WASHINGTON — Democrats drove their election-year economic package toward Senate approval early Sunday, debating a measure with less ambition than President Joe Biden’s original domestic vision but that touches deep-rooted party dreams of slowing global warming, moderating pharmaceutical costs and taxing immense corporations.
On Saturday, the first debate started and early Sunday morning, Democrats had defeated over dozen Republican amendments to derail legislation or to create ads targeting Democratic senators. Despite unanimous GOP opposition,Democratic unity in the 50-50 chamber — buttressed by Vice President Kamala Harris’ tiebreaking vote — suggested the party was on track for a morale-boosting victory three months from elections when congressional control is at stake.
“I think it’s gonna pass,” Biden told reporters as he left the White House early Sunday to go to Rehoboth Beach, Delaware, ending his COVID-19 isolation. It appeared that the House would give final approval to Congress when it returned briefly from summer recess this Friday.
“It will reduce inflation. It will reduce prescription drug prices. It will reduce climate change. It will close tax loopholes and it will reduce the deficit,” Senate Majority Leader Chuck Schumer, D-N.Y., said of the package. “It will help every citizen in this country and make America a much better place.”
Republicans claimed the bill would harm an economy policymakers struggle to prevent from falling into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, 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,” Senate Minority Leader Mitch McConnell, R-Ky., argued. He claimed that tax and spending increases in the bill would lead to job loss, while not having any impact on inflation or climate change.
Nonpartisan analysts have said Democrats’ “Inflation Reduction Act” would have a minor effect on surging consumer prices. The bill is barely more than one-tenth the size of Biden’s initial 10-year, $3.5 trillion rainbow of progressive aspirations and abandons its proposals for universal preschool, paid family leave and expanded child care aid.
The new measure provides Democrats with a platform to take action on their most desired goals during the campaign season. It includes the largest ever federal effort on climate change — close to $400 billion — hands Medicare the power to negotiate pharmaceutical prices and extends expiring subsidies that help 13 million people afford health insurance.
Biden’s original measure collapsed after conservative Sen. Joe Manchin, D-W.Va., opposed it, saying it was too costly and would fuel inflation.
In an ordeal imposed on all budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of rapid-fire amendments. Each tested Democrats’ ability to hold together a compromise negotiated by Schumer, progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, D-Ariz.
Progressive Sen. Bernie Sanders, I-Vt., offered amendments to further expand the legislation’s health benefits, and those efforts were defeated. The majority of votes were voted for by Republicans. Many were intended to make Democrats appear soft on U.S. Mexico border security, gasoline and energy prices and bullies who want to enforce IRS tax law enforcement.
Before debate began Saturday, the bill’s prescription drug price curbs were diluted by the Senate’s nonpartisan parliamentarian. Elizabeth MacDonough, who referees questions about the chamber’s procedures, said a provision should fall that would impose costly penalties on drug makers whose price increases for private insurers exceed inflation.
It was the bill’s chief protection for the 180 million people with private health coverage they get through work or purchase themselves. Special procedures will allow Democrats to pass the bill with a simple majority, without the 60 vote margin. However, their provisions should be more focused on budget numbers and policy changes than dollar-and-cents.
However, the core of their drug price language was not changed. This included Medicare negotiating the price of drugs for 64 million seniors. Manufacturers were penalized for overinflating Medicare’s prescription drug prices and beneficiaries being limited to out-of-pocket costs up to $2,000 per year.
The bill also caps Medicare patients’ costs for insulin, the expensive diabetes medication, at $35 monthly.
The measure’s final costs were being recalculated to reflect late changes, but overall it would raise more than $700 billion over a decade. A 15% minimum tax would be applied to a few corporations that have yearly profits of more than $1 billion. Companies who repurchase stock will also pay a 1% tax. This tax is intended to boost IRS tax collection and reduce government drug cost.
Sinema forced Democrats not to pursue a plan that would have prevented wealthy hedge fund managers paying lower than the individual income tax rate for their earnings. She also joined with other Western senators to win $4 billion to combat the region’s drought.
It was on the energy and environment side that compromise was most evident between progressives and Manchin, a champion of fossil fuels and his state’s coal industry.
Tax credits to encourage the production of solar panels, wind turbines and electric vehicles would help clean up our energy. Home energy rebates would be available, as well as funds to build factories using clean energy technology. There also might be money for climate-friendly farming practices and to reduce the pollution in minorities.
Manchin received billions in funding to reduce carbon emissions and language to require more auctions by the government for oil drilling on federal land. Manchin also wants to see separate legislation passed this fall that would accelerate energy project permits.
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