US Senate Democrats pass sweeping $740 billion economic package; Chamber to vote soon

WASHINGTON >> Democrats brought their election-year economic package to Senate approval today, a hard-fought compromise less ambitious than President Joe Biden’s original national vision but still delivering on the party’s deep-seated goals of curbing global warming , moderate pharmaceutical costs and tax huge corporations.

The estimated $740 billion package is headed next door to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround from what seemed like a lost and doomed effort suddenly back in political life. Cheers erupted as Senate Democrats stood united, 51-50, with Vice President Kamala Harris casting the tiebreaking vote after an all-night session.

“Today, Senate Democrats sided with America’s families for special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware. “I ran for president on a promise to put government back to work for working families, and that’s what this bill does, period.”

Biden, who had his share of long nights during his three decades as a senator, called into the Senate cloakroom during the speaker vote to personally thank the staff for their hard work.

The president urged the House to pass the bill as soon as possible. House Speaker Nancy Pelosi said her chamber would “move quickly to get this bill to the president’s desk.” House votes are expected on Friday.

“It’s been a long, hard and winding road, but we’re finally there,” Senate Majority Leader Chuck Schumer, DN.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 legislative feats of the 21st century,” he said.

Senators participated in a 24-hour voting marathon that began on Saturday and ran through Sunday afternoon. Democrats rejected some three dozen Republican amendments designed to torpedo the legislation. Facing unanimous Republican opposition, the 50-50 Democratic unity in the chamber held, keeping the party on track for a morale-boosting victory three months before the election when control of Congress is at stake.

The bill ran into trouble midday over objections to the new 15% corporate minimum tax that private equity firms and other industries didn’t like, forcing last-minute changes.

Despite the momentary setback, the “Inflation Reduction Act” provides Democrats with a campaign season showcase for action on coveted goals. It includes the largest federal effort ever on climate change (nearly $400 billion), caps out-of-pocket drug costs for seniors with Medicare at $2,000 a year, and extends expired subsidies that help 13 million people to pay for health insurance. By raising corporate taxes and gaining savings from the long-sought goal of letting the government negotiate drug prices for Medicare, the whole package is paid for, with an additional $300 billion in revenue for deficit reduction.

Just over a tenth the size of Biden’s initial 10-year, $3.5 trillion Build Back Better initiative, the new package abandons previous proposals for universal preschool, paid family leave and expanded child care aid. That plan collapsed after conservative Sen. Joe. Manchin, DW.Va., objected, saying it was too expensive and would fuel inflation.

Nonpartisan analysts have said the 755-page “Inflation Reduction Act” would have little effect on raising consumer prices.

Republicans said the new measure would undermine an economy that politicians are struggling to keep from sliding into recession. They said the bill’s business taxes would hurt job creation and push prices skyward, making it harder for people to cope with the country’s worst inflation since the 1980s.

“The 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, R-Kentucky.

In a test imposed on most budget bills like this, the Senate had to endure an overnight “vote-a-branch” of quick amendments. Each tested the Democrats’ ability to hold together the compromise bill brokered by Schumer, progressives, Manchin and inscrutable centrist Sen. Kyrsten Sinema, D-Arizona.

Progressive Sen. Bernie Sanders, I-Vt., criticized the bill’s shortcomings and offered amendments to further expand the legislation’s health benefits, but those efforts were defeated. Republicans forced their own votes designed to make Democrats look soft on US-Mexico border security and gas and power costs, and as bullies for wanting to strengthen IRS tax enforcement.

Before the debate began, the bill’s prescription drug price cuts were watered down by the nonpartisan Senate MP who said a provision that would impose costly penalties on drugmakers whose price increases for insurers should be removed. private exceed inflation.

It was the bill’s main protection for the 180 million people with private health coverage they get through work or buy themselves. 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 figures than policy changes.

But the thrust of the Democrats’ pharmaceutical pricing language remained. That included allowing Medicare to negotiate what it pays for drugs for its 64 million elderly beneficiaries, penalizing manufacturers for overinflating pharmaceuticals sold to Medicare and capping beneficiaries’ out-of-pocket drug costs at $2,000 a year.

The bill also caps Medicare patients’ costs for insulin, the expensive diabetes drug, at $35 a month. Democrats wanted to extend the $35 cap on private insurers, but it went against Senate rules. Most Republicans voted to remove it from the package, though in a sign of the political potency of health costs, seven Republican senators have joined Democrats in trying to preserve it.

The final costs of the measure were being recalculated to reflect the latest changes, but overall it would raise more than $700 billion over a decade. The money would come from a minimum 15% tax on a handful of corporations with annual profits greater than $1 billion, a 1% tax on companies that buy back their own stock, beefed-up tax levies from the IRS and government cost savings. lower medication.

Sinema forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates on their profits. He also joined other Western senators in winning $4 billion to combat drought in the region.

Several Democratic senators joined the GOP-led effort to exclude some businesses from the new corporate minimum tax.

The package delivers on Biden’s promise not to raise taxes on those making less than $400,000 a year.

It was on the energy and environmental side that the compromise was most evident between progressives and Manchin, a champion of his state’s fossil fuels and coal industry.

Clean energy would be promoted with tax credits for the purchase of electric vehicles and the manufacture of solar panels and wind turbines. There would be home energy rebates, 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 reduce carbon emissions, in addition to language requiring more government auctions for oil drilling on federal lands and waters. Party leaders have also promised to push through separate legislation this fall to speed up permitting for energy projects, which Manchin wants to include a near-completed natural gas pipeline in his state.

Still, environmental groups hailed the step as a milestone. “Tremendous progress,” Manish Bapna, president and CEO of the Natural Resources Defense Council, said in a statement.

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