The Democrats began to press their own economic bill of the election year on Saturday in the Senate, starting the extensive collection of President Joe Biden’s priorities on climate, energy, health and taxes on a path through Congress that the party hopes will end with victory later this week.
In a preview of highly partisan votes expected on a mountain of amendments, the evenly divided Senate voted to begin debate on the legislation 51-50, with Vice President Kamala Harris breaking a tie and passing the 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 .
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The House, where Democrats hold a slim majority, could give final approval to the legislation next Friday when that chamber plans to return to Washington briefly from summer recess.
“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.”
Republicans said the move would hurt the economy and make it harder for people to cope with sky-high inflation. They said the bill’s business taxes would hurt job creation and force prices up, and urged voters to remember that in November.
“The best way to stop this tax and spend inflationary madness is to lay off some of the 50s so they can’t keep doing this to your family,” said South Carolina Sen. Lindsey Graham, the top Republican on the Appropriations Committee. of the Senate.
Nonpartisan analysts have said the legislation, which Democrats have dubbed the Inflation Reduction Act, would have a minor impact on the nation’s worst bout of inflation in four decades. Still, it would take aim at issues the party has wanted to tackle for years, including global warming, pharmaceutical costs and taxes on huge corporations.
Saturday before the senate parliamentarian gave a thumbs up in 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 drug companies that raise prices beyond inflation for drugs sold in the private insurance market. These were the main drug 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.
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.
Before the legislation passes, Democrats will have to fight off a non-stop “vote-a-rama” of amendments. Most will be designed by Republicans to roll back the bill or at least force vulnerable Democrats facing re-election and party moderates into tough votes on issues like inflation, taxes and immigration.
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 Democrats’ two most unpredictable senators – first conservative Joe Manchin of West Virginia, then centrist Kyrsten Sinema of Arizona – Schumer put together a package that would give the party a hit in the context of congressional elections this fall
The move is a shadow of Biden’s initial 10-year, $3.5 trillion proposal, which funded a rainbow of progressive dreams including paid family leave, universal preschool, child care and bigger tax breaks for to families with children. The current bill, barely more than a tenth of that size, was watered down as Democratic leaders tried to win votes from centrists Manchin and Sinema, but it has unified a party eager to declare the victory and show voters that they are addressing their issues.
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.
Reflecting calls from Democrats for tax fairness, there would be a new 15% minimum tax on some corporations with annual profits of more than $1 billion but paying well below the 21 corporate tax %. Companies buying back their own shares would be taxed 1% on such transactions, changed after Sinema refused to bear higher taxes on hedge fund managers. The IRS budget would be increased to strengthen its tax collection.
While the final costs of the bill were still being determined, it would 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 thousands of millions 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.
