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Senate passes Inflation Reduction Act, Democrats’ climate, health and tax bill, delivering win for Biden

Senate passes Democrats' sweeping climate, health and tax bill, delivering win for Biden

Washington— The Senate on Sunday passed Democrats’ sweeping economy package designed to combat climate change, address health care costs and raise taxes on large corporations, marking a crucial achievement for President Biden and his party as they look to maintain their hold on Congress in the November midterm elections.

The plan, called the Inflation Reduction Act, cleared the upper chamber by a vote of 51 to 50 along party lines, with Vice President Kamala Harris providing the tie-breaking vote in the evenly divided Senate. Democrats used a fast-track legislative process known as reconciliation to pass the measure in the face of unanimous opposition from Republicans.

“It’s been a long, tough and winding road but at last, at last, we have arrived,” Senate Majority Leader Chuck Schumer said in remarks on the Senate floor as members prepared to vote for final passage. “Today, after more than a year of hard work, the Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century.”

The vote came after a marathon session that lasted through the night and into Sunday afternoon, with Democrats breaking into applause as members cast their final votes. In a process known as a “vote-a-rama,” Republicans offered a slew of amendments that Democrats successfully swatted down over nearly 16 hours of debate.

GOP senators did manage to block a provision that would have capped the price of insulin at $35 a month for those covered under private health care plans. Democrats needed 60 votes to waive reconciliation rules and keep that part of the bill, but it failed 57 to 43, with seven Republicans joining Democrats in support of the measure.

House Democratic leaders announced last week the lower chamber will return from its month-long recess on Friday to take up the legislation, which is expected to pass.

Mr. Biden praised Senate Democrats for passing the plan and acknowledged it required “many compromises.” He urged the House to swiftly approve the bill.

“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” the president said in to statement. “I ran for president promising to make government work for working families again, and that is what this bill does — period.”

The package is the culmination of months of negotiations over Mr. Biden’s domestic policy agenda, which at times appeared to be on life support but was revived late last month with the surprise announcement of an agreement between Schumer and Sen. Joe Manchin, a moderate Democrat from West Virginia.

WASHINGTON, DC - AUGUST 6: Senator Joe Manchin (D-WV) chats wit
Sen. Joe Manchin chats with his staffers on Capitol Hill in Washington on Aug. 6, 2022.

Shuran Huang for The Washington Post via Getty Images


While the legislation is much more narrow than the sprawling $3.5 trillion proposal put forth by Mr. Biden last year, the tailored package had the backing of Manchin and Sen. Kyrsten Sinema, a Democrat from Arizona whose support was crucial.

Still, Democrats praise the plan as their answer to addressing rising consumer prices and for its nearly $400 billion investment in fighting climate change, the largest ever. The package allows Medicare to negotiate prescription drug prices, a key Democratic priority that is expected to save hundreds of billions of dollars over the next 10 years. It also extends enhanced health insurance subsidies that were set to expire at the end of the year, and imposes a 15% minimum tax on most corporations that make more than $1 billion each year.

The corporate tax provision emerged as a point of contention as senators neared a final vote on Sunday. Seven Democratic senators — Sinema, Jon Ossoff, Raphael Warnock, Catherine Cortez Masto, Maggie Hassan, Mark Kelly and Jacky Rosen — joined Republicans in backing an amendment put forward by GOP Sen. John Thune of South Dakota exempts some firms with private equity backing from the 15% minimum corporate tax rate. That amendment passed 57 to 43.

To boost clean energy, the measure includes tax credits for buying electric vehicles and manufacturing solar panels and wind turbines. It also provides rebates for consumers who buy energy efficient appliances and provides $4 billion for drought relief.

Schumer lauded the bill as the “boldest climate package” in US history, and called it a “game-changer” and “turning point.”

“It’s been a long time coming,” he said.

One piece of Democrats’ drug-pricing plan — imposing penalties on drug manufacturers that raised prices beyond inflation on private insurers — was removed after it was reviewed by Senate parliamentarian Elizbeth MacDonough. Her approval of the rest of the package, however, cleared the way for the upper chamber to move forward with its consideration of the bill.

