The Senate votes in favor of the Inflation Reduction Act
Senate Majority Leader Chuck Schumer, DN.Y. delivers a speech before senators vote to advance the Democrats’ climate, energy and tax bill.
WASHINGTON (AP) – A divided Senate voted Saturday to begin debating Democrats’ election-year economic bill, pushing the extensive collection of President Joe Biden’s priorities on climate, energy, health and taxes beyond its initial test as it begins to move through Congress.
In a preview of expected votes on a mountain of amendments, united Democrats pushed the legislation through the divided chamber 51-50, with Vice President Kamala Harris breaking the tie and overcoming unanimous Republican opposition. The package, a watered-down version of earlier trillion-dollar measures that Democrats failed to advance, has become a partisan battleground over inflation, gas prices and other issues that polls show are driving voters .
The House, where Democrats hold a slim majority, could give it final approval next Friday when lawmakers plan to return to Washington.
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The vote came after the Senate panel gave the thumbs-up to most of the Democrats’ revised 755-page bill. But Elizabeth MacDonough, the chamber’s nonpartisan rules arbiter, said Democrats had to abandon a key part of their plan to curb drug prices.
MacDonough said Democrats violated Senate budget rules with language that imposed heavy penalties on drugmakers who raise their prices beyond inflation in the private insurance market. These were the main price protections in the bill for the approximately 180 million people whose health coverage comes from private insurance, either through work or purchased on their own.
Harris cites climate ‘crisis’, pushes $1 billion for floods and storms
Vice President Kamala Harris cited the deadly floods that have ravaged Kentucky and Missouri, “that have washed away entire neighborhoods,” that left at least 35 dead, including children. At least two people have died in a wildfire in Northern California that was among several threatening wildfires. thousands of homes in the western U.S. Hot, sweltering weather and lightning storms threatened to increase the danger of the fires continuing to grow, “The devastation is real. The damage is real. The impact is real,” Harris said. . “And we’re witnessing it in real time.”
Other drug provisions were left untouched, including giving Medicare the power to negotiate what it pays for drugs for its 64 million seniors, a longtime Democratic aspiration. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is an annual cap of $2,000 to pay the costs of free drugs and vaccines for Medicare beneficiaries.
“Now is the time to move forward with a big, bold package for the American people,” said Senate Majority Leader Chuck Schumer, DN.Y. “This historic bill will reduce inflation, reduce costs, fight climate change. It’s time to move this nation forward.”
Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “are misinterpreting the outrage of the American people as a mandate for yet another reckless tax and spending.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families a second time.”
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Saturday’s vote capped a stunning 10-day period in which Democrats resurrected key components of Biden’s agenda that seemed dead. In quick deals with the two most unpredictable senators of the Democrats: first conservative Joe Manchin of West Virginiaso Arizona center Kyrsten Sinema — Schumer crafted a package that would give the party a boost against the backdrop of this fall’s congressional elections.
A White House statement said the legislation would “help address today’s most pressing economic challenges, strengthen our economy for decades to come, and position the United States as a world leader in clean energy.”
Assuming Democrats fight off an endless “vote-a-rama” of amendments, many designed by Republicans to derail the measure, they should be able to push the measure through the Senate.
“What’s the vote-a-rama going to be like? It’s going to be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Appropriations Committee, said of the upcoming GOP amendments. He said that by supporting the Democratic bill, Manchin and Sinema “are boosting legislation that will make life harder for the average person” by forcing down energy costs with tax increases and making it harder for businesses to hire workers.
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The bill offers spending and tax incentives favored by progressives to buy electric vehicles and make buildings more energy efficient. But in a nod to Manchin, whose state is a major producer of fossil fuels, there is also money to reduce carbon emissions from coal plants and language requiring the government to open more federal lands and waters in oil drilling.
Expired subsidies that help millions pay private insurance premiums would be extended for three years, and there is $4 billion to help Western states fight the drought. A new provision would create a $35 monthly cap on insulin, the expensive diabetes drug, for Medicare and private insurance patients starting next year. It seemed possible that the language could be weakened or eliminated during the debate.
Inflation reached 9.1% last year, the highest in the last 40 years
Consumer prices rose 9.1 percent from a year earlier, the government said, the biggest annual increase since 1981, and up from 8.6 percent in May. In monthly terms, prices rose 1.3% from May to June, another substantial increase, after prices had risen 1% from April to May.
Reflecting calls from Democrats for tax fairness, there would be a new 15% minimum tax on some corporations that make more than $1 billion a year but pay far less than the current 21% corporate tax. Companies buying back their own shares would be taxed 1% on such transactions, changed after Sinema refused to shoulder higher taxes on private equity firm executives and hedge fund managers. The IRS budget would increase to strengthen its tax collection.
While the bill’s final costs are still being determined, it would generally spend nearly $400 billion over 10 years to curb climate change, which analysts say would be the nation’s largest investment in the effort. and billions more in health care. It would raise more than $700 billion in taxes and drug cost savings from the government, leaving about $300 billion for deficit reduction over the next decade, a miss compared to the $16 trillion projected over that period in budget deficit.
Democrats are using special procedures that would allow them to pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.
Parliament decides whether to drop parts of the legislation for violating those rules, which include the requirement that the provisions be primarily intended to affect the federal budget, not to impose new policy.
Associated Press writer Matthew Daly contributed to this report.
