Senate passes climate package
House poised to OK president’s economic plan in vote Friday
WASHINGTON — Democrats pushed their election-year economic package to Senate passage Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original domestic vision but one that still meets deep-rooted party goals of slowing global warming, moderating pharmaceutical costs and taxing immense corporations.
The estimated $740 billion package heads next to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround of what had seemed a lost and doomed effort that suddenly roared back to political life.
Cheers broke out as Senate Democrats held united, 51-50, with Vice President Kamala Harris casting the tie-breaking vote after an all-night session.
“Today, Senate Democrats sided with American families over special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware. “I ran for President promising to make government work for working families again, and that is what this bill does — period.”
Biden urged the House to pass the bill as soon as possible.
Speaker Nancy Pelosi said her chamber would “move swiftly to send this bill to the president’s desk.”
House votes are expected Friday.
“It’s been a long, tough and winding road, but at last, at last we have arrived,” said Senate Majority Leader Chuck Schumer, D-N.Y., ahead of final votes.
Senators engaged in a round-the-clock marathon of voting that began Saturday and stretched late into Sunday afternoon. Democrats swatted down some three dozen Republican amendments designed to torpedo the legislation.
The bill ran into trouble midday over objections to the new 15% corporate minimum tax that private equity firms and other industries disliked, forcing last-minute changes.
Despite the momentary setback, the “Inflation Reduction Act” gives Democrats a campaign-season showcase for action on coveted goals.
It includes the largest-ever federal effort on climate change — close to $400 billion — caps out-ofpocket drug costs for seniors on Medicare to $2,000 a year and extends expiring subsidies that help 13 million people afford health insurance. By raising corporate taxes and reaping savings from the long-sought goal of allowing the government to negotiate drug prices for Medicare, the whole package is paid for, with some $300 billion extra revenue for deficit reduction.
Barely more than one-tenth the size of Biden’s initial 10-year, $3.5 trillion Build Back Better initiative, the new package abandons earlier proposals for universal preschool, paid family leave and expanded child care aid. That plan collapsed after conservative Sen. Joe. Manchin, D-W.Va., opposed it, saying it was too costly and would fuel inflation.
Nonpartisan analysts have said the 755-page “Inflation Reduction Act” would have a minor effect on surging consumer prices.
Republicans said the new measure would undermine an economy that policymakers are struggling to keep from plummeting into recession.
“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” Senate Minority Leader Mitch McConnell, R-Ky., argued.
In an ordeal imposed on most
budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of amendments. Each tested Democrats’ ability to hold together the compromise bill negotiated by Schumer, progressives, Manchin and Sen. Kyrsten Sinema, D-Ariz.
Republicans forced their own votes designed to make Democrats look soft on U.S.-Mexico border security and gasoline and energy costs, and like bullies for wanting to strengthen IRS tax law enforcement.
The Democrats’ pharmaceutical price language allows Medicare to negotiate what it pays for drugs for its 64 million elderly recipients, penalizing manufacturers for exceeding inflation for pharmaceuticals sold to Medicare and limiting beneficiaries out-of-pocket drug costs to $2,000 annually.
The bill also caps Medicare patients’ costs for insulin, the expensive diabetes medication, at $35 monthly. Democrats wanted to extend the $35 cap to private insurers
but ran afoul of Senate rules.
The package’s final costs 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 15% minimum tax on a handful of corporations with yearly profits above $1 billion, a 1% tax on companies that repurchase their own stock, bolstered IRS tax collections and government savings from lower drug costs.
Sinema forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates for their earnings. She also joined with other Western senators to win $4 billion to combat the region’s drought.
Several Democrats joined the GOP-led effort to exclude some firms from the new corporate minimum tax.
Still, the package keeps to Biden’s pledge not to raise taxes on those earning less than $400,000 a year.