energy technology.

Costs increase for fossil fuel production on public lands.

  • Minimum royalties increase for companies to pay the government for oil and gas they extract on public lands and waters. A royalty is added to the extraction of gas that is later burned off or released as waste instead of sold as fuel.

Communities that face high pollution burdens get relief.

  • $3 billion would go to environmental justice block grants — community-led programs addressing harms from climate change and pollutants, including $20 million for technical assistance at the community level, through fiscal 2026.
  • More than $3 billion is allocated to funds for air pollution monitoring in low-income communities. Nearly half of the funds — $117 million — would specifically go to communities in close proximity to industrial pollutants.
  • An excise tax on imported petroleum and crude oil products to fund the cleanup of industrial disaster sites increases from 9.7 cents to 16.4 cents per barrel. The reinstatement of the tax is projected to raise $11 billion.
  • The bill permanently extends and increases the Black Lung Disability Trust Fund, a tax on coal production to finance claims from workers with the condition. Black lung, caused by long-term exposure to and inhalation of coal dust, is believed to affect at least 10 percent of coal miners with at least 25 years’ experience, according to a 2018 study by the National Institute for Occupational Safety and Health.

— Rachel Frazin and Zack Budryk

HEALTH CARE

Medicare can negotiate lower prices.

The bill would allow Medicare to negotiate prices for some drugs for the first time, a policy Democrats have been trying to enact for years over the fierce objections of the pharmaceutical industry. The provisions save more than $200 billion over 10 years.

  • It would allow Medicare to negotiate lower prices for 10 high-cost drugs beginning in 2026, ramping up to 20 drugs by 2029. There is a steep penalty if a drug company doesn’t come to the table: a tax of up to 95 percent of the sales of the drug. There is also a ceiling that the negotiated price cannot rise above.
  • In a deal with moderates including Sen. Kyrsten Sinema (D-Ariz.), only older drugs are subject to negotiation after a period of nine years for most drugs and 13 years for more complex “biologic” drugs. That means the negotiations are more limited than many Democrats wanted.

Drug costs can be capped but largely only for Medicare.

The bill includes other measures to cap drug costs. The provisions still largely apply only to seniors on Medicare, not the millions of people who get health insurance through their jobs, in part because complex Senate rules limited how expansive the provisions would be.

  • If drug companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the government for the difference.
  • Democrats tried to apply this provision to the private market, but the parliamentarian ruled it violated the Senate rules used to bypass a GOP filibuster.
  • In one of the most tangible provisions for patients, the bill caps out-of-pocket drug costs at $2,000 a year for seniors on Medicare, starting in 2025.
  • The bill also caps patients’ insulin costs at $35 a month, but only for seniors on Medicare. Republicans voted against overruling the Senate parliamentarian to extend that protection to patients with private insurance.

People enrolled in ACA plans get an extension on premium assistance.

The measure also builds on the Affordable Care Act (ACA) by extending enhanced financial assistance to help people enrolled in ACA plans afford premiums for three years. The extra help would otherwise have expired at the end of this year, setting up a cliff. The provision expands eligibility to allow more middle-class people to receive premium help and increases the amount of help overall.

—Peter Sullivan

TAXES

Large corporations will pay for climate and health measures within the bill.

The bill introduces new taxes on corporations to pay for its climate and health care measures.

The centerpiece of its tax plan is a 15 percent minimum tax on the income that big corporations report to their shareholders, a tax known as the minimum book tax. Initial proposals put the amount of revenue raised by the book tax at $313 billion — more than 40 percent of the $740 billion raised by the legislation as a whole.

The tax applies to companies reporting $1 billion in annual earnings. It would impact only around 150 large firms, according to the Joint Committee on Taxation.

Sinema demanded some last-minute exclusions to the minimum tax that were favorable to the US manufacturing sector and private equity firms.

  • The tax will exempt companies taking advantage of accelerated depreciation, a popular deduction that helps pay for capital investments such as new equipment.
  • Small businesses that are subsidiaries of highly profitable private equity firms will also be exempted from the minimum tax.

The IRS gets a funding boost.

Another key measure allocates $80 billion to increase enforcement at the IRS. Democrats hope that, with more employees and better technology, the IRS can more closely examine wealthy individuals and ensure they aren’t dodging taxes. That extra revenue is expected to lower the deficit by $203 billion over the next decade.

Stock buybacks will get an additional tax.

The bill enacts a 1 percent excise tax on stock buybacks to replace the revenues lost by appeasing Sinema. Democrats expect the provision to raise $74 million over a decade.

Share repurchases by S&P 500 companies have soared in recent years and are on track to surpass $1 trillion this year. Companies buy back their stock to reward shareholders and increase their stock price by artificially limiting supply.

  • The tax will impact the nation’s largest companies that rely on multibillion-dollar buybacks to raise their stock price, including Apple, Nike and Exxon Mobil.
  • Democrats have criticized the practice, arguing that companies should invest in workers and innovation instead of repurchasing stock.

To further recover revenue lost to the private equity sector, the bill also extends a set of limitations on losses that businesses can deduct from their taxes. The limits prevent wealthy individuals from significantly bringing down or even wiping out their income tax liability. Sen. Mark Warner (D-Va.) said that extending the caps would raise $52 billion.

— Tobias Burns and Karl Evers-Hillstrom

.

