The package is the product of painstaking negotiations and will give Democrats a chance to achieve key policy goals ahead of the upcoming midterm elections. Senate Democrats are using a special process to pass the package without Republican votes.
Once the legislation passes the Senate, it will need to be approved by the House of Representatives before President Joe Biden can sign it into law.
The Senate is expected to take its first procedural vote to proceed with the bill sometime Saturday. A simple majority is required for the motion to proceed.
A vote has not yet been scheduled, but Senate Majority Leader Chuck Schumer said Saturday shortly after noon ET that “in a few hours” the chamber will “formally begin the process of passing the Inflation Reduction Act.”
Democrats control the narrowest possible majority and only 50 seats in the Senate, but are expected to be united in advancing the bill to the initial procedural vote.
However, in order for a bill to pass through the reconciliation process, the package must comply with a strict set of budget rules.
Senate lawmakers must decide whether provisions in the bill meet the rules to allow Democrats to use the impromptu budget process to pass legislation along party lines.
Schumer announced Saturday that after undergoing parliamentary scrutiny, the bill “remains largely intact.”
“The bill, when passed, will accomplish all of our goals: fighting climate change, lowering health care costs, closing tax loopholes abused by the wealthy and reducing the deficit,” the New York Democrat said.
In a key decision, Rep. Elizabeth MacDonough allowed a key component of Democrats’ prescription drug pricing plans to move forward — giving Medicare the power to negotiate the prices of some prescription drugs for the first time.
But MacDonough narrowed another provision aimed at lowering drug prices — imposing fines on drug companies if they raise their prices faster than inflation. Democrats had called for the measure to apply to both Medicare and the private insurance market. But the lawmaker ruled that the inflation cap could only apply to Medicare, a Democratic aide said.
Democrats are awaiting new cost estimates from the nonpartisan Congressional Budget Office to see how the decision affects their deficit projections. It is likely that the limited supply of drugs will somewhat limit the reduction of the package deficit.
Meanwhile, MacDonough decided to leave intact several climate measures from the Environment and Public Works Committee in the reconciliation bill, including a methane tax that would apply to oil and gas producers who leak the powerful greenhouse gas methane over a certain threshold.
Earlier Saturday, Senate Finance Chairman Ron Wyden of Oregon announced that the clean energy tax portion of the bill “adheres to Senate rules and important provisions to ensure our clean energy future is is built in America have been approved by parliament”.
What happens after the bill faces its first major vote
If the first procedural vote to proceed with the bill gets the support of all 50 members of the Democratic caucus, which is expected, then there will be up to 20 hours of debate split evenly between the two parties, although some of that time can be returned to speed up the process.
It’s not yet clear how much of the allotted debate time each side will use, but some Republicans are signaling they won’t try to use all of it. And Democrats are expected to give some of their time.
Asked if he plans to use much debate time, which could delay the bill’s final passage in the Senate, GOP Sen. Rand Paul of Kentucky said, “Probably not.”
Another Republican senator, Ron Johnson of Wisconsin, said Saturday that he would not have Senate clerks read the full bill, as any senator could require under the rules. Johnson forced a reading of the US Rescue Plan legislation during the budget process last year, which delayed a vote on the bill.
Republicans will be able to use the vote-a-rama to put Democrats on the spot and force politically difficult votes. The process usually extends through the night and into the early hours of the next morning.
Senators widely expect Republicans to try to kill the insulin provisions included in Democrats’ climate and health care bills on the Senate floor during the a-rama vote, which will also force the Senate’s lawmaker in real time to decide whether is in order to stay. on the bill.
These provisions would cap insulin prices at $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the lawmaker ruled that the insulin cap on the private insurance market was inconsistent with the accord. Democrats were not surprised by her decision on the private market cap, but hope the Medicare insulin cap stays in, according to the aide.
But either way, the aide said, Democrats will keep both insulin provisions in the bill as they move forward — emboldening the GOP to move and try to strike them down on the Senate floor.
It is not yet clear when the voting-a-rama will begin, but it could begin as early as Saturday evening. If that happens, a final vote could take place in the early hours of Sunday morning.
Sen. Patrick Leahy, a Vermont Democrat who has been recovering from hip surgery, returned to the Senate on Saturday. His return is a must for Democrats as they need the votes of all 50 members of their conference to move forward with the bill.
Senator John Cornyn, a Republican from Texas, has also returned to the Senate after being absent last week after testing positive for Covid-19.
The House of Representatives is set to return to take up the legislation on Friday, August 12, according to House Majority Leader Steny Hoyer’s office.
How the bill addresses the climate crisis
For a party that failed to pass major climate legislation more than 10 years ago, the reconciliation bill represents a major and long-fought victory for Democrats.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history and the biggest win for the environmental movement since the historic Clean Air Act. It also comes at a critical time; This summer has seen punishing heatwaves and deadly floods across the country, both of which scientists say are linked to a warming planet.
Analysis by Schumer’s office — as well as multiple independent analyzes — suggest the measures would reduce U.S. carbon emissions by up to 40% by 2030. Stronger climate regulations from the Biden administration and action by states would were needed to achieve Biden’s goal. reducing emissions by 50% by 2030.
The bill also contains many tax incentives intended to lower the cost of electricity with more renewable sources and encourage more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is also just the beginning of what is needed to combat the climate crisis.
“This is not about the laws of politics, it’s about the laws of physics,” Democratic Sen. Brian Schatz of Hawaii told CNN. “We all knew going into this effort that we had to do what the science tells us what to do.”
Major health care and tax policy in the bill
The bill would empower Medicare to negotiate the prices of some costly drugs administered in doctors’ offices or purchased at pharmacies. The Secretary of Health and Human Services would negotiate the prices of 10 drugs in 2026 and another 15 drugs in 2027 and again in 2028. The number will increase to 20 drugs per year for 2029 and beyond.
This controversial provision is much more limited than what House Democratic leaders have supported in the past. But it would open the door to fulfilling a longtime goal of the party to allow Medicare to use its weight to lower drug costs.
Democrats are also planning to extend extended federal premium subsidies for Obamacare coverage until 2025, a year later than lawmakers recently discussed. That way they would not expire until after the 2024 presidential election.
To raise revenue, the bill would impose a minimum tax of 15% on income reported by shareholders of large corporations, known as book income, to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits above $1 billion.
Concerned about how the provision would affect some businesses, particularly manufacturers, Sinema has suggested she won changes to the Democrats’ plan to reduce how companies can deduct depreciable assets from their taxes. Details remain unclear.
However, Sinema rejected her party’s efforts to tighten the carried interest loophole, which allows investment managers to treat most of their compensation as capital gains and pay a long-term capital gains tax rate of 20% instead of income tax rates of up to 37%.
The provision would have extended the amount of time investment managers’ profit interest must be held from three years to five years to take advantage of the lower tax rate. Addressing the gap, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.
In its place, a 1% excise tax on corporate stock purchases was added, raising another $74 billion, according to a Democratic aide.
This story has been updated with additional developments.
CNN’s Jessica Dean, Manu Raju, Ella Nilsen, Tami Luhby, Katie Lobosco and Melanie Zanona contributed to this report.