WASHINGTON (AP) — Democrats pushed through their election year economic package to the Senate on Sunday, a hard-won compromise less ambitious than President Joe Biden’s original domestic vision but one that still fulfills entrenched party goals to slow global warmingmoderating pharmaceutical costs and tax huge corporations.
The estimated $740 billion package comes next to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning reversal of what seemed a lost and doomed effort that suddenly resurfaced in political life. Cheers erupted as Senate Democrats united, 51-50, with Vice President Kamala Harris casting the casting vote after an all-night session.
“Today, Senate Democrats sided with American families because of special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware. “I ran to President and promised to make the government work for working families again, and that’s what this bill does — period.”
Biden, who had his fair share of long nights during his three decades as a senator, called on the speakerphone to the Senate cloakroom during the vote to personally thank the staff for their hard work.
The president urged the House of Representatives to pass the bill as soon as possible. Speaker Nancy Pelosi said her chamber would “act quickly to send this bill to the president’s desk.” House votes are expected on Friday.
“It’s been a long, difficult and winding road, but we’re finally here,” said Senate Leader Chuck Schumer, DN.Y., ahead of the final votes.
“The Senate is making history. I am confident that the Inflation Reduction Act will continue to exist as one of the defining legislative achievements of the 21st century,” he said.
Senators took part in a 24-hour marathon of voting that began Saturday and lasted until late Sunday afternoon. Democrats knocked down some three dozen Republican amendments designed to torpedo the legislation. Facing unanimous GOP opposition, Democratic unity in the 50-50 chamber kept the party on track for a moral victory three months after the election when congressional control is at stake.
The bill ran into trouble in the afternoon over objections to the new 15% corporate tax that private equity firms and other industries disliked, forcing last-minute changes.
Despite the temporary setback, the “Inflation Reduction Act” gives Democrats a showcase for the campaign season for action on coveted targets. It includes the largest-ever federal effort on climate change — nearly $400 billion — covering out-of-pocket drug costs for seniors on Medicare up to $2,000 a year and extending expiring grants that help 13 million people afford health insurance. By raising corporate taxes and making savings on the long-sought goal of allowing the government to negotiate drug prices for Medicare, the whole package is being paid for, with some $300 billion in additional revenue for curbing drug use. the shortage.
Barely more than a tenth the size of Biden’s first 10-year, $3.5 trillion Build Back Better initiative, the new package abandons previous proposals for universal early childhood care, paid family leave and comprehensive childcare benefits. That plan collapsed after Conservative Senator Joe. Manchin, DW.Va., opposed it, saying it was too expensive and would fuel inflation.
Unbiased analysts have said the 755-page “Inflation Reduction Act” would have little effect on rising consumer prices.
Republicans said the new measure would undermine an economy that policymakers struggle to avoid slipping into recession. They said the bill’s business taxes would hurt job creation and push prices up, making it harder for people to cope with the country’s worst inflation. since the eighties.
“Democrats have already robbed American families through inflation once, and now their solution is to rob American families a second time,” said Senate Leader Mitch McConnell, R-Ky.
In an ordeal imposed on most budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of rapid-fire amendments. Each tested the Democrats’ ability to hold together the compromise bill negotiated by Schumer, progressives, Manchin and the inscrutable centrist Senator Kyrsten Sinema, D-Ariz.
Progressive Senator Bernie Sanders, I-Vt., criticized the bill’s shortcomings and offered amendments to further extend the legislation’s health benefits, but those efforts were rejected. Republicans forced their own votes, intended to make Democrats look weak on US-Mexico border security and gas and energy costs, and as bullies for strengthening IRS tax law enforcement.
Before the debate began, price restrictions on prescription drugs were relaxed by the impartial Senate MP, who said a provision should be dropped that would impose costly penalties on drug manufacturers whose price increases for private insurers exceed inflation.
It was the bill’s primary protection for the 180 million people with private health insurance that they receive through work or buy themselves. Under special procedures that allow Democrats to pass their bill by a simple majority without the usual margin of 60 votes, its provisions should focus more on budget figures in dollars and cents than on policy changes.
But the thrust of the Democrats’ language on pharmaceutical pricing remained. That included requiring Medicare to negotiate what it pays for drugs for its 64 million elderly recipients, sanctioning manufacturers for exceeding inflation for drugs sold to Medicare, and limiting beneficiaries’ own drug costs to $2,000. per year.
The bill also covers Medicare patients’ costs for insulin, the expensive diabetes medication, for $35 a month. Democrats wanted to extend the $35 limit to private insurers, but this violated Senate rules. Most Republicans voted to take it out of the package, although in a sign of the political potential of health costs, seven GOP senators joined Democrats to keep it.
The final cost of the measure was recalculated to reflect the late changes, but in total it would bring in more than $700 billion in a decade. The money would come from a minimum tax of 15% on a handful of companies with annual profits of more than $1 billion, a 1% tax on companies that buy back their own shares, strengthened IRS tax collections and government savings through lower drug costs.
Sinema forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying less than individual income taxes on their earnings. She also joined other Western senators in winning $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.
The package honors Biden’s promise not to impose taxes on those earning less than $400,000 a year.
On the energy and environmental side, the compromise was most apparent between progressives and Manchin, a champion of fossil fuels and his state’s coal industry.
Clean energy would be promoted with tax credits for the purchase of electric vehicles and the production of solar panels and wind turbines. There would be energy rebates for homes, funds to build factories that build clean energy technology, and money to promote climate-friendly farming practices and reduce pollution in minority communities.
Manchin won billions to help power plants lower carbon emissions, plus language requiring more government auctions for oil drilling on federal land and water. Party leaders also pledged to pass separate legislation this fall to speed up permits for energy projects, with Manchin looking to include a nearly completed natural gas pipeline in his state.
Still, environmental groups hailed the passage as a landmark. “Huge progress,” Manish Bapna, president and CEO of the Natural Resources Defense Council, said in a statement.
Associated Press writers Chris Megerian in Rehoboth, Del., and Matthew Daly in Washington contributed to this report.