Senate Democrats passed their sweeping tax, health care and climate change legislation after a night of marathon voting, with Vice President Harris voting decisively to break a 50-50 deadlock and send the package in the House.
The long-awaited $740 billion bill would raise corporate taxes, fight climate change, reduce the cost of prescription drugs and reduce the deficit.
The bill was approved on Sunday afternoon after a full night and morning of senators working tirelessly to consider amendments to the legislation. Democrats generally rallied to defeat GOP amendments that could have defeated the bill.
A last-second hitch occurred when Sen. Kyrsten Sinema (D-Arizona) supported an amendment that extended the cap on state and local tax deductions (SALT), which was a key part of the tax reduction bill. Trump’s taxes in 2017. This was seen as endangering the bill because the cap on the deduction hurts many households in blue states and districts.
Seven Democrats ended up supporting the amendment proposed by Sen. John Thune (RS.D.), but any damage was repaired by the immediate passage of another amendment that replaced the SALT cap extension with a source different income.
As the vote on final passage took place, several Democrats offered hugs to Sinema, who had been involved in a number of negotiations on the bill over the past few days, some of which feared could overturn the package. .
Democratic senators also applauded their staff, who sat at the back of the chamber.
Once considered nearly dead, the bill came back to life last week after Sen. Joe Manchin (DW.Va.) and Senate Majority Leader Charles Schumer (DN.Y.) reached a deal which cut the legislation by more than $3 trillion and renamed it the Inflation Reduction Act.
Sinema struck a separate deal with Schumer on Thursday, giving Democrats their 50th vote and paving the way for the party to push the legislation through the Senate using special budget rules that prevented the GOP from killing him with a filibuster.
The House is due to meet again at the end of the week to vote on the package. Final passage through the House would send it to the White House for President Biden’s signature less than three months before the midterm elections.
Biden and the Democrats hope that will soften their changes in the holding of their House and Senate majorities by exciting a disenchanted Democratic base, while Republicans are expected to attack the spending as wasteful and misguided.
A vote-rama on the bill began just before midnight Saturday as Democrats united to defeat a barrage of Republican-sponsored amendments aimed at putting the majority party in place.
Such an amendment sponsored by Sen. James Lankford (R-Okla.) would have removed $1 million from the Affordable Care Act to maintain Title 42 health care order denying asylum-seeking migrants entry to states. -United.
Democrats rejected another amendment by Sen. Lindsey Graham (RS.C.) to impose a 16.4-cent-a-barrel tax on imported petroleum products and crude oil refined in the United States.
A Third Amendment sponsored by Sen. Mike Crapo (R-Idaho) would have barred the IRS from auditing individuals and business owners with incomes below $400,000.
The vote capped a long and grueling process that began more than a year ago when Senate Democrats began negotiations to enact priorities for Biden’s Build Back Better agenda.
Over the past year, many of the president’s most ambitious social spending priorities have been shelved due to opposition from Manchin and Sinema. At two points the negotiations completely collapsed amid furious recriminations.
Ultimately, Democrats rallied behind a bill to raise more than $300 billion in new tax revenue from wealthy corporations, dramatically cut global warming emissions by 2030, and give Medicare expanded new power to negotiate lower prescription drug prices.
“I thank all of my colleagues who poured their blood, sweat and tears into crafting this exceptional piece of legislation. This is one of the most comprehensive and impactful bills Congress has seen in decades,” Schumer said on the floor.
Democrats say the bill will cut the deficit by nearly $300 billion, but Republicans say it will have a negligible impact on inflation.
“It looks like a bill that is going to solve the number one problem facing our nation, which is inflation, and then you look at the contents of the bill and you will find that the bill will not do anything to reduce inflation,” Thune said.
The Congressional Budget Office (CBO) projects the legislation will reduce the deficit by $90 billion over 10 years.
A Democratic aide, however, said the CBO recognizes the legislation will likely increase tax revenue by more than $200 billion by strengthening Internal Revenue Service programs and tax compliance enforcement.
Many Democratic lawmakers were excited to reach agreement on a $369 billion energy security and climate package, especially after talks between Schumer and Manchin broke down in a heated exchange on July 14.
Last month, Democrats were set to offer a stripped-down package consisting only of prescription drug reform and a two-year extension of the expiration of health insurance subsidies under the Affordable Care Act.
But then Manchin met with Schumer on July 18 to restart negotiations and within days drafted a bill that included tens of billions of dollars in incentives for green energy technology and energy efficiency. and fossil fuel penalties, such as a tax on methane emissions and a tax on foreign oil imports.
It offers tax credits of $4,000 and $7,500 for the purchase of used and new electric vehicles, but does not allow their use for vehicles with batteries made from Chinese processed minerals.
It is expected to reduce global warming emissions by 40% over the next decade.
“I can’t stop talking to my kids about the climate provisions,” said Sen. Chris Murphy (D-Conn.). “It’s the first time they’ve been legitimately enthusiastic about my work. We really owe it to the next generation to get it right and many young people in this country were developing a deep sense of hopelessness that adults were not taking the climate crisis seriously.
Republicans argued that the legislation would have little impact on rising global temperatures and would end up forcing people to pay more for gas due to the relaunch of the tax on foreign oil.
Graham called the oil import tax a “vampire tax” because it was eliminated in 1995 and is now coming back from the dead.
“This bill imposes a new gasoline tax of 16.4 cents per barrel on all imported petroleum products and crude oil refined in America,” Graham said. “This creates new gasoline taxes for the American consumer in the name of climate change.”
Senate Budget Committee Chairman Bernie Sanders (I-Vt.) expressed deep disappointment with the prescription drug reform component of the bill. He said he should have done more to allow Medicare to negotiate lower drug prices.
But other Democrats rejected Sanders’ view, arguing the reform would set a powerful new precedent by giving the federal government more leverage in the marketplace.
“There’s a reason the big PhRMA fights so hard against this. They know that once you make negotiation a part of the law, there’s no going back. That’s it. it’s about,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who helped craft prescription drug reform. “This is a seismic change between the government and this lobby.”
Sanders proposed an amendment to require Medicare to pay no more than the Department of Veterans Affairs for prescription drugs. His amendment failed by a lopsided 1-99 vote, with Sanders voting the only “yes”.
Another Sanders amendment to extend a $300-a-month child tax credit and pay for it by raising the corporate tax rate from 21% to 28% failed by a 1-97 vote. Sanders voted yes.
The legislation includes a three-year extension of Affordable Care Act grants at a cost of $64 billion.
The legislation will raise $258 billion over 10 years by imposing a minimum corporate tax of 15% on companies with more than $1 billion in profits and requiring companies to follow generally accepted accounting principles when doing business. report their income to the IRS.
Sinema won a significant concession from Schumer by protecting manufacturing companies from losing their ability to fully amortize capital expenditures due to the 15% minimum tax. This reduced the proposal’s projected revenue from $313 billion to $258 billion.
Schumer also had to drop a proposal to close the carried interest tax loophole, which allows asset managers to pay a favorable tax rate, to secure Sinema’s vote.
But the Democratic leader made up for the lost revenue by adding a 1% excise tax on stock buybacks, which will bring in about $74 billion.
“I hate stock buybacks. I think they’re one of the most selfish things corporate America does,” the Democratic leader told reporters on Friday.
Republicans argued that corporate taxes would stunt economic growth.
“I don’t think I need to tell anyone what happens when you raise corporate taxes, especially when the economy is contracting. You get less growth, lower wages and fewer jobs,” Thune said.
This story was updated at 3:25 p.m.