The Congressional Budget Office estimates the legislation will cut the deficit by $102 billion over the next 10 years. Republicans, though, argued the plan will have little impact on inflation and instead raise taxes while leading to job losses.

in an interview with “Face the Nation” on Sunday, Sen. Rick Scott, a Republican from Florida, claimed Democrats’ drug pricing plan will harm seniors, while the tax component will increase taxes on Americans.

“Why would you be increasing the cost of government? We’re increasing taxes,” he said.

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US

Senate passes Democrats’ sweeping climate, health and tax bill, delivering win for Biden

Senate passes Democrats' sweeping climate, health and tax bill, delivering win for Biden

Washington— The Senate on Sunday passed Democrats’ sweeping economy package designed to combat climate change, address health care costs and raise taxes on large corporations, marking a crucial achievement for President Biden and his party as they look to maintain their hold on Congress in the November midterm elections.

The plan, called the Inflation Reduction Act, cleared the upper chamber by a vote of 51 to 50 along party lines, with Vice President Kamala Harris providing the tie-breaking vote in the evenly divided Senate. Democrats used a fast-track legislative process known as reconciliation to pass the measure in the face of unanimous opposition from Republicans.

“It’s been a long, tough and winding road but at last, at last, we have arrived,” Senate Majority Leader Chuck Schumer said in remarks on the Senate floor as members prepared to vote for final passage. “Today, after more than a year of hard work, the Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century.”

The vote came after a marathon session that lasted through the night and into Sunday afternoon, with Democrats breaking into applause as members cast their final votes. In a process known as a “vote-a-rama,” Republicans offered a slew of amendments that Democrats successfully swatted down over nearly 16 hours of debate.

GOP senators did manage to block a provision that would have capped the price of insulin at $35 a month for those covered under private health care plans. Democrats needed 60 votes to waive reconciliation rules and keep that part of the bill, but it failed 57 to 43, with seven Republicans joining Democrats in support of the measure.

House Democratic leaders announced last week the lower chamber will return from its month-long recess on Friday to take up the legislation, which is expected to pass.

Mr. Biden praised Senate Democrats for passing the plan and acknowledged it required “many compromises.” He urged the House to swiftly approve the bill.

“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” the president said in to statement. “I ran for president promising to make government work for working families again, and that is what this bill does — period.”

The package is the culmination of months of negotiations over Mr. Biden’s domestic policy agenda, which at times appeared to be on life support but was revived late last month with the surprise announcement of an agreement between Schumer and Sen. Joe Manchin, a moderate Democrat from West Virginia.

WASHINGTON, DC - AUGUST 6: Senator Joe Manchin (D-WV) chats wit
Sen. Joe Manchin chats with his staffers on Capitol Hill in Washington on Aug. 6, 2022.

Shuran Huang for The Washington Post via Getty Images


While the legislation is much more narrow than the sprawling $3.5 trillion proposal put forth by Mr. Biden last year, the tailored package had the backing of Manchin and Sen. Kyrsten Sinema, a Democrat from Arizona whose support was crucial.

Still, Democrats praise the plan as their answer to addressing rising consumer prices and for its nearly $400 billion investment in fighting climate change, the largest ever. The package allows Medicare to negotiate prescription drug prices, a key Democratic priority that is expected to save hundreds of billions of dollars over the next 10 years. It also extends enhanced health insurance subsidies that were set to expire at the end of the year, and imposes a 15% minimum tax on most corporations that make more than $1 billion each year.

The corporate tax provision emerged as a point of contention as senators neared a final vote on Sunday. Seven Democratic senators — Sinema, Jon Ossoff, Raphael Warnock, Catherine Cortez Masto, Maggie Hassan, Mark Kelly and Jacky Rosen — joined Republicans in backing an amendment put forward by GOP Sen. John Thune of South Dakota exempts some firms with private equity backing from the 15% minimum corporate tax rate. That amendment passed 57 to 43.

To boost clean energy, the measure includes tax credits for buying electric vehicles and manufacturing solar panels and wind turbines. It also provides rebates for consumers who buy energy efficient appliances and provides $4 billion for drought relief.

Schumer lauded the bill as the “boldest climate package” in US history, and called it a “game-changer” and “turning point.”

“It’s been a long time coming,” he said.

One piece of Democrats’ drug-pricing plan — imposing penalties on drug manufacturers that raised prices beyond inflation on private insurers — was removed after it was reviewed by Senate parliamentarian Elizbeth MacDonough. Her approval of the rest of the package, however, cleared the way for the upper chamber to move forward with its consideration of the bill.

