WASHINGTON (AP) — Democrats pushed their way economic package of the election year to Senate approval on Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original domestic vision but which still meets the party’s deep-rooted goals curb global warming, moderate pharmaceutical costs i taxing large corporations.
The estimated $740 billion package heads next door to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround from what looked like a doomed and lost effort that has suddenly returned to political life . Democrats remained tied, 51-50, with Vice President Kamala Harris casting the tie-breaking vote.
“It’s been a long, hard, and winding road, but we’re finally, finally here,” Senate Majority Leader Chuck Schumer, D-N.Y., said before the final votes.
“The Senate is making history. I am confident that the Inflation Reduction Act will endure as one of the defining pieces of legislation of the 21st century.”
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Senators engaged in an all-day marathon vote that began Saturday and continued into Sunday afternoon. Democrats pushed back about three dozen Republican amendments designed to torpedo the legislation. facing unanimous GOP opposition, Democratic unity in the 50-50 chamber remained, keeping the party on track for a morale-boosting victory three months from an election when control of Congress is at stake.
“I think it’s going to happen,” Biden told reporters as he left the White House early Sunday for Rehoboth Beach, Delaware, ending his COVID-19 isolation. The House appeared likely to provide final approval when Congress briefly returns from summer recess on Friday.
The bill ran into trouble at midday over objections to the new 15% minimum corporate tax that private equity firms and other industries did not like, forcing last-minute changes.
Despite the momentary setback, the “Inflation Reduction Act” gives Democrats ac the campaign season showcase for action on coveted goals. It includes the largest federal effort on climate change at nearly $400 billion, caps out-of-pocket drug costs for seniors with Medicare at $2,000 a year, and extends expiring subsidies that help 13 million people pay for health insurance. With the increase in corporate taxes, the whole package is paid for, with an additional $300 billion in revenue to reduce the deficit.
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Barely more than a tenth the size of Biden’s initial 10-year, $3.5 trillion rainbow of progressive aspirations in his Build Back Better initiative, the new package abandons previous proposals of universal preschool, paid family leave and extended child care assistance. That plan collapsed after conservative Senator Joe. Manchin, DW.Va., opposed it, saying it was too expensive and would fuel inflation.
Nonpartisan analysts have said the “Inflation Reduction Act” would have a smaller effect on rising consumer prices.
Republicans said the move would undermine an economy that policymakers are struggling to prevent from falling into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, making it harder for people to deal with the nation’s problems. worse inflation since the 1980s.
“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” argued Senate Minority Leader Mitch McConnell , from R-Ky. He said the spending and tax increases in the legislation would eliminate jobs and have a negligible impact on inflation and climate change.
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In an ordeal imposed on all budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of fast-track amendments. Each tested Democrats’ ability to hold together a compromise negotiated by Schumer, progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, D-Ariz.
Progressive Sen. Bernie Sanders, I-Vt., offered amendments to further expand the legislation’s health benefits, and those efforts were defeated. Most of the votes were forced by Republicans and many were designed to make Democrats look soft on US-Mexico border security and gas and energy costs, and as bullies for wanting to strengthen IRS tax law enforcement.
Before debate began Saturday, the nonpartisan Senate lawmaker watered down the bill’s prescription drug price reduction. Elizabeth MacDonough, who advises questions on the chamber’s procedures, said a provision that would impose costly penalties on drugmakers whose price increases for private insurers exceed inflation should fall.
It was the bill’s main protection for the 180 million people with private health coverage they get through work or purchase. Under special procedures that will allow Democrats to pass their bill by a simple majority without the usual 60-vote margin, its provisions must focus more on dollars-and-cents budget numbers than policy changes.
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But the thrust of his pharmaceutical pricing language remained. That included letting Medicare negotiate what it pays for drugs for its 64 million seniors, penalizing manufacturers for over-inflating pharmaceuticals sold to Medicare and capping beneficiaries’ out-of-pocket drug costs at $2,000 a year.
The bill also caps costs for Medicare patients insulin, the expensive diabetes drug, at $35 a month. Democrats wanted to extend the $35 cap to private insurers, but it broke Senate rules. Most Republicans voted to remove it from the package, although in a sign of the political power of health care costs, seven Republican senators joined Democrats in trying to preserve it.
Final costs of the measure were being recalculated to reflect late changes, but overall it would raise more than $700 billion over a decade. The money would come from a minimum tax of 15% on a handful of corporations with annual profits above $1 billion, a 1% tax on companies that buy back their own shares, strengthened IRS tax collection and government savings from lower drug costs.
Sinema forced Democrats to abandon a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates on their earnings. He also joined with other Western senators to win $4 billion to fight the region’s drought.
Several Democratic senators joined the GOP-led effort to exclude some companies from the new minimum corporate tax.
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The package fulfills Biden’s promise not to raise taxes on those making less than $400,000 a year.
It was on the energy and environment side where the compromise was most evident between progressives and Manchin, a supporter of fossil fuels and his state’s coal industry.
Clean energy would be encouraged with tax credits for the purchase of electric vehicles and the manufacture of solar panels and wind turbines. There would be energy rebates to households, funds to build factories that build clean energy technology, and money to promote climate-friendly agricultural practices and reduce pollution in minority communities.
Manchin won billions to help power plants reduce carbon emissions and language requiring more government auctions for oil drilling on federal lands and waters. Party leaders also pledged to push separate legislation this fall to speed up permitting for energy projects, which Manchin wants to include a nearly completed natural gas pipeline in his state.
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