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Democrats pushed their election-year economic package through the Senate, a less ambitious deal than President Joe Biden’s original vision — but still meeting goals of reducing chronic climate change, controlling drug costs and taxing big corporations.
Sunday’s pack leads near the House, where lawmakers are poised to present Biden’s priorities, a dramatic turnaround that has suddenly brought something that seemed lost and broken back into political life. Democrats were tied 51-50, with Vice President Kamala Harris casting the tying vote.
“It’s been a long, hard and winding road, but finally, we’re finally here,” Senate Majority Leader Chuck Schumer said before the final vote.
“The Senate is making history. I am confident that the Inflation Reduction Act will remain one of the most important legislative measures of the 21st century.
The Senators participated in a full-time marathon that began Saturday and lasted until late Sunday. Democrats rejected nearly three dozen Republican amendments designed to repeal the law.
In the face of unanimous opposition, a 50-50 Democratic coalition in the House kept the party on track for a morally-deprived victory for three months when control of Congress was at stake.
“I think it will pass,” Biden told reporters early Sunday as he left the White House to head to Rehoboth Beach, Delaware, where he will end his COVID-19 isolation.
The House looks set to give its final congressional approval on Friday when it briefly returns from the US summer recess.
The bill forced last-minute changes at midday due to opposition to the 15 percent corporate minimum tax, which private equity firms and other industries don’t like.
Despite the temporary setbacks, the inflation-reduction legislation gives Democrats a campaign-season showpiece to take action on ambitious goals.
It includes the largest federal effort on climate change – nearly $400bn – covers Medicare out-of-pocket drug costs for seniors by $2,000 a year and extends outdated subsidies that help 13 million people buy health insurance. The overall package will pay for $300 billion in additional revenue for deficit reduction by raising corporate taxes.
More than one-tenth of Biden’s first 10-year, $3.5 trillion growth ambitions rainbow under the Build Back Better initiative, the new package leaves behind previous support for universal preschool, paid family leave and expanded child care assistance. That plan collapsed after conservative Sen. Joe Manchin opposed it, saying it was too expensive and would lead to inflation.
Non-partisan analysts said the anti-inflation bill would have a modest impact on consumer prices.
Republicans said the move would hurt an economy that policymakers are struggling to prevent from falling into recession. He said the bill’s business tax would hurt job creation and force up prices to combat the nation’s worst inflation since the 1980s.
“Democrats have already robbed American families with inflation, and now their solution is to rob American families a second time,” argued Republican Senate Minority Leader Mitch McConnell.
He said the bill’s spending and tax increases will kill jobs and have a significant impact on inflation and climate change.
With all the misery thrown at such budget bills, the Senate had to endure a “vote-a-rama” of overnight rapid-fire amendments. Each has tested the ability of Democrats to hold together a deal negotiated by Schumer, progressives, Manchin and the undisputed centrist Sen. Kirsten Sinema, a Democrat.
Cinema has forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying below individual income tax rates on their income.
Progressive Sen. Bernie Sanders proposed amendments to further expand the health benefits of the law, but the efforts were defeated. Most of the vote was forced by Republicans, and many were intended to bully Democrats into looking soft on U.S.-Mexico border security and gasoline and energy spending, and to strengthen IRS tax enforcement.
The language of drug pricing remains pressing. These include allowing Medicare to negotiate what it pays for drugs for 64 million elderly beneficiaries, penalizing manufacturers for price inflation on drugs 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 ten years. The money comes from a 15 percent lower tax on a handful of corporations with profits over $1 billion, a 1 percent tax on companies buying back their own stock, IRS tax collections and government savings from lower drug costs.
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