The Congressional Budget Office estimates the legislation will cut the deficit by $102 billion over the next 10 years. Republicans, though, argued the plan will have little impact on inflation and instead raise taxes while leading to job losses.

in an interview with “Face the Nation” on Sunday, Sen. Rick Scott, a Republican from Florida, claimed Democrats’ drug pricing plan will harm seniors, while the tax component will increase taxes on Americans.

“Why would you be increasing the cost of government? We’re increasing taxes,” he said.

.

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US

Parliamentarian weakens Democrats’ drug plan in Inflation Reduction Act, as Senate prepares to vote

Parliamentarian weakens Democrats' drug plan in Inflation Reduction Act, as Senate prepares to vote

The Senate parliamentarian on Saturday dealt a blow to Democrats’ plan for curbing drug prices but left the rest of their sprawling economic bill largely intact as party leaders prepared for the first votes on a package containing many of President Joe Biden’s top domestic goals.

Elizabeth MacDonough, the chamber’s nonpartisan rules arbitrator, said lawmakers must remove language imposing hefty penalties on drugmakers that increase their prices beyond inflation in the private insurance market. Those were the bill’s chief pricing protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or bought on their own.

Other major provisions were left intact, including giving Medicare the power to negotiate what it pays for pharmaceuticals for its 64 million elderly recipients, a longtime goal for Democrats. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a $2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries.

Her rulings came as Democrats planned to begin Senate votes Saturday on their wide-ranging package addressing climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they believe they have the unity they will need to move the legislation through the 50-50 Senate, with Vice President Kamala Harris expected to cast votes to break ties, since all of the Republicans are expected to oppose the bill.

“This is a major win for the American people,” Senate Majority Leader Chuck Schumer, DN.Y., said of the bill, which both parties are using in their election-year campaigns to assign blame for the worst period of inflation in four decades.

“At a time of seemingly impenetrable gridlock, the inflation reduction act will show the American people that when the moment demands it, Congress is still capable of taking big steps to solve big challenges,” Schumer said. “We will show the American people that, yes, we are capable of passing a historic climate package and rein in drug companies and make our tax code fairer.”

In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “are misreading the American people’s outrage as a mandate for yet another reckless taxing and spending spree.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families yet a second time.”

Dropping penalties on drugmakers reduces incentives on pharmaceutical companies to restrain what they charge, increasing costs for patients.

Erasing that language will cut the $288 billion in 10-year savings that the Democrats’ overall drug curbs were estimated to generate — a reduction of perhaps tens of billions of dollars, analysts have said.

Schumer said MacDonough’s decision about the price cap for private insurance was “one unfortunate ruling.” But he said the surviving drug pricing language represented “a major victory for the American people” and that the overall bill “remains largely intact.”

The ruling followed a 10-day period that saw Democrats resurrect top components of Biden’s agenda that had seemed dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a broad package that, while a fraction of earlier, larger versions that Manchin derailed, would give the party an achievement against the backdrop of this fall’s congressional elections.

The parliamentarian also signed off on a fee on excess emissions of methane, a powerful greenhouse gas contributor, from oil and gas drilling. She also let stand environmental grants to minority communities and other initiatives for reducing carbon emissions, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.

She approved a provision requiring union-scale wages to be paid if energy efficiency projects are to qualify for tax credits, and another that would limit electric vehicle tax credits to those cars and trucks assembled in the United States.

The overall measure faces unanimous Republican opposition. But assuming Democrats fight off a nonstop “vote-a-rama” of amendments — many designed by Republicans to derail the measure — they should be able to muscle the measure through the Senate.

The House is returning Friday to vote on the bill.

“What will vote-a-rama be like. It will be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments. He said that in supporting the Democratic bill, Manchin and Sinema “are empowering legislation that will make the average person’s life more difficult” by forcing up energy costs with tax increases and making it harder for companies to hire workers.

The bill offers spending and tax incentives for moving toward cleaner fuels and supporting coal with assistance for reducing carbon emissions. Expiring subsidies that help millions of people afford private insurance premiums would be extended for three years, and there is $4 billion to help Western states combat drought.

