Senate Democrats pass budget package, win for Biden
WASHINGTON — Democrats pushed their election-year economic package through the Senate on Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original national vision but still meets the party’s deep-rooted goals of slowing warming climate, moderate pharmaceutical costs and tax huge corporations.
The estimated $740 billion package is heading to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround from what had seemed like a wasted and doomed effort that has suddenly returned to The political life. Cheers erupted as Senate Democrats united 51-50, with Vice President Kamala Harris voting for the tiebreaker after an all-night session.
“Today, Senate Democrats stood with American families for special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware. “I ran for president promising to make government work again for working families, and this bill does that — period.”
Biden, who has had his share of long nights in his three decades as a senator, called the Senate locker room during the loudspeaker vote to personally thank staff for their hard work.
The president urged the House to pass the bill as soon as possible. Speaker Nancy Pelosi said her chamber would “act quickly to send this bill to the president’s office.” House votes are expected on Friday.
“It’s been a long, hard and winding road, but finally, we’ve finally arrived,” Senate Majority Leader Chuck Schumer, DN.Y., said before the final votes.
“The Senate is making history. I am confident that the Cut Inflation Act will remain one of the defining legislative feats of the 21st century,” he said.
Senators engaged in a round-the-clock voting marathon that began Saturday and stretched late into the afternoon of Sunday. Democrats crushed some three dozen Republican amendments intended to torpedo the legislation. In the face of unanimous GOP opposition, Democratic unity in the 50-50 chamber held firm, keeping the party on course for a morale-boosting victory three months from the election when control of Congress hangs in the balance. .
The bill ran into trouble midday over objections to the new 15% minimum corporate tax that private equity firms and other industries did not like, forcing last-minute changes.
Despite the momentary setback, the “Cutting Inflation Act” offers Democrats a campaign season showcase to act on coveted goals. It includes the largest-ever federal effort on climate change — nearly $400 billion — caps drug costs for seniors under Medicare at $2,000 a year and extends expiring subsidies that help 13 million people afford health insurance. Raising corporate taxes and reaping savings through the long-sought goal of allowing the government to negotiate Medicare drug prices pays off, with some $300 billion in additional revenue for the reduction. of the deficit.
Just over a tenth the size of Biden’s 10-year, $3.5 trillion Build Back Better initiative, the new package abandons previous proposals for universal early education, paid family leave and extended childcare assistance. This plan fell apart after Conservative Senator Joe. Manchin, DW.Va., opposed it, saying it was too expensive and would fuel inflation.
Nonpartisan analysts said the 755-page “Cutting Inflation Act” would have a minor effect on soaring consumer prices.
Republicans said the new measure would undermine an economy that policymakers are struggling to prevent from plunging into recession. They said the bill’s business taxes would hurt job creation and drive up prices, making it harder for people to cope with the country’s worst inflation since the 1980s.
“The Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” said Senate Minority Leader Mitch McConnell, R-Ky.
In a test imposed on most budget bills like this, the Senate had to endure an overnight “vote-a-rama” of swift amendments. Each tested the Democrats’ ability to hold together the compromise bill brokered by Schumer, the Progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, D-Ariz.
Progressive Sen. Bernie Sanders, I-Vt., criticized the bill’s shortcomings and proposed amendments to further expand the health benefits of the legislation, but those efforts were defeated. Republicans forced their own votes in order to make Democrats look lenient on U.S.-Mexico border security and gas and energy costs, and as bullies for wanting to beef up US tax law enforcement. the IRS.
Before debate began, the bill’s prescription drug price restrictions were watered down by the nonpartisan Senate congressman who said a provision should fall that would impose costly penalties on drugmakers whose price increases prices for private insurers exceed inflation.
It was the bill’s main protection for the 180 million people with private medical coverage that they get through work or buy themselves. Under special procedures that will allow Democrats to pass their bill by a simple majority without the usual 60-vote margin, its provisions must focus more on dollar-and-cent budget numbers than policy changes .
But the push for pharmaceutical pricing language from Democrats remained. This involved letting Medicare negotiate what it pays for drugs for its 64 million elderly beneficiaries, penalizing manufacturers for outpacing inflation on pharmaceuticals sold to Medicare, and limiting drug costs for beneficiaries. at $2,000 per year.
The bill also caps Medicare patient costs for insulin, the expensive diabetes drug, at $35 per month. Democrats wanted to extend the $35 cap to private insurers, but that went against Senate rules. Most Republicans voted to drop it from the package, although in a sign of the political might of health care costs, seven GOP senators joined Democrats in an attempt to preserve it.
The measure’s final costs have been recalculated to reflect the late changes, but overall would bring in more than $700 billion over a decade. The