Categories
US

Here’s what’s in the Inflation Reduction Act, the sweeping health and climate bill passed Sunday

The Senate passed Democrats’ Inflation Reduction Act on a party-line vote Sunday afternoon, delivering the long-awaited centerpiece to President Biden’s agenda.

Democrats rallied behind the $430 billion climate, health care and tax overhaul after Senate Majority Leader Charles Schumer (DN.Y.) reached a last-minute deal with Sen. Joe Manchin (DW.Va.), who had held up previous proposals.

The House is expected to approve the legislation on Friday and send it to Biden’s desk.

Here’s a summary of what’s in the Inflation Reduction Act:

ENVIRONMENT, ENERGY AND CLIMATE

Businesses would get incentives for deployment of lower-carbon and carbon-free energy sources.

  • Tax credits are extended for energy production and investment in technologies including wind, solar and geothermal energies. The investment tax credit also now applies to battery storage and biogas.
  • Tax credits would be created or extended for additional technologies and energy sources including nuclear energy, hydrogen energy coming from clean sources, biofuels and technology that captures carbon from fossil fuel power plants.
  • Many of the incentives also contain bonuses for companies based on how much they pay their workers and offer credits for manufacturing their steel, iron and other components in the US

Consumers and businesses get incentives to make cleaner energy choices.

  • Tax credits are extended for residential clean energy expenses including rooftop solar, heat pumps and small wind energy systems. Consumers can get credits for 30 percent of expenditures through 2032, and the credit phases down after that.
  • Tax credits of up to $7,500 are offered to consumers who buy electric vehicles — but this credit comes with stipulations that may make it difficult for vehicles to actually qualify.
  • A tax credit would be expanded for energy efficiency in commercial buildings.

Some fossil fuel production on public lands would be bolstered.

  • The future of solar and wind on public lands and wind in public waters would be tied to requirements to hold lease sales that open up new oil and gas production.
  • The bill reinstates the results of a recent offshore oil and gas lease sale that was struck down on environmental grounds. The Interior Department would be required to hold at least three more offshore oil and gas lease sales by next October.

New programs boost investment in climate.

  • A new program aims to reduce emissions of the planet-warming gas methane from oil and gas by both providing grants and loans to help companies reign in their emissions and levying fees on producers with excess methane emissions.
  • $27 billion would go to a green bank that would provide more incentives for clean energy technology.

Costs increase for fossil fuel production on public lands.

  • Minimum royalties increase for companies to pay the government for oil and gas they extract on public lands and waters. A royalty is added to the extraction of gas that is later burned off or released as waste instead of sold as fuel.

Communities that face high pollution burdens get relief.

  • $3 billion would go to environmental justice block grants — community-led programs addressing harms from climate change and pollutants, including $20 million for technical assistance at the community level, through fiscal 2026.
  • More than $3 billion is allocated to funds for air pollution monitoring in low-income communities. Nearly half of the funds — $117 million — would specifically go to communities in close proximity to industrial pollutants.
  • An excise tax on imported petroleum and crude oil products to fund the cleanup of industrial disaster sites increases from 9.7 cents to 16.4 cents per barrel. The reinstatement of the tax is projected to raise $11 billion.
  • The bill permanently extends and increases the Black Lung Disability Trust Fund, a tax on coal production to finance claims from workers with the condition. Black lung, caused by long-term exposure to and inhalation of coal dust, is believed to affect at least 10 percent of coal miners with at least 25 years’ experience, according to a 2018 study by the National Institute for Occupational Safety and Health.

— Rachel Frazin and Zack Budryk

HEALTH CARE

Medicare can negotiate lower prices.

The bill would allow Medicare to negotiate prices for some drugs for the first time, a policy Democrats have been trying to enact for years over the fierce objections of the pharmaceutical industry. The provisions save more than $200 billion over 10 years.

  • It would allow Medicare to negotiate lower prices for 10 high-cost drugs beginning in 2026, ramping up to 20 drugs by 2029. There is a steep penalty if a drug company doesn’t come to the table: a tax of up to 95 percent of the sales of the drug. There is also a ceiling that the negotiated price cannot rise above.
  • In a deal with moderates including Sen. Kyrsten Sinema (D-Ariz.), only older drugs are subject to negotiation after a period of nine years for most drugs and 13 years for more complex “biologic” drugs. That means the negotiations are more limited than many Democrats wanted.

Drug costs can be capped but largely only for Medicare.

The bill includes other measures to cap drug costs. The provisions still largely apply only to seniors on Medicare, not the millions of people who get health insurance through their jobs, in part because complex Senate rules limited how expansive the provisions would be.

  • If drug companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the government for the difference.
  • Democrats tried to apply this provision to the private market, but the parliamentarian ruled it violated the Senate rules used to bypass a GOP filibuster.
  • In one of the most tangible provisions for patients, the bill caps out-of-pocket drug costs at $2,000 a year for seniors on Medicare, starting in 2025.
  • The bill also caps patients’ insulin costs at $35 a month, but only for seniors on Medicare. Republicans voted against overruling the Senate parliamentarian to extend that protection to patients with private insurance.

People enrolled in ACA plans get an extension on premium assistance.

The measure also builds on the Affordable Care Act (ACA) by extending enhanced financial assistance to help people enrolled in ACA plans afford premiums for three years. The extra help would otherwise have expired at the end of this year, setting up a cliff. The provision expands eligibility to allow more middle-class people to receive premium help and increases the amount of help overall.

—Peter Sullivan

TAXES

Large corporations will pay for climate and health measures within the bill.

