Democrats pushed their election-year economic package through the Senate, a hard-fought compromise less ambitious than President Joe Biden’s original vision — but one that still fulfills the party’s entrenched goals of slowing climate change, moderating pharmaceutical costs and large corporate taxes.
The package on Sunday moves closer to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround of what seemed like a doomed and doomed effort that has suddenly returned to political life. Democrats held together, 51-50, with Vice President Kamala Harris casting the tie-breaking vote.
“It’s been a long, hard and winding road, but we finally, finally got there,” Senate Majority Leader Chuck Schumer said before the final votes.
“The Senate is making history. I am confident that the Inflation Reduction Act will stand as one of the defining pieces of legislation of the 21st century.”
Senators engaged in a round-the-clock voting marathon that began Saturday and stretched into late Sunday. Democrats opposed about three dozen Republican amendments designed to torpedo the legislation.
Facing unanimous opposition, Democratic unity was maintained in the 50-50 chamber, keeping the party on track for a moral victory three months after the election, when control of Congress is at stake.
“I think it will pass,” Biden told reporters as he left the White House early Sunday to head to Rehoboth Beach, Delaware, ending his COVID-19 isolation.
The House of Representatives looks set to secure final approval from Congress when it returns briefly from the US summer recess on Friday.
The bill ran into trouble at midday over opposition to the new 15 percent minimum corporate tax that private equity firms and other industries disliked, forcing last-minute changes.
Despite the current setback, the Inflation Reduction Act gives Democrats a campaign-season showcase for action on the coveted goals.
It includes the largest federal climate change effort ever — roughly $400 billion — caps out-of-pocket drug costs for Medicare seniors at $2,000 a year and extends expiring subsidies that help 13 million people afford health insurance. By raising corporate taxes, the entire package pays for about $300 billion in additional deficit-reduction revenue.
Barely more than a tenth the size of Biden’s initial $3.5 trillion 10-year progressive aspirations in his Build Back Better initiative, the new package abandons earlier proposals for universal preschool, paid family leave and assistance extended childcare. That plan was shot down after conservative Senator Joe Manchin, a Democrat, opposed it, saying it was too costly and would fuel inflation.
Nonpartisan analysts have said the Inflation Reduction Act would have little effect on rising consumer prices.
Republicans said the move would undermine an economy that policymakers are trying to keep from slipping into recession. They said the bill’s business taxes would hurt job creation and drive prices skyward, making it harder for people to cope with the nation’s worst inflation since the 1980s.
“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.
He said the spending and tax hikes in the legislation would eliminate jobs while having a negligible effect on inflation and climate change.
In an ordeal imposed on all budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of quick amendments. Each tested Democrats’ ability to hold together a compromise negotiated by Schumer, progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, a Democrat.
The movie forced Democrats to abandon a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates on their earnings.
Progressive Sen. Bernie Sanders offered amendments to further expand the legislation’s health benefits, but those efforts were defeated. Most of the votes were forced by Republicans, and many were designed to make Democrats look soft on US-Mexico border security and gasoline and energy costs, and as bullies to strengthen IRS tax law enforcement.
The power of pharmaceutical pricing language remained. That included allowing 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 capping beneficiaries’ out-of-pocket drug costs at $2,000 a year.
The measure’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 percent minimum tax on a handful of corporations with annual profits above $1 billion, a 1 percent tax on companies that buy back their stock, strengthened tax collection by the IRS and savings of government from lower drug costs.