Dems appear headed for climate, health care wins
‘Inflation Reduction Act’ may do so, but there are dissenters
WASHINGTON — It’s been more than a year in the making and has seen plenty of ups and downs. Now, a Democratic economic package focused on climate and health care faces hurdles but seems headed toward partyline passage by Congress next month.
Approval would let President Joe Biden and his party claim a triumph on top priorities as November’s elections approach. They have not forgotten that they came close to approving a far grander version of the bill last year, only to see Sen. Joe Manchin, D-W.Va., one of their most conservative and contrarian members, torpedo it at the eleventh hour.
This time, Senate Majority Leader Chuck Schumer, D-N.Y., has crafted a compromise package with Manchin, to the surprise of everyone, transforming the West Virginian from pariah to partner.
The 725-page measure is more modest than earlier versions but still checks boxes on issues that make Democrats giddy.
Here’s what they face:
The measure: It would raise $739 billion in revenue over 10 years and spend $433 billion. More than $300 billion would be left for trimming federal deficits.
Those are meaningful cuts in red ink. But they’re tiny compared with the $16 trillion in new debt the nonpartisan Congressional Budget Office estimates will accumulate over the next decade.
The package would save consumers and the government money by curbing prescription drug prices, and it would subsidize private health insurance for millions of people. It would bolster the IRS budget so the tax agency can collect more unpaid taxes.
The plan would foster clean energy and offshore energy drilling, a balance demanded by Manchin, a champion of fossil fuels. It also would collect new taxes from the largest corporations and wealthy hedge fund owners.
New name: It’’s now called the “Inflation Reduction Act,” but will it do that? It certainly could, but there are dissenters.
By one inflation measure the Federal Reserve studies closely, prices jumped 6.8% in June from a year ago, the biggest increase in four decades. That followed government figures showing the economy shrank anew last quarter, fueling recession worries.
“Improved tax collection, drug savings, and deficit reduction would put downward pressure on inflation,” the Committee for a Responsible Federal Budget said Friday. In what passes for a rave review, the bipartisan fiscal watchdog group called the legislation “exactly the kind of package lawmakers should put in place to help the economy in a number of ways.”
“Deficit reduction is almost always inflation-reducing,” Jason Furman, a Harvard University economics professor who was a top economic adviser to President Barack Obama, wrote Friday in The Wall Street Journal. He said the measure would also “reduce inflation by slowing the growth of prescription-drug prices.”
A more sobering assessment came from the University of Pennsylvania’s Penn Wharton Budget Model, which analyzes economic issues.
“The act would very slightly increase inflation until 2024 and decrease inflation thereafter,” the group wrote Friday. “These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation.”
A chorus of Republicans say the Democrats’ bill would be damaging. Senate Minority Leader Mitch McConnell, R-Ky., calls it “a giant package of huge new job-killing tax hikes, Green New Deal craziness that will kill American energy, and prescription drug socialism that will leave us with fewer new life-saving medicines.”
Prospects: Every Republican seems poised to vote “no.”
Democrats will need all 50 of their own votes in the Senate, where Sen. Kyrsten Sinema, D-Ariz., has yet to state her view.
Democrats can lose no more than four House votes to succeed there. Speaker Nancy Pelosi, D-Calif., said Friday that when the Senate approves the package, “We’ll pass it.”
Schumer wants Senate passage this week. He acknowledged that timeline is “going to be hard” because it will take time for the chamber’s parliamentarian to make sure the bill conforms to Senate rules.
All 50 Democrats, including both independents who support them, will have to show up and vote. That’s not guaranteed.
The latest COVID-19 variant is spreading around the country. The chamber has 33 senators who are 70 years old or more, including 19 Democrats.