The bill introduces new taxes on corporations to pay for its climate and health care measures.

The centerpiece of its tax plan is a 15 percent minimum tax on the income that big corporations report to their shareholders, a tax known as the minimum book tax. Initial proposals put the amount of revenue raised by the book tax at $313 billion — more than 40 percent of the $740 billion raised by the legislation as a whole.

The tax applies to companies reporting $1 billion in annual earnings. It would impact only around 150 large firms, according to the Joint Committee on Taxation.

Sinema demanded some last-minute exclusions to the minimum tax that were favorable to the US manufacturing sector and private equity firms.

  • The tax will exempt companies taking advantage of accelerated depreciation, a popular deduction that helps pay for capital investments such as new equipment.
  • Small businesses that are subsidiaries of highly profitable private equity firms will also be exempted from the minimum tax.

The IRS gets a funding boost.

Another key measure allocates $80 billion to increase enforcement at the IRS. Democrats hope that, with more employees and better technology, the IRS can more closely examine wealthy individuals and ensure they aren’t dodging taxes. That extra revenue is expected to lower the deficit by $203 billion over the next decade.

Stock buybacks will get an additional tax.

The bill enacts a 1 percent excise tax on stock buybacks to replace the revenues lost by appeasing Sinema. Democrats expect the provision to raise $74 million over a decade.

Share repurchases by S&P 500 companies have soared in recent years and are on track to surpass $1 trillion this year. Companies buy back their stock to reward shareholders and increase their stock price by artificially limiting supply.

  • The tax will impact the nation’s largest companies that rely on multibillion-dollar buybacks to raise their stock price, including Apple, Nike and Exxon Mobil.
  • Democrats have criticized the practice, arguing that companies should invest in workers and innovation instead of repurchasing stock.

To further recover revenue lost to the private equity sector, the bill also extends a set of limitations on losses that businesses can deduct from their taxes. The limits prevent wealthy individuals from significantly bringing down or even wiping out their income tax liability. Sen. Mark Warner (D-Va.) said that extending the caps would raise $52 billion.

— Tobias Burns and Karl Evers-Hillstrom

.

Categories
US

These seven GOP senators voted to keep $35 insulin cap in reconciliation bill

Seven Republican senators voted with all 50 Democrats to maintain a $35 monthly cap on the price of insulin in the Democrats’ $700 billion climate, health and tax reconciliation bill.

The measure targeting people not covered by Medicare was ultimately blocked from being included in the Inflation Reduction Act when it fell three votes short of the 60 required to override a ruling from the parliament Senatearian.

The seven Republicans who voted with Democrats were Sens. Bill Cassidy (La.), Susan Collins (Maine), Josh Hawley (Mo.), Cindy Hyde-Smith (Miss.), John Kennedy (La.), Lisa Murkowski (Alaska ) and Dan Sullivan (Alaska).

Many of the seven Republicans who supported the measure have been vocal in their criticism of the reconciliation package broadly — and all of them voted against the bill as a whole.

Democrats won a partial victory when the parliamentarian allowed the $35 insulin cap to apply to Medicare beneficiaries, which could influence prices in the private market.

The Inflation Reduction Act passed the Senate Sunday 51-50, with Vice President Kamala Harris casting the tiebreaker vote.

“While I don’t oppose everything in it, there is no doubt in my mind, based on both substance & process, the Senate should not have passed it,” Murkowski wrote on Twitter after the passage.

Kennedy had proposed his own amendment related to insulin costs, but ended up siding with the Democrats on theirs — though he called his colleagues across the aisle “a special kind of stupid” for the tax increases in the so-called Inflation Reduction Act.

“Democrats’ tax and spending spree will do nothing to decrease inflation, but will raise the tax bill falling on everyday Americans,” Cassidy wrote on Twitter Sunday. “I proudly voted no.”

Hyde-Smith released a statement calling the legislation “a long, forced march toward more economic hardship and more government in our lives.”

The reconciliation bill came out of an agreement between Senate Majority Leader Charles Schumer (DN.Y.) and Sen. Joe Manchin (DW.Va.), and is aimed at investing in domestic energy and lowering prescription drug costs by closing tax loopholes on wealthy individuals and corporations.

The Hill has reached out to the offices of GOP senators who supported the insulin cap for comment.

.

Categories
US

Senate Dems skipping COVID testing to push spending bill vote: report

That’s sick!

Senate Democrats are embracing a “Don’t Test, Don’t Tell” policy this weekend as they try to ram a $764 billion spending bill through the 50-50 chamber — knowing that even one COVID-19 positive could blow up their plans.

Senate Majority Leader Chuck Schumer (D-NY) has set a Saturday test vote for the so-called Inflation Reduction Act, which needs all 50 Democrats on board so Vice President Kamala Harris can cast a tiebreaking vote in its favor.

“They’re not going to delay it if a member has gotten COVID,” a senior Senate aide told Puck News. “Counterparts are saying they’re not going to test anymore. It’s not an official mandate but we all know we’re not letting COVID get in the way. The deal is happening. Less testing, just wear masks and get it done.”

Another source told the outlet that even if a senator did catch the virus, “you can bring your ventilator and still vote.”

Unlike the House, the Senate does not allow proxy voting, meaning members who cannot make it to the floor due to illness are out of luck.

