Why it matters: The bill’s 51-50 passage, just three months before the midterm elections, is a huge victory for Democrats who have spent 18 months working to realize their longtime dreams of helping tackle climate change, to reduce the cost of prescription drugs and increase taxes on big corporations.
The “Inflation Reduction Act of 2022” is far less ambitious than most Democrats wanted — the original bill was about $3.5 trillion and also included paid family leave, funding for universal preschool age and the extension of the child tax credit. But the narrower version of the bill managed to get the support of two centrist members of the Senate who had previously stood in the way of the party — Sens. Joe Manchin (DW.Va.) and Kyrsten Sinema (D-Ariz.). The package now moves to the House, where members will vote as early as Friday to advance the bill to President Biden’s desk.
Details: The Senate returned to the Capitol on Saturday afternoon and began voting late Saturday night and Sunday on a series of amendments — part of a process known as a “vote-a-rama.”
Senate Republicans offered dozens of amendments aimed at trimming the bill, including removing funding for the Internal Revenue Service and eliminating school mandates related to COVID-19. Democrats held firm, with Harris’ help, to keep the core elements of the package and vote down every GOP amendment.
A major setback, however, was a ruling by a Senate congressman that ruled that a Democratic proposal to put a $35 cap on commercial insulin violated the “Byrd Rule,” which governs what can be passed into law. on fiscal agreement.
Democrats tried, and failed, to attach an amendment that included the insulin provision to the bill, but Republicans voted against it, eliminating it from the package. Seven GOP senators — Bill Cassidy (R-La.), Susan Collins (R-Maine), Josh Hawley (R-Mo.), Cindy Hyde-Smith (R-Miss.), John Kennedy (R-La.) , Lisa Murkowski (R-Alaska) and Dan Sullivan (R-Alaska) — voted with Democrats.
The bill includes:
$370 billion for climate change. Allows the federal health secretary to negotiate the prices of certain expensive drugs for Medicare. A three-year extension to health care subsidies in the Affordable Care Act. A minimum tax of 15% on companies with revenues of $1 billion or more. The provision brings in more than $300 billion in revenue. IRS tax enforcement. 1% excise tax on share purchases.
The importance of the climate portion: The bill is the largest investment in clean energy and emissions cuts the Senate has ever passed, with the climate portion totaling about $370 billion, Axios’ Andrew Freedman writes.
This includes tax incentives to build and buy electric vehicles, generate more wind and solar electricity, and support new technology such as direct air capture and hydrogen production. Independent analyzes show that the bill, combined with other ongoing emissions reductions, would reduce U.S. greenhouse gas emissions by up to 40% by 2030, short of the White House’s 50% reduction goal. However, if enacted into law, it would restore US credibility in international climate talks, which have flagged due in part to congressional gridlock.
As part of the Democratic concessions to Manchin, the bill also contains provisions calling for the sale of offshore oil leases in the Gulf of Mexico and off the coast of Alaska and a commitment to a separate measure to facilitate the licensing of new energy projects.
What they say: “Today, after more than a year of hard work, the Senate is making history. I am confident that the Inflation Reduction Act will stand as one of the defining legislative achievements of the 21st century,” said Senate Majority Leader Chuck Schumer (DN.Y.).
“Our bill reduces inflation, lowers costs, creates millions of good-paying jobs, and is the boldest climate package in U.S. history. This bill will usher in the era of affordable clean energy in America. It’s a game changer game, a turning point. And it’s been a long time coming.” “Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” said Senate Minority Leader Mitch McConnell (R-Ky.). President Biden praised the bill’s passage in a statement Sunday, saying, “Today, Senate Democrats stood with American families against special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and deficit reduction. Making the richest corporations finally pay their fair share. I ran for President promising to make government work for working families again, and that’s what this bill does — period.”