There would be a new 15% minimum tax on some corporations that earn over $1 billion annually but pay far less than the current 21% corporate tax. There would also be a 1% tax on companies that buy back their own stock, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to strengthen its tax collections.

While the bill’s final costs are still being determined, it overall would spend more than $300 billion over 10 years to slow climate change, which analysts say would be the country’s largest investment in that effort, and billions more on health care. It would raise more than $700 billion in taxes and from government drug cost savings, leaving about $300 billion for deficit reduction — a modest bite out of projected 10-year shortfalls of many trillions of dollars.

Democrats are using special procedures that would let them pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.

It is the parliamentarian’s job to decide whether parts of legislation must be dropped for violating those rules, which include a requirement that provisions be chiefly aimed at affecting the federal budget, not imposing new policy.

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Senate Dems announce they have the votes to pass Inflation Reduction Act

Senate Dems announce they have the votes to pass Inflation Reduction Act

Senate Democrats have reached an agreement on changes to their marquee economic legislationthey announced late Thursday, clearing the major hurdle to pushing one of President Joe Biden’s leading election-year priorities through the chamber in coming days.

Sen. Kyrsten Sinema, D-Ariz., a centrist who was seen as the pivotal vote, said in a statement that she had agreed to changes in the measure’s tax and energy provisions and was ready to “move forward” on the Inflation Reduction Act.

Senate Majority Leader Chuck Schumer, DN.Y., said lawmakers had achieved a compromise “that I believe will receive the support” of all Democrats in the chamber. His party needs unanimity to move the measure through the 50-50 Senate, along with Vice President Kamala Harris’ tie-breaking vote.

Schumer has said he hopes the Senate can begin voting on the energy, environment, health and tax measure on Saturday. Passage by the House, which Democrats control narrowly, could come next week.

Final congressional approval of the election-year measure would complete an astounding, eleventh-hour salvation of Mr. Biden’s wide-ranging domestic goals, though in more modest form. Democratic infighting had embarrassed Mr. Biden and forced him to stop down a far larger and more ambitious $3.5 trillion, 10-year version, and then a $2 trillion alternative, leaving the effort all but dead.

This bill, negotiated by Schumer and Sen. Joe Manchin, the conservative maverick Democrat from West Virginia, would raise $739 billion in revenue. That would come from tax boosts on high earners and some huge corporations, beefed up IRS tax collections and curbs on drug prices, which would save money for the government and patients.

It would spend much of that on energy, climate and health care initiatives, still leaving over $300 billion for deficit reduction.

Sinema said Democrats had agreed to remove a provision raising taxes on “carried interest,” or profits that go to executives of private equity firms. That’s been a proposal she has long opposed, though it is a favorite of Manchin and many progressives.

The carried interest provision was estimated to produce $13 billion for the government over the coming decade, a small portion of the measure’s $739 billion in total revenue.

It will be replaced by a new excise tax on stock buybacks which will bring in more revenue than that, said one Democrat familiar with the agreement who spoke on condition of anonymity because they were not authorized to discuss the deal publicly. The official provided no other detail.

Though providing no detail, Sinema said she had also agreed to provisions to “protect advanced manufacturing and boost our clean energy economy.”

She noted that Senate parliamentarian Elizabeth MacDonough is still reviewing the measure to make sure no provisions must be removed for violating the chamber’s procedures. “Subject to the parliamentarian’s review, I’ll move forward,” Sinema said.

“Tonight, we’ve taken another critical step toward reducing inflation and the cost of living for America’s families,” a statement from Mr. Biden read. “The Inflation Reduction Act will help Americans save money on prescription drugs, health premiums, and much more. It will make our tax system more fair by making corporations pay a minimum tax. It will not raise taxes on those making less than $400,000, and it will reduce the deficit.It also makes the largest investment in history in combatting climate change and increasing energy security, creating jobs here in the US and saving people money on their energy costs.I look forward to the Senate taking up this legislation and passing it as soon as possible.”

Schumer said the measure retained the bill’s language on prescription drug pricing, climate change, “closing tax loopholes exploited by big corporations and the wealthy” and reducing federal deficits.

He said that in talks with fellow Democrats, the party “addressed a number of important issues they have raised.” I have added that the final measure “will reflect this work and put us one step closer to enacting this historic legislation into law.”

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