Senate Majority Leader Chuck Schumer set a test vote on Saturday for the Inflation Reduction Act.
Senate Majority Leader Chuck Schumer set a test vote on Saturday for the Inflation Reduction Act.
AP Photo/Mariam Zuhaib

Earlier in the week – before moderate Sen. Kyrsten Sinema (D-Ariz.) got on board with Schumer and Sen. Joe Manchin’s (D-WV) climate and energy plan – the Democratic leader insisted his party was “going to stay healthy” ahead of a potential vote.

“We’re not talking about a plan B,” Schumer said at the time.

Concerns about having all 50 Democrats and Democrat-voting Independents present on the Senate floor have grown in recent weeks, as several senators have tested positive for COVID or been absent for other health reasons.

In late June, Senate President Pro Tempore Patrick Leahy (D-Vt.) fell in his Virginia home and broke his hip – keeping him out of Washington until this week. He ultimately underwent two surgeries.

Sen.  Kyrsten Sinema agreed to a compromise for the spending plan — likely giving Democrats 50 votes for the bill in the Senate.
Sen. Kyrsten Sinema agreed to a compromise for the spending plan — likely giving Democrats 50 votes for the bill in the Senate.
AP Photo/J. Scott ApplewhiteFile

Just a week before, Republican Sen. Kevin Cramer of North Dakota seriously injured his hand during a yard work incident.

In early July, Schumer and Sen. Richard Blumenthal (D-Conn.) tested positive for COVID-19, both reporting mild symptoms. Days later, Manchin and Republican Sen. Lisa Murkowski of Alaska also reported positive tests.

Ironically, Schumer accused Senate Republicans of not taking COVID-19 seriously in the fall of 2020, when a spate of positive tests threatened to derail the confirmation of Supreme Court Justice Amy Coney Barrett.

“Every Senator and relevant staff must have negative tests on two consecutive days and have completed the appropriate quarantining period, and there should be mandatory testing every day of the [confirmation] hearing,” Schumer said in a statement on Oct. 5 of that year. “Testing must be administered by an independent entity, such as the Attending Physician of the United States Congress. Failure to implement a thorough testing approach would be intentionally reckless, and could reasonably lead some wonder if Chairman [Lindsey] Graham and Leader [Mitch] McConnell may not want to know the results.”

If the bill clears the planned Saturday test vote, a series of debates and votes on Republican amendments is expected to follow before a potential vote on final passage sometime Sunday. The legislation would then go to the House.

Sinema agreed to support the measure on Thursday after a provision taxing profits earned by hedge fund, venture capital and private equity executives known as carried interest was removed. In exchange, a 1% tax on corporate stock buybacks was added.

Despite its name, several economic experts — and even the White House — have suggested the Inflation Reduction Act would have little impact on the historic price spikes being felt across the country.

.

Categories
US

Sanders rips Inflation Reduction Act, says it will have ‘minimal impact on inflation’

Sen. Bernie Sanders (I-Vt.) ripped the Inflation Reduction Act Saturday for doing little to fight inflation and not enough to help Americans struggling to afford health care, child care and housing.

“According to the [Congressional Budget Office] and other economic organizations that have studied this bill, it will have a minimal impact on inflation,” Sanders declared on the Senate floor to open debate on the 755-page bill, which will raise taxes on corporations, fight climate change and reduce some prescription drug costs.

The line of criticism echoed what Senate Republicans have said for days in pointing to a Penn Wharton analysis concluding the bill will have a negligible impact on inflation.

Sanders argued the Democratic bill falls far short of what is needed when Americans are growing increasingly disillusioned with government and a tiny fraction of wealthy individuals and families own a hugely disproportionate share of the nation’s wealth.

He pointed to the lower standard of living many younger people know and expect compared to their parents’ generation, the daunting cost of housing for people starting out in the work world and the stagnation of wages.

“This legislation does not address any of their needs,” Sanders said. “This legislation does not address the reality that we have more income and wealth inequality today than at any time in the last hundred years.”

He complained the bill doesn’t address the fact that CEOs of major corporations make 350 times as much as their workers, or do more to improve a health care system.

“This bill does nothing to address the systemic dysfunctionality of the American health care system,” he charged.

He also noted the bill “as currently written does nothing” to address the nation’s rate of childhood poverty, a pointed reference to Sen. Joe Manchin’s (DW.Va.) opposition to including an extension of the expanded child tax credit — which expired at the end of last year — in the bill.

He said the bill also fails to address the nation’s affordable housing crisis.

“Yup, you guessed it. This bill does nothing to address the major housing crisis that we face or build one unit of safe and affordable housing. Just another issue that we push aside,” he grumbled.

But Sanders’s biggest complaint is legislation doesn’t give Medicare enough authority to negotiate lower prescription drug prices.

He said “the good news” is the bill would allow Medicare to negotiate prescription drug prices with the pharmaceutical industry but the “bad news” is the provision does not go into effect for four years, at which time only 10 drugs will be covered.

“This provision will have no impact on the prices for Americans not on Medicare. Those prices will continue to rise uncontrollably,” he said.

Sanders announced he will offer an amendment that would require Medicare to pay no more for prescription drugs than the Department of Veterans Affairs.

He said that proposal would save Medicare $900 billion over the next decade.

In a floor speech Wednesday, he said he would use that money to lower the Medicare eligibility age to 60 and extend Medicare benefits to cover vision, hearing and dental care.

Sanders told reporters earlier Saturday that he plans to offer three other amendments to the bill related to prescription drugs and Medicare.

One amendment would expand Medicare to provide dental, vision and hearing benefits, another would provide $30 billion to establish a Civilian Conservation Corps to combat climate change, and a fourth would expand the $300 per month Child Tax Credit for the next five years.

