The package is the product of painstaking negotiations and will give Democrats a chance to achieve major policy goals before the upcoming midterm elections. Senate Democrats are using a special process to pass the package without Republican votes.
Once the legislation has passed the Senate, it will need to be approved by the House of Representatives before President Joe Biden can sign it into law.
The Senate is expected to take the first procedural vote to proceed with the bill sometime Saturday. A simple majority is required for the motion to proceed.
A vote is not yet scheduled, but Senate Majority Leader Chuck Schumer said shortly after noon ET on Saturday that “within hours” the chamber “would formally begin the process of approving the Inflation Reduction Act”.
Democrats control the narrowest possible majority and just 50 seats in the Senate, but are expected to unite to advance the bill in the initial procedural vote.
Arizona Sen. Kyrsten Sinema offered critical support Thursday night after party leaders agreed to change the new tax proposals, saying she would “move forward” on the broad economic package. West Virginia Democratic Sen. Joe Manchin has also played a key role in shaping the legislation, which is only moving forward after Manchin and Schumer announced a deal in late July, a major breakthrough for Democrats after previous negotiations stalled. they had stalled Senate Democrats need only a simple majority for final passage of the bill because they are using a process known as reconciliation, which allows them to avoid a Republican filibuster and the corresponding 60-vote threshold.
However, to pass a bill through the reconciliation process, the package must meet a strict set of budget rules.
The Senate lawmaker must decide whether the bill’s provisions meet rules that allow Democrats to use the filibuster-proof budget process to pass legislation along straight party lines.
Schumer announced Saturday that after undergoing congressional review, the bill “remains largely intact.”
“The bill, when passed, will accomplish all of our goals: fighting climate change, reducing health care costs, closing tax loopholes abused by the wealthy and reducing the deficit,” said the Democrat from New York.
In a key ruling, Rep. Elizabeth MacDonough allowed a major component of Democrats’ prescription drug pricing plans to move forward, giving Medicare the power to negotiate the prices of certain prescription drugs for the first time.
But MacDonough cut another provision aimed at lowering drug prices: imposing penalties on drug companies if they raise their prices faster than inflation. Democrats had wanted the measure to apply to both Medicare and the private insurance market. But the lawmaker ruled that the inflation cap could only be applied to Medicare, a Democratic aide said.
Democrats are awaiting new cost estimates from the nonpartisan Congressional Budget Office to see how the ruling affects their deficit projections. The reduction in drug provision is likely to limit the reduction in the package deficit somewhat.
MacDonough, meanwhile, ruled to keep several of the Environment and Public Works Committee’s climate measures intact in the reconciliation bill, including a methane tax that would apply to oil and gas producers who leak powerful methane from shale gas. greenhouse effect above a certain threshold.
Earlier Saturday, Senate Finance Chairman Ron Wyden, R-Oregon, announced that the Clean Energy Tax portion of the bill “adheres to Senate rules and the House has passed important provisions to ensure our clean energy future is built in America.”
What happens after the bill faces its first key vote
If the first procedural vote to proceed with the bill is supported by all 50 Democratic caucus members, which is expected, there would be up to 20 hours of debate split evenly between the two parties, though some of this time could be given to speed up the process.
It’s not yet clear how much of the allotted debate time each side will use, but some Republicans say they won’t try to use it all. And Democrats are expected to give up some of their time.
Asked if he plans to use a lot of debate time, which could delay the final passage of the bill by the Senate, Republican Sen. Rand Paul of Kentucky said, “Probably not.”
Another Republican senator, Ron Johnson of Wisconsin, said Saturday that he would not force Senate clerks to read the full bill, as any senator could request under the rules. Johnson forced a reading of the US Bailout legislation during last year’s budget process, delaying a vote on the bill.
After the time for debate, there would be a process known colloquially on Capitol Hill as a “vote-a-rama” — a marathon series of votes on amendments without a time limit that must run their course before they can take place a final vote.
Republicans will be able to use the vote-a-rama to put Democrats on the ground and force politically tough votes. The process usually extends through the night and into the early hours of the next morning.
Senators widely expect Republicans to try to remove the insulin provisions included in the Senate Democrats’ climate and health care bill during the floor vote, which will also force the Senate’s real-time to decide if it is to stay. on the invoice
These provisions would cap insulin prices at $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the lawmaker ruled that the cap on insulin in the private insurance market did not fit the reconciliation. Democrats were not surprised by his decision on the private market cap, but expect the Medicare insulin cap to stand, according to the aide.
But either way, the aide said, Democrats will keep the two insulin provisions in the bill as they move forward, challenging the GOP to move and try to strike them in the Senate.
It is not yet clear exactly when the vote-a-rama will begin, but it could begin as early as Saturday evening. If that happens, a final vote could take place as early as early Sunday morning.
Sen. Patrick Leahy, D-Vermont, who has recovered from hip surgery, returned to the Senate on Saturday. His return is essential for Democrats, who need the votes of all 50 members of their conference to move the bill forward.
Senator John Cornyn, Republican of Texas, has also returned to the Senate after his absence last week after testing positive for Covid-19.
The House is set to return to take up the legislation on Friday, August 12, according to House Majority Leader Steny Hoyer’s office.
How the bill addresses the climate crisis
For a party that failed to pass major climate legislation more than 10 years ago, the reconciliation bill represents an important and long-fought victory for Democrats.
The nearly $370 billion clean energy and climate package is the largest climate investment in U.S. history and the biggest victory for the environmental movement since the landmark Clean Air Act. It also comes at a critical time; this summer has seen punishing heat waves and deadly floods across the country, which scientists say are linked to global warming.
Analysis by Schumer’s office, as well as multiple independent analyses, suggests the measures would reduce US carbon emissions by up to 40% by 2030. It would require strong climate regulations from the Biden administration and action of states to reach Biden’s goal of reducing emissions by 50% by 2030.
The bill also contains many tax incentives aimed at reducing the cost of electricity with more renewable energy and encouraging more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is also just the beginning of what is needed to combat the climate crisis.
“This is not about the laws of politics, this is about the laws of physics,” Sen. Brian Schatz, D-Hawaii, told CNN. “We all knew that in this endeavor we had to do what science tells us what to do.”
Key health and fiscal policy in the bill
The bill would allow Medicare to negotiate the prices of certain expensive drugs administered in doctor’s offices or purchased at the pharmacy. The Department of Health and Human Services would negotiate prices for 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. That number would increase to 20 drugs a year by 2029 and beyond.
That controversial provision is much more limited than what House Democratic leaders have supported in the past. But it would open the door to fulfilling a long-standing party goal of allowing Medicare to use its weight to lower drug costs.
Democrats also plan to extend enhanced federal subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they wouldn’t expire right after the 2024 presidential election.
To raise revenue, the bill would impose a minimum tax of 15 percent on the income that large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits above $1 billion.
Concerned about how that provision would affect certain businesses, particularly manufacturers, Sinema has suggested she won changes to the Democrats’ plan to reduce how businesses can deduct depreciated assets from their taxes. The details remain unclear.
However, Sinema rejected his party’s effort to tighten the interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a tax rate on long-term capital gains of 20% instead of income tax rates of up to 37%.
The provision would have extended the time that investment managers’ profit interests must be held from three years to five years to take advantage of the lower tax rate. Addressing that gap, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.
In its place, a 1 percent excise tax on corporate share buybacks was added, raising another $74 billion, according to a Democratic aide.
This story has been updated with additional news.
CNN’s Jessica Dean, Manu Raju, Ella Nilsen, Tami Luhby, Katie Lobosco and Melanie Zanona contributed to this report.
