WASHINGTON — Senate Democrats narrowly passed a sweeping climate and economic package on Sunday, putting President Joe Biden and his party on the cusp of a big legislative victory just three months before November’s crucial midterm elections. .
After a marathon overnight session in the Senate, the 51-50 vote was strictly to party lines, with all Republicans voting no and all Democrats voting yes. After Vice President Kamala Harris cast the deciding vote, Democrats stood and clapped.
The legislation, dubbed the Cut Inflation Act, is now heading to the House, which plans to return from its summer recess on Friday, pass the legislation and send it to Biden’s office for signing. .
“It’s been a long, hard and winding road, but we’ve finally arrived. I know it’s been a long day and a long night. But we made it today,” the Majority Leader told the Senate, Chuck Schumer. the final vote.
“After more than a year of hard work, the Senate is making history. I am confident that the Curbing Inflation Act will remain one of the defining legislative feats of the 21st century.”
The 755-page bill includes $430 billion to fight climate change and expand health care coverage, paid for with savings on prescription drugs and corporate taxes. It is spending hundreds of billions of dollars on deficit reduction.
- The bulk of the spending – more than $300 billion – is investment to fight climate change and boost clean energy, including incentives for farmers and ranchers to reduce methane emissions; an extension of the electric vehicle tax credit; and the launch of a national climate bank that would invest in clean energy technologies and energy efficiency.
- The legislation would allow Medicare to negotiate prices with drug companies for the first time, reducing prescription drug prices for seniors. The savings would help pay for a three-year extension of Affordable Care Act subsidies, which would avoid an expected increase in insurance premiums that was due to take effect in 2023.
- The package includes a cap on the price of insulin for seniors under Medicare, but Republicans successfully removed a $35 cap on private market insulin.
- The bill also boosts revenue through a new 15% minimum tax on large businesses, though accelerated depreciation is exempt — a key demand from centrist Sen. Kyrsten Sinema, D-Arizona, who won several tax changes from leaders before committing to the package.
- Sinema also successfully removed a provision to close the deferred interest tax loophole that benefits private equity and hedge fund managers. It was replaced, with the support of Sinema, by a 1% excise tax on share redemptions which actually generates more revenue than the carried interest provision.
Legislation quickly materialized. Less than two weeks ago, Senate Majority Leader Chuck Schumer and Sen. Joe Manchin, DW.V., announced a surprise deal on some of the major items on the party’s agenda that, according to many Democrats, had no chance of becoming law this year.
Democrats see the sprawling package as the latest in an unusual string of legislative victories for a Congress typically mired in partisan gridlock. There was a $1 trillion infrastructure package last year, the most significant gun reform legislation in a generation, a major semiconductor and science competitiveness package, a bill to help veterans exposed to burns and a vote to admit Finland and Sweden into NATO amid a confrontation with Russia.
“Mitch McConnell and the Republicans stand with Big Oil, stand with Big Pharma to protect their profits, and we’ve been trying for years” to cut costs, said Sen. Debbie Stabenow, D-Mich., leader of the Democratic Policy Committee, told NBC News.
“This is the big moment here with these forces,” she said, “and the people are going to win.”
Sen. Cory Booker, DN.J., a progressive and one-time Biden 2020 presidential rival, also noted recent progress in Congress.
“I don’t know if there’s been a Congress and a president that has been as productive as we’ve seen in this Congress,” he said in an interview. “This President continues to introduce historic bills that address the urgent needs of the American public.”
Sen. Gary Peters, D-Mich., the Senate Democrats’ campaign leader this cycle, said the reconciliation package makes his job easier as he tries to protect incumbents and grow his party’s fragile majority.
“Lowering drug prices, lowering the cost of health insurance for millions of Americans, fighting climate change are hugely motivating to our base, especially young voters,” Peters said.
There was little Republicans could do to stop the massive spending program. They couldn’t filibuster since Democrats use the special budget reconciliation process that allows them to pass a bill by a simple majority — without needing the support of a single Republican.
But Republicans have found ways to make things painful. During “vote-a-rama” — a process where senators can propose virtually unlimited amendments — Republicans late Saturday night and into Sunday morning forced vulnerable Democrats to vote hard after vote hard on politically sensitive issues.
Sen. John Barrasso, R-Wyo., proposed an amendment aimed at lowering gas prices by boosting domestic power generation, while Sen. James Lankford, R-Okla., proposed one that would provide funding supplement for implementing Title 42, the controversial public health rule that blocked asylum seekers attempting to cross the border. But Democrats stuck together and defeated nearly all of the GOP amendments.
The package faced turbulence towards the end of the vote-a-rama. Sinema and six other centrist Democrats helped pass a Republican amendment that would exempt certain subsidiaries owned by private equity firms from the new minimum corporate tax. The amendment could have created a major problem in the House since it was paid for by extending the cap on state and local tax deductions (SALT) – which Democrats in the Northeast opposed.
But Democrats came up with a creative solution: Sen. Mark Warner, D-Va., offered a replacement amendment, replacing the SALT payment with a two-year loss-limiting extension that held together the shaky Democratic coalition.
In floor speeches and hallway talks, Republicans argued that the name of the bill was misleading and would do little to bring down record inflation under Biden.
Senate Minority Leader Mitch McConnell called it “yet another reckless taxing and spending spree.” And Senate Minority Whip John Thune, R.S.D., called it “the Democrats’ bag of bad ideas.” Others said the hundreds of billions in corporate tax hikes would push the country into a recession.
“I think we are in the early stages of stagflation. And the worst thing you can do at the onset of stagflation is to slow the economy even further, which … new taxes will do,” said Sen. John Kennedy, R-La.
“If they want to celebrate a wasteful, job-destroying, wasteful tax bill at a time when inflation is high, I think their celebration is out of place,” said Sen. Cynthia Lummis, R-Wyo., Adding that she was “disappointed” by her fellow moderate Democrats while acknowledging that Americans are struggling with high prices for gas, groceries and travel.
Some criticism has also come from the Democrats’ own caucus. Sen. Bernie Sanders, I-Vt., the progressive icon who caucus with Democrats, tore the package for not going far enough. Unlike Biden’s original Build Back Better package, the cut-back inflation bill had no child tax credits, universal early education, free community college or Medicare expansion.
“No one can deny that this legislation does not address the major crises facing working families,” Sanders told reporters. “This bill has nothing to do with the housing crisis, the child care crisis, the higher education crisis, the crisis of millions of Americans. Older Americans have no teeth in the mouth because we didn’t expand Medicare.”