His arguments, however, are largely falling flat with Democratic senators who say they won’t vote for any amendments that could jeopardize the support of Manchin and fellow centrist Sen. Kyrsten Sinema (D-Ariz.).

A Democratic senator said Schumer has urged colleagues not to offer amendments to the bill that could upset the carefully crafted compromise he reached with Manchin and Sinema after weeks of negotiation.

One Democratic aid said Sanders’s insistence on voting on his amendments would delay final passage of the bill.

But Schumer has limited leverage over Sanders, who as chairman of the Budget Committee, has the official role of managing the floor debate on the bill, which is being moved under special budgetary reconciliation rules to circumvent a GOP filibuster.

Senate Finance Committee Chairman Ron Wyden (D-Ore.), who played a major role in crafting the prescription drug compromise with Sinema, pushed back against Sanders’s criticism.

He hailed it as a major victory because it would set an important precedent of empowering the government to negotiate with the pharmaceutical industry.

“I think there is a reason big PhRMA is fighting this so hard. They know once you put negotiation into law, embedded into law, there will be no turning back. That’s what this all about,” he said, he referring to the pharmaceutical industry’s trade association. “This is a seismic shift between government and this lobby.”

.

Categories
US

Sanders rips Inflation Reduction Act, says it will have ‘minimal impact on inflation’

Sen. Bernie Sanders (I-Vt.) ripped the Inflation Reduction Act Saturday for doing little to fight inflation and not enough to help Americans struggling to afford health care, child care and housing.

“According to the [Congressional Budget Office] and other economic organizations that have studied this bill, it will have a minimal impact on inflation,” Sanders declared on the Senate floor to open debate on the 755-page bill, which will raise taxes on corporations, fight climate change and reduce some prescription drug costs.

The line of criticism echoed what Senate Republicans have said for days in pointing to a Penn Wharton analysis concluding the bill will have a negligible impact on inflation.

Sanders argued the Democratic bill falls far short of what is needed when Americans are growing increasingly disillusioned with government and a tiny fraction of wealthy individuals and families own a hugely disproportionate share of the nation’s wealth.

He pointed to the lower standard of living many younger people know and expect compared to their parents’ generation, the daunting cost of housing for people starting out in the work world and the stagnation of wages.

“This legislation does not address any of their needs,” Sanders said. “This legislation does not address the reality that we have more income and wealth inequality today than at any time in the last hundred years.”

He complained the bill doesn’t address the fact that CEOs of major corporations make 350 times as much as their workers, or do more to improve a health care system.

“This bill does nothing to address the systemic dysfunctionality of the American health care system,” he charged.

He also noted the bill “as currently written does nothing” to address the nation’s rate of childhood poverty, a pointed reference to Sen. Joe Manchin’s (DW.Va.) opposition to including an extension of the expanded child tax credit — which expired at the end of last year — in the bill.

He said the bill also fails to address the nation’s affordable housing crisis.

“Yup, you guessed it. This bill does nothing to address the major housing crisis that we face or build one unit of safe and affordable housing. Just another issue that we push aside,” he grumbled.

But Sanders’s biggest complaint is legislation doesn’t give Medicare enough authority to negotiate lower prescription drug prices.

He said “the good news” is the bill would allow Medicare to negotiate prescription drug prices with the pharmaceutical industry but the “bad news” is the provision does not go into effect for four years, at which time only 10 drugs will be covered.

“This provision will have no impact on the prices for Americans not on Medicare. Those prices will continue to rise uncontrollably,” he said.

Sanders announced he will offer an amendment that would require Medicare to pay no more for prescription drugs than the Department of Veterans Affairs.

He said that proposal would save Medicare $900 billion over the next decade.

In a floor speech Wednesday, he said he would use that money to lower the Medicare eligibility age to 60 and extend Medicare benefits to cover vision, hearing and dental care.

Sanders told reporters earlier Saturday that he plans to offer three other amendments to the bill related to prescription drugs and Medicare.

One amendment would expand Medicare to provide dental, vision and hearing benefits, another would provide $30 billion to establish a Civilian Conservation Corps to combat climate change, and a fourth would expand the $300 per month Child Tax Credit for the next five years.

His arguments, however, are largely falling flat with Democratic senators who say they won’t vote for any amendments that could jeopardize the support of Manchin and fellow centrist Sen. Kyrsten Sinema (D-Ariz.).

A Democratic senator said Schumer has urged colleagues not to offer amendments to the bill that could upset the carefully crafted compromise he reached with Manchin and Sinema after weeks of negotiation.

One Democratic aid said Sanders’s insistence on voting on his amendments would delay final passage of the bill.

But Schumer has limited leverage over Sanders, who as chairman of the Budget Committee, has the official role of managing the floor debate on the bill, which is being moved under special budgetary reconciliation rules to circumvent a GOP filibuster.

Senate Finance Committee Chairman Ron Wyden (D-Ore.), who played a major role in crafting the prescription drug compromise with Sinema, pushed back against Sanders’s criticism.

He hailed it as a major victory because it would set an important precedent of empowering the government to negotiate with the pharmaceutical industry.

“I think there is a reason big PhRMA is fighting this so hard. They know once you put negotiation into law, embedded into law, there will be no turning back. That’s what this all about,” he said, he referring to the pharmaceutical industry’s trade association. “This is a seismic shift between government and this lobby.”

