The estimated $740 billion package heads next door to the House, where lawmakers are poised to uphold Biden’s priorities, a stunning reversal of what seemed like a lost and doomed effort that has suddenly roared back into political life. Democrats held together, 51-50, with Vice Speaker Kamala Harris giving the tiebreaker. “It’s been a long, hard and difficult road, but we’re finally, finally here,” Senate Majority Leader Chuck Schumer, D-N.Y., 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 24-hour voting marathon that began Saturday and stretched late into Sunday afternoon. Democrats shot down about three dozen Republican amendments intended to torpedo the legislation. Facing unanimous GOP opposition, the 50-50 Democratic unity in the House was held, keeping the party on track for a morale-boosting victory three months before elections 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 quarantine. The House appeared likely to provide final congressional approval when it briefly returns from summer recess on Friday. The bill ran into problems at midday due to objections to the new 15% minimum corporate tax disliked by private equity firms and other industries, forcing last-minute changes. Despite the momentary setback, the “Lower Inflation Act” gives Democrats the campaign period to act on long-cherished goals. It includes the largest federal climate change effort — nearly $400 billion — caps Medicare drug costs for seniors at $2,000 a year and extends expiring subsidies that help 13 million people pay for health insurance. Raising corporate taxes pays for the whole package, with about $300 billion in additional revenue to reduce the deficit. Just more than a tenth of the size of Biden’s original $3.5 trillion 10-year rainbow with progressive ambitions in his Build Back Better initiative, the new package abandons previous proposals for universal preschool, paid family leave and extended child care assistance; That plan collapsed after conservative Sen. Joe. Manchin, DW.Va., opposed it, saying it was too costly and would fuel inflation. Nonpartisan analysts said the “Inflation Reduction Act” would have little effect on rising consumer prices. Republicans said the measure would undermine an economy that policymakers are struggling to keep from falling into recession. They said the bill’s business taxes would hurt job creation and push up prices, 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, R-Ky. He said the spending and tax increases in the legislation would eliminate jobs while having a negligible impact on inflation and climate change. In a test imposed on all budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of rapid-fire amendments. Each tested the ability of Democrats to hold together a compromise negotiated by Schumer, progressives, Manchin and uncharted centrist Sen. Kyrsten Sinema, D-Ariz. Progressive Sen. Bernie Sanders, I-Vt., offered amendments to further expand the health law’s benefits, and 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 gas and energy costs, and like bullies for wanting to strengthen IRS tax enforcement. Before debate began Saturday, the bill’s prescription drug price restrictions were watered down by nonpartisan Senate Rep. Elizabeth MacDonough, who is raising questions about the chamber’s procedures, said a provision that would impose costly penalties on drugmakers whose price increases for private insurers exceed inflation should fall. It was the bill’s main protection for the 180 million people with private health coverage they get through work or buy themselves. Under special procedures that would allow Democrats to pass their bill with a simple majority without the usual margin of 60 votes, its provisions must focus more on budget numbers in dollars and cents than on policy changes. But the thrust of their pharmaceutical price 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 pharmaceutical products sold to Medicare, and capping beneficiaries’ out-of-pocket drug costs at $2,000 a year. The bill also caps Medicare patients’ costs for insulin, the expensive diabetes drug, at $35 a month. Democrats wanted to extend the $35 cap to private insurers, but ran afoul of Senate rules. Most Republicans voted to remove it from the package, although in a sign of the political power of health care costs, seven GOP senators joined Democrats in trying to preserve it. The final cost of the measure was 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% minimum tax on a handful of companies with annual profits of more than $1 billion, a 1% tax on companies that buy back their own stock, boosted tax collections and government savings from lower drug costs. Sinema forced Democrats to abandon a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates on their profits. He also joined with other Western senators to win $4 billion to fight the region’s drought. Several Democratic senators have joined the GOP-led effort to exclude some companies from the new minimum corporate tax. The package honors Biden’s pledge not to raise taxes on those making less than $400,000 a year. On the energy and environment side, the compromise was most apparent between progressives and Manchin, a champion of fossil fuels and his state’s coal industry. Clean energy will be promoted with tax credits for the purchase of electric vehicles and the construction of solar panels and wind turbines. There would be home energy rebates, funds to build factories that make clean energy technology, and money to promote climate-friendly agricultural practices and reduce pollution in minority communities. Manchin won billions to help power plants reduce carbon emissions and language requiring more state auctions for oil drilling in federal waters. Party leaders have also promised to push separate legislation this fall to speed up permits for energy projects, which Manchin wants to include a nearly completed natural gas pipeline in his state.
