WASHINGTON ― After a year of painstaking negotiations that seemed for a time to be going nowhere, Senate Democrats on Sunday approved sweeping legislation aiming to reduce the nation’s output of greenhouse gases and make health care more affordable.
The vote was split 50-50 along party lines, with Vice President Kamala Harris casting the tie-breaker after a marathon session of votes on amendments. The House is expected to take up the legislation and pass it on Friday.
The Inflation Reduction Act ― while substantially narrowed from prior versions ― would give President Joe Biden another major legislative victory ahead of November’s midterm elections. Its given name is a reflection of the shaky politics for his party at the moment, with rising costs of food, gasoline and energy at the top of voters’ minds.
The bill would make broad changes in energy, drug and tax policies. Prior to some last-minute changes caused by procedural issues, the nonpartisan Congressional Budget Office estimated the bill would cut the budget deficit by a little more than $90 billion over 10 years.
Democrats also claim another $200 billion in deficit reduction from the revenues that the government would collect from tougher IRS enforcement.
The bill sets aside hundreds of billions of dollars to fight climate change, including through incentivizing clean energy technology. Senate Finance Committee Chairman Ron Wyden (D-Ore.) said $260 billion would go toward clean energy tax credits that he called “transformational.”
The bill would also enact a change Democrats have sought for more than a decade ― to allow Medicare to negotiate with drug companies over the prices of prescription drugs. That kind of haggling was outlawed in the 2003 Part D prescription drug benefit bill passed by Republicans.
A separate provision of the legislation would extend a temporary set of subsidies for the Affordable Care Act that reduce the price of insurance that people buy directly through HealthCare.gov, or through state-run insurance exchanges like Pennsylvania’s “Pennie” and Connect for Health Care Colorado. For some insurance buyers, the subsidies lead to savings of hundreds or even thousands of dollars a year.
The subsidies, which Democrats enacted in 2021 as part of their pandemic relief package, were set to expire this year. The Inflation Reduction Act has them staying in place through 2025.
On taxes, the bill would put in place a 15% minimum corporate tax and beef up IRS enforcement to the tune of $80 billion over the next 10 years.
Democrats had initially hoped to pass a much broader social policy bill, but couldn’t get Sen. Joe Manchin (D-W.Va.) on board with things like paid leave, affordable housing and child care. After months of stalled talks that left progressives steaming, Manchin shocked Washington by agreeing to a deal with Senate Majority Leader Chuck Schumer (D-N.Y.) on a narrower package, and angering Republicans who believed he had driven the final nail in the coffin.
Democrats eventually won over Sen. Kyrsten Sinema (D-Ariz.), their last holdout, by agreeing to make several changes to the bill, including eliminating a provision that would have tightened a tax loophole associated with hedge fund managers and private equity executives. That measure was replaced with a new excise tax on stock buybacks slated to begin in 2023.
Through Saturday night, Republicans did their best to extract a political cost for Democrats in passing the bill ― making them vote on a series of ticklish amendments intended less to be adopted than to give Democratic Senate candidates nightmares about the ads they could spawn.
Sen. Susan Collins (R-Maine) offered an amendment that would have prohibited the IRS from accessing its additional money in the bill until 90% of the agency’s employees were back to work in person. It failed on a 50-50 vote. A proposed amendment by Sen. Mike Crapo (R-Idaho) that would have prohibited the new IRS funds from being used to audit taxpayers with taxable incomes of less than $400,000 annually ― the level below which Biden said people would not see any tax hikes ― was also defeated in a 50-50 tie.
Other proposed Republican amendments aimed to put in place proposals that Democrats said they supported but that were not included in the bill, like a revamp of environmental permitting requirements and opening up Outer Continental Shelf areas for energy exploration. They were defeated by a 49-50 procedural vote and a 50-50 tally, respectively.
“My R[epublican] friends have made clear they’re completely unwilling to support this bill under any condition. None of their amendments would change that. For this reason, I’ll vote to protect the integrity of the IRA regardless of the substance of their fake amendments,” Manchin tweeted Saturday, pledging to stick with Democrats in brushing back the GOP’s efforts.
Not all of the defeated amendments were from Republicans, though. Senate Democrats stuck to their plan to avoid upsetting the bill’s delicate balance with any on-the-fly changes ― meaning that proposed amendments offered by Senate Budget Chairman Bernie Sanders (I-Vt.), which would have expanded health care benefits, were defeated on 1-99, 3-97 and 1-98 votes.
Democrats ― though supportive of that effort ― voted those amendments down since their adoption would have increased the overall cost of the package and lost them the support of Manchin.
“Senator Sanders is right,” Sen. Sherrod Brown (D-Ohio) said after Sanders proposed an amendment to extend a monthly child allowance. “But I ask my colleagues to vote no, because this would bring the bill down.”
Democratic attempts to introduce a $35 cap on insulin prices also failed, because the Senate parliamentarian concluded that the provision violated the complex rules that govern legislation moving through the reconciliation process. Democrats sought to include the measure in the bill anyway, but Republicans voted to strip it out.
The final bill was a patchwork that some senators only grudgingly supported.
Sanders on Saturday stepped on Democrats’ messaging by echoing GOP complaints that the bill would not rein in inflation. He labeled it “the so-called ‘Inflation Reduction Act,’” to the delight of the Republican National Committee.
Republicans were backed up Thursday by the head of the nonpartisan Congressional Budget Office, Phillip Swagel. At the request of Sen. Lindsey Graham (S.C.), the top Republican on the Senate Budget Committee, Swagel offered his opinion of the inflation-fighting impact of the bill and said it would be “negligible” in 2022. In 2023, it would result in inflation being only 0.1 percentage point lower or higher than under current law, he said.
But Democratic leaders said that analysis failed to account for health and energy rebates in the bill. They also vowed to fight for the rest of their agenda in the coming months.
“There are people who want to do more,” Wyden told reporters on Saturday. “I share that view. It wasn’t on offer tonight. Couldn’t get 50 votes.”