.

Categories
US

Sinema gives her nod, and influence, to Democrats’ big bill

WASHINGTON (AP) — Sen. Joe Manchin sealed the deal reviving President Joe Biden’s big economic, health care and climate bill. But it was another Democratic senator, Kyrsten Sinema of Arizonawho intently, quietly and deliberately shaped the final product.

Democrats pushed ahead Friday on an estimated $730 billion package that in many ways reflects Sinema’s priorities and handiwork more than the other political figures who have played a key role in delivering on Biden’s signature domestic policy agenda.

It was Sinema early on who rejected Biden’s plan to raise the corporate tax rate from 21% to 28%, as she broke with the party’s primary goal of reversing the Trump-era tax break Republicans gave to corporate America.

Sinema also scaled back her party’s long-running plan to allow Medicare to negotiate lower drug prices with the pharmaceutical companies as a way to reduce overall costs to the government and consumers. She limited which drugs can be negotiated.

Her insistence on climate change provisions forced the coal-state Manchin to stay at the table to accept some $369 billion in renewable energy investments and tax breaks. She also is tucking in more money to fight Western droughts.

And it was Sinema who in one final stroke gave her blessing to the deal by extracting an ultimate demand — she forced Democrats to drop plans to close a tax loophole that benefits wealthy hedge fund managers and high-income earners, long a party priority. Instead, the final bill will keep the tax rate at 20% instead of hiking it to the typical 37%.

“Kyrsten Sinema’s proven herself to be a very effective legislator,” said Sen. Mark Warner, D-Va., who has negotiated extensively with his colleague over the past year, including on the tax loophole.

In a 50-50 Senate where every vote matters, the often inscrutable and politically undefinable Sinema puts hers to use in powerful ways. Her negotiating at the highest levels of power — she appears to have equal access to Biden, Senate Majority Leader Chuck Schumer and even Senate Republican leader Mitch McConnell — has infuriated some, wowed others and left no doubt she is a powerful new political figure.

While other lawmakers bristle at the influence a single senator can wield in Congress, where each member represents thousands if not millions of voters, Sinema’s nod of approval late Thursday was the last hurdle Democrats needed to push the Inflation Reduction Act forward. A final round of grueling votes on the package is expected to begin this weekend.

“We had no choice,” Schumer told reporters Friday at the Capitol.

Getting what you want in Congress does not come without political costs, and Sinema is amassing a balance due.

Progressives are outraged at their behavior, which they view as beyond the norms of sausage-making during the legislative process and verging on an unsettling restacking of party priorities to a more centrist, if not conservative, lane.

Progressive Rep. Ruben Gallego is openly musing about challenging Sinema in the 2024 primary in Arizona, and an independent expenditure group, Change for Arizona 2024, says it will support grassroots organizations committed to defeating her in a Democratic primary.

“The new reconciliation bill will lower the cost of prescription drugs,” Gallego wrote on Twitter last weekend. “@SenatorSinema is holding it up to try to protect ultra rich hedge fund managers so they can pay a lower tax.”

In fact, on the left and the right, commentators lambasted her final act—saving the tax breaks for the wealthy. Some pointed to past legislative luminaries—the late Sen. Robert Byrd, for example, used his clout to leave his name on roads, buildings and civic institutions across the West Virginia hillsides. They scoff at Sinema establishing her legacy of her in such a way.

“Astonishing,” wrote conservative Hugh Hewitt on Twitter. “@SenatorSinema could have demanded anything she wanted — anything that spent money or changed taxes — and with that leverage for Arizona she choose … to protect the carry interest exemption for investors. …Not the border. Not the country. A tax break. wow.”

Democratic former Clinton-era Labor Secretary Robert Reich wrote, “The ‘carried interest’ loophole for billionaire hedge-fund and private-equity partners is now out of the Inflation Reduction Act, courtesy of Kyrsten Sinema.

“She’s up in 2024. Primary her and get her out of the Senate.”

But Sinema has never cared much about what others say about her, from the time she set foot in the Senate, breaking the rules with her whimsical fashion choices and her willingness to reach across the aisle to Republicans — literally joining them at times in the private Senate GOP cloakroom.

The Arizona senator seeks to emulate the maverick career of John McCain, drawing on his farewell address for her maiden Senate speech, and trying to adopt his renegade style alongside her own — a comparison that draws some eyerolls for its reach and scope.

Still, in her short time in the Senate, Sinema has come herself to be a serious study who understands intricacies of legislation and a hard-driving dealer who does not flinch. She has been instrumental in landmark legislation, including the bipartisan infrastructure bill Biden signed into law last summer.

“There’s not been a bipartisan group that she’s not been a part of,” Warner said.

In the end, the final package is slimmer than Biden first envisioned with his lofty Build Back Better initiative, but still a monumental undertaking and a bookend to a surprisingly productive if messy legislative session.

The bill would make health care gains for many Americans, capping pharmacy costs for seniors at $2,000 out of pocket and providing subsidies to help millions of people who buy health insurance on the private market. It includes what the Biden administration calls the largest investment in climate change ever, with money for renewable energy and consumer rebates for new and used electric cars. It would mostly be paid for by higher corporate taxes, with some $300 billion going to deficit reductions.

On the climate provisions, a priority for Democrats, Sinema may have played a role in keeping the sweeping provisions in the bill, when Manchin was less inclined to do so.

