Senate Democrats will vote to approve the landmark health and climate legislation, with a House vote expected this week.

WASHINGTON – The Senate has passed a historic tax, climate and health care bill, speeding a consolidated version of President Joe Biden’s domestic agenda on its way to becoming law after a year of Democratic wrangling that the White House could not control.

The vote on the bill was 51 Democrats to 50 Republicans against, with Vice President Kamala Harris casting the tie-breaking vote after an overnight marathon vote on the amendment. It now goes to the House, where a Democratic majority is expected to pass on Friday.

“I am confident that the Detente Act will be one of the most important tasks of the 21st century,” Majority Leader Chuck Schumer said before the vote.

Democrats called the bill the single largest investment in climate change in the US, and it was predicted to help reduce greenhouse gas emissions by 40% from 2005 levels by the end of the decade. They hugged and clapped loudly for the last time.

The law aims to prevent large corporations from using small tax breaks to pay any taxes and allows Medicare to negotiate drug prices for the first time. It is forecast to significantly reduce budget deficits for the first time in more than 10 years.

Republicans are united in opposition, arguing that it would not end historic inflation and impose tariffs that could bring the US economy into recession.

Senate GOP leader Mitch McConnell has argued that “tax increases during a recession will kill hundreds of billions of dollars of jobs.”

The Senate vote was the culmination of a year-and-a-half of partisan bickering among Democrats over the scope of the bill, which Biden once hoped would be a Franklin Delano Roosevelt New Deal too broad for his rival. In the end, it came down to two moderate Democrats, Senators Joe Manchin and Kirsten Sinema, whose votes mattered in the 50-50 Senate and were on both big tax increases and more spending. Biden initially discussed it with Manchin and Sinema, but the deal that revived the bill fell apart on Capitol Hill.

The legislation was passed through reconciliation, a Senate procedure that exempts certain tax and spending measures from filibustering and requires only a simple majority to pass.

If the bill is cut from its initial cost of $6 trillion to $437 billion, it would be a cornerstone success for Biden’s first term and one he will want to campaign for in the November midterms, when Democrats are fighting for control of Congress.

Highlights of the Act:-

• Medicare is allowed to negotiate drug prices, starting with the 10 highest-priced drugs in the middle of this decade and expanding from there. For seniors enrolled in Part D, $2,000 a year covers out-of-pocket drug costs. The Senate spared any punishment for drug makers raising prices on the commercial market. The savings for Medicare will be used to pay three years of subsidized Obamacare premiums.
• The bill authorizes approximately $374 billion in climate and energy spending, such as tax credits, for renewable energy projects. A $7,500 tax credit for electric vehicle purchases would end the manufacturer’s cap, a boost for electric vehicles from the likes of Tesla Inc. Battery supply chain. Some automakers, such as Ford Motors and General Motors Co., were advised to make changes to the credit.
• Government revenue is raised from a 15% corporate minimum tax on large companies, a 1% excise tax on stock purchase prices and an $80 billion Internal Revenue Service enforcement incentive.
• The lower corporate tax will affect fewer than 150 companies in a given year. Tech companies like Alphabet Inc.’s Google and Meta Inc.’s Facebook could be taxed. Last-minute changes have narrowed the scope in an effort to protect private equity and businesses that invest heavily in equipment and facilities, such as manufacturers.
• The tax has largely been dismissed by Wall Street analysts, though some have suggested it could prompt corporations to buy back shares at a juicy equity price. Apple Inc., JPMorgan Chase & Co., and Microsoft Corp. have all relied on share buybacks as a strategy to increase stock prices in recent years.

The tax increase is of interest to the untouchable. Democrats and Biden raced to undo former President Donald Trump’s 2017 tax cuts, including the corporate rate, which remained untouched. High earners, including millionaires and billionaires, are not subject to higher taxes.

Sinema has asked for the bill to retain the interest tax relief it carries for private equity. That request angered many of her fellow Democrats, who say there is no good reason to give tax breaks to high-paid investment managers.

The bill misses two key issues for many Democrats: implementing the 15% global minimum tax treaty that Treasury Secretary Janet Yellen negotiated last year with nearly 140 countries, and adding a $10,000 cap on the state and local tax deduction, or SALT. With Democrats likely to lose their majority in at least one chamber of Congress next year, it’s unclear whether any of the proposals will pass.

Still, Democrats indicated they were satisfied with the results. Schmer said the party has spent years talking about lowering drug prices and curbing climate change.

“This is America’s first real push to tackle the climate crisis. This is the first time we’ve opened the door to Medicare negotiating with prescription drug companies,” Massachusetts Democrat Elizabeth Warren said after the vote. “And this is the first time we’ve said billion-dollar-plus corporations should pay lower taxes. All three are historic.”