Just three months before the important November midterm elections, Senate Democrats narrowly passed a comprehensive climate and economic package on Sunday, placing President Joe Biden and his party on the verge of a significant legislative victory. The 51–50 vote, which came after a lengthy midnight Senate session, was entirely partisan, with all Republicans voting no and all Democrats voting yes. Democrats stood and cheered when Vice President Kamala Harris made the deciding vote.
The Inflation Reduction Act will now be considered by the House, which will reconvene on Friday after its summer break, pass it, and then deliver it to Vice President Biden for his signature. “We’ve travelled a long, difficult, and winding route, but we’ve finally made it. I am aware that it has been a long day and night. However, we completed it today “Before the vote, Senate Majority Leader Chuck Schumer made a statement on the Senate floor.
“The Senate is creating history after working really hard for more than a year. The Inflation Reduction Act, in my opinion, will remain one of the essential pieces of legislation in the twenty-first century.” The 755-page law includes $430 billion in funding for climate change mitigation and healthcare expansion, which will be paid for by savings on prescription medications and corporate taxes. It allocates hundreds of billions of dollars to cutting the deficit.
Incentives for farmers and ranchers to cut methane emissions, an extension of the electric vehicle tax credit, and the establishment of a National Climate Bank, which would invest in clean energy technology and energy efficiency, make up the majority of the spending, or more than $300 billion. The law would grant Medicare the authority to bargain prices with pharmaceutical corporations for the first time, lowering the cost of prescription medications for those 65 and older.
The money saved would be used to finance a three-year extension of Affordable Care Act subsidies, delaying the anticipated increase in insurance prices that was scheduled to take effect in 2023. Republicans were able to eliminate a $35 cap for insulin in the private market, but the package still maintains a cap on the cost of insulin for Medicare beneficiaries 65 and older.
However, accelerated depreciation would be exempt from the new 15 percent minimum tax on major corporations, which was a key demand of moderate Sen. Kyrsten Sinema, D-Ariz., who demanded various tax adjustments from leadership before supporting the deal. Additionally, Sinema was successful in blocking a proposal to abolish the carried interest tax break that favours managers of hedge funds and private equity firms. With Sinema’s backing, it was replaced with a 1% excise tax on stock buybacks, which actually generates more income than the carried interest provision did.
The legislation was immediately put together. Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York recently revealed an unexpected agreement on several of the party’s top legislative priorities, which many Democrats thought had no chance of passing this year.
The expansive package is only the most recent in what Democrats see as an unprecedented run of legislative victories in a Congress that is often mired in party gridlock. Last year, there was a $1 trillion infrastructure package, the largest gun control legislation in a generation, significant semiconductor and science competitiveness legislation, a bill to assist veterans exposed to burn pits, and a vote to admit Finland and Sweden into NATO amid a standoff with Russia.
Sen. Debbie Stabenow, D-Mich., chair of the Democratic Policy Committee, told NBC News that “Mitch McConnell and Republicans have been standing with Big Oil and standing with Big Pharma to protect their profits, and we have been fighting for years” to cut costs. She declared, “This is the crucial moment with these forces, and the people will triumph.” Progressive senator and former Biden opponent for president in 2020, Sen. Cory Booker of New Jersey, also praised the recent accomplishments made by Congress.
In an interview, he added, “I don’t know whether there has ever been a Congress and president that has been as productive as we’ve seen in this Congress. “This president keeps introducing historic legislation that addresses the needs of the American people.” Sen. Gary Peters, D-Mich., the leader of the Senate Democrats’ electoral effort this cycle, claimed that the reconciliation deal facilitates his efforts to defend incumbents and expand his party’s precarious majority.
“Our base, especially young people, is greatly motivated by decreasing medicine prices, reducing the cost of health insurance for millions of Americans, and dealing with climate change,” Peters added. Republicans have little power to stop the large spending plan. Since Democrats are using the unique budget reconciliation procedure, which enables them to pass a bill with a simple majority — without having support from a single Republican — they couldn’t filibuster it.
However, Republicans managed to make things difficult. Republicans forced vulnerable Democrats to take difficult votes after difficult votes on politically contentious matters during the “vote-a-rama,” a procedure in which senators can submit nearly endless amendments.
Sen. James Lankford, R-Oklahoma, proposed an amendment to provide additional funding for the implementation of Title 42, the contentious public health rule that prevented asylum seekers from attempting to cross the border, while Sen. John Barrasso, R-Wyo., proposed an amendment to reduce gas prices by increasing domestic energy production. But Democrats maintained their unity and overwhelmingly rejected all GOP amendments.
As the vote-a-rama came to a close, the package encountered trouble. A Republican proposal that would exempt some subsidiaries owned by private equity firms from the new corporate minimum tax was passed with the assistance of Sinema and six other centrist Democrats. Since the proposal was paid for by raising the maximum on state-and-local tax (SALT) deductions, something many northeastern Democrats opposed, the amendment may have caused significant issues in the House.
Sen. Mark Warner, D-Va., submitted a substitute amendment that would have replaced the SALT pay-for with a two-year extension of the loss limits, which helped to maintain the unity of the party’s shaky coalition. Republicans argued that the bill’s name was deceptive and that it would do little to reduce record inflation under Biden in floor speeches and hallway interviews.
Mitch McConnell, the Republican minority leader in the Senate, blasted it as “yet another reckless taxing and spending spree.” John Thune, the Republican minority whip in the Senate, referred to it as “Democrats’ grab bag of terrible ideas.” Others said that the country will enter a recession as a result of the hundreds of billions in corporate tax increases.
“I believe that stagflation is just beginning. Furthermore, adding new taxes will only serve to further down the economy in the early stages of stagflation, according to Sen. John Kennedy, R-Louisiana. Sen. Cynthia Lummis, R-Wyo., said, “If they want to celebrate a tax-and-spend, jobs-killing, wasteful bill at a time when inflation is high, I think their celebration is misplaced.” She also said she was “disappointed” her moderate Democratic colleagues joined in while acknowledging that Americans are struggling with high gas, grocery, and travel prices.
Even several Democrats in the Democratic caucus voiced displeasure. The progressive icon and Democrat caucus member Sen. Bernie Sanders of Vermont criticised the measure for not going far enough. The scaled-back inflation plan did not include child tax credits, universal preschool, free community college, or Medicare expansion like Biden’s initial Build Back Better package did.
Nobody can dispute that this proposal does not address the significant issues that working people are facing, Sanders told reporters. “The housing problem, the child care crisis, the higher education crisis, or the crises facing millions of Americans are unrelated to this law. Because Medicare hasn’t been expanded, older Americans no longer have any teeth in their mouths.”