Environmental leaders, who have been involved in talks on the bill since last year, said Sinema has helped shape the bill all along. She was especially helpful last year when she made it clear she supports the climate and energy provisions, and her commitment to climate issues has remained steadfast, environmentalists said.

She tacked on her own priority, money to help Western states dealing with droughts, in the final push.

Jamal Raad, executive director of Evergreen Action, an environmental group that has pushed for the climate bill, said: “Senator Sinema needed money for drought relief to help her constituents stave off the worst effects of climate change. If that’s what was needed to gain her support from her, then good on her.

At home in Arizona, business allies that have been crucial to Sinema’s efforts to build an independent image have cheered on her willingness to resist party pressure over the tax increases.

The Arizona Chamber of Commerce and Industry and the National Association of Manufacturers ran ads against the deal, though they didn’t target Sinema by name, and bent her ear in a phone call this week.

__

Associated Press writers Matthew Daly in Washington and JJ Cooper in Phoenix contributed to this article.

.

Categories
US

Democrats’ big package: What remains in and what’s out?

WASHINGTON (AP) — It’s nowhere near the $4 trillion proposal President Joe Biden first launched to rebuild America’s public infrastructure and family support systems but the compromise package of inflation-fighting health care, climate change and deficit reduction strategies appears on track toward Senate votes this weekend.

The estimated $740 billion proposal, struck by two top negotiators, Senate Majority Leader Chuck Schumer and holdout Sen. Joe Manchin, the conservative West Virginia Democrat, includes some hard-fought party priorities. But the final touches came this week from Sen. Kyrsten Sinema, D-Ariz., who put her handiwork on the latest revisions.

What’s in, and out, of the Democrats’ “Inflation Reduction Act of 2022” as it stands now:

LOWER PRESCRIPTION DRUG COSTS

Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.

Those new revenues would be put back into lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.

The money would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document.

HELP PAY FOR HEALTH INSURANCE

The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.

Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for people who are purchasing their own health care policies.

‘SINGLE BIGGEST INVESTMENT IN CLIMATE CHANGE IN US HISTORY’

The bill would invest nearly $374 billion over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles.

It’s broken down to include $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels. The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.

The bill would impose a new fee on excess methane emissions from oil and gas drilling while giving fossil fuel companies access to more leases on federal lands and waters.

A late addition pushed by Sinema and other Democrats in Arizona, Nevada and Colorado would designate $4 billion to combat a mega-drought in the West, including conservation efforts in the Colorado River Basin, which nearly 40 million Americans rely on for drinking water.

For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. There are tax breaks for buying electric vehicles, including a $4,000 tax credit for purchase of used electric vehicles and $7,500 for new ones.

In all, Democrats believe the strategy could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in US history, by far.”

HOW TO PAY FOR ALL OF THIS?

The biggest revenue-raiser in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.

It’s a way to clamp down on some 200 US companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.

The new corporate minimum tax would kick in after the 2022 tax year and raise some $258 billion over the decade.

The revenue would have been $313 billion, but Sinema insisted on one change to the 15% corporate minimum, allowing a depreciation deduction used by manufacturing industries. That shaves about $55 billion off the total revenue.

Money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue — a net gain of $124 billion over the decade.

The bill sticks with Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year.

The lower drug prices for seniors are paid for with savings from Medicare’s negotiations with the drug companies.

WHAT’S CHANGED IN RECENT DAYS?

To win over Sinema, Democrats dropped plans to close a tax loophole long enjoyed by wealthier Americans — the so-called “carried interest,” which under current law taxes wealthy hedge fund managers and others at a 20% rate.

The left has for years sought to increase the carried interest tax rate, hiked to 37% in the original bill, more in line with upper-income earners. Sinema wouldn’t allow it.

Keeping the tax break for the wealthy deprives the party of $14 billion in revenue they were counting on to help pay for the package.

In its place, Democrats, with Sinema’s nod, will impose a 1% excise tax on stock buybacks, raising some $74 billion over the decade.

EXTRA MONEY TO PAY DOWN DEFICITS

With some $740 billion in new revenue and around $433 billion in new investments, the bill promises to put the difference toward deficit reduction.

Federal deficits spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation’s economy churned through shutdowns, closed offices and other massive changes.

The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Officewhich put out a new report this week on long-term projections.

WHAT’S LEFT BEHIND

This latest package after 18 months of start-stop negotiations leaves behind many of Biden’s more ambitious goals.

While Congress did pass a $1 trillion bipartisan infrastructure bill for highways, broadband and other investments that Biden signed into law last year, the president’s and the party’s other key priorities have slipped away.

Among them is a continuation of a $300 monthly child tax credit that was sending money directly to families during the pandemic and is believed to have widely reduced child poverty.

Also gone, for now, are plans for free pre-kindergarten and community college, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs.

___

Associated Press writer Matthew Daly contributed to this report.

.

Categories
US

Sinema made Schumer cut carried interest piece of reconciliation bill

US Senate Majority Leader Chuck Schumer (D-NY) holds his weekly news conference after the Democratic caucus party luncheon at the US Capitol in Washington, August 2, 2022.

Jonathan Ernst | Reuters

Senate Majority Leader Chuck Schumer said Friday that Democrats had “no choice” but to drop a key tax provision from their major spending bill in order to gain Sen. Kyrsten Sinema’s support.

Sinema, a centrist Democrat from Arizona, had held her support of the Inflation Reduction Act, the sweeping bill that includes much of the Biden administration’s tax, climate and health care agenda. Senate Democrats need her support from her to pass the bill through the Senate on a party-line vote using the budget reconciliation process, which requires a simple majority vote. The chamber is split 50-50 between Democrats and Republicans.

Sinema announced Thursday night that she would indeed back the legislation, following an agreement “to remove the carried interest tax provision.”

She was referring to the bill’s inclusion of language that would narrow the so-called carried interest loophole, a feature of the tax code that both Democrats and Republicans — including former President Donald Trump — have tried to close.

Carried interest refers to compensation that hedge fund managers and private equity executives receive from their firms’ investment gains. After three years, that money is taxed at a long-term capital gains rate of 20%, instead of a short-term capital gains rate, which tops out at 37%.

The Inflation Reduction Act aimed to narrow that loophole by extending the short-term tax rate to five years. The bill’s provision was projected to raise $14 billion over a 10-year period.

“I pushed for it to be in this bill,” Schumer, DN.Y., said of the proposal to narrow the loophole.

But “Senator Sinema said she would not vote for the bill, not even move to proceed unless we took it out,” he said. “So we had no choice.”

Sinema stressed Thursday night that after the reconciliation bill passes, “I look forward to working with [Sen. Mark Warner, D-Va.] to enact carried interest tax reforms, protecting investments in America’s economy and encouraging continued growth while closing the most egregious loopholes that some abuse to avoid paying taxes.”

A spokeswoman for Sinema defended the senator’s record when asked by CNBC on Friday about Schumer’s remarks and her stance on carried interest.

Sinema “has been clear and consistent for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness,” the spokeswoman said. “At a time of record inflation, rising interest rates and slowing economic growth, disincentivizing investments in Arizona businesses would hurt Arizona’s economy and ability to create jobs.”

Schumer said that another tax piece from the Inflation Reduction Act was taken out in order to secure the deal with Sinema. This one came from a proposal to impose a 15% corporate alternative minimum tax aimed at rich corporations that are accused of skirting their tax obligations. It was projected to raise $313 billion — more than 40% of the bill’s revenue.

While that part of the bill was altered, “$258 billion of that remains, so the vast majority remains,” Schumer said.

And while the carried interest provision was nixed, Schumer said Democrats added in an excise tax on stock buybacks that will bring in $74 billion. He said that multiple legislators are “excited” about that update.

“I hate stock buybacks. I think they’re one of the most self-serving things corporate America does,” Schumer said. “I’d like to abolish them.”

.

Categories
US

Sinema made Schumer cut carried interest loophole from reconciliation bill

US Senate Majority Leader Chuck Schumer (D-NY) holds his weekly news conference after the Democratic caucus party luncheon at the US Capitol in Washington, August 2, 2022.

Jonathan Ernst | Reuters

Senate Majority Leader Chuck Schumer said Friday that Democrats had “no choice” but to drop a key tax provision from their major spending bill in order to gain Sen. Kyrsten Sinema’s support.

Sinema, a centrist Democrat from Arizona, had held her support of the Inflation Reduction Act, the sweeping bill that includes much of the Biden administration’s tax, climate and health care agenda. Senate Democrats need her support from her to pass the bill through the Senate on a party-line vote using the budget reconciliation process — which requires a simple majority vote in the Senate split 50-50 by party.

Sinema announced Thursday night that she would indeed back the legislation, following an agreement “to remove the carried interest tax provision.”

She was referring to the bill’s inclusion of language that would narrow the so-called carried interest loophole, a feature of the tax code that both Republicans and Democrats — including former President Donald Trump — have tried to close.

Carried interest refers to compensation that hedge fund managers and private equity executives receive from their firms’ investment gains. After three years, that money is taxed at a long-term capital gains rate of 20%, instead of a short-term capital gains rate, which tops out at 37%.

The Inflation Reduction Act aimed to narrow that loophole by extending the short-term tax rate to five years. The bill’s provision was projected to raise $14 billion over a 10-year period.

“I pushed for it to be in this bill,” Schumer, DN.Y., said of the proposal to narrow the loophole.

But “Senator Sinema said she would not vote for the bill, not even move to proceed unless we took it out,” he said. “So we had no choice.”

Sinema stressed Thursday night that after the reconciliation bill passes, “I look forward to working with [Sen. Mark Warner, D-Va.] to enact carried interest tax reforms, protecting investments in America’s economy and encouraging continued growth while closing the most egregious loopholes that some abuse to avoid paying taxes.”

A spokeswoman for Sinema defended the senator’s record when asked by CNBC on Friday about Schumer’s remarks and her stance on carried interest.

Sinema “has been clear and consistent for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness,” the spokeswoman said. “At a time of record inflation, rising interest rates, and slowing economic growth, disincentivizing investments in Arizona businesses would hurt Arizona’s economy and ability to create jobs.”

Schumer said that another tax piece from the Inflation Reduction Act was taken out in order to secure the deal with Sinema. This one came from a proposal to impose a 15% corporate alternative minimum tax aimed at rich corporations that are accused of skirting their tax obligations. It was projected to raise $313 billion — more than 40% of the bill’s revenue.

While that part of the bill was altered, “$258 billion of that remains, so the vast majority remains,” Schumer said.

And while the carried interest provision was nixed, Schumer said Democrats added in an excise tax on stock buybacks that will bring in $74 billion. He said that multiple legislators he spoke with are “excited” about that update.

“I hate stock buybacks. I think they’re one of the most self serving things corporate America does,” Schumer said. “I’d like to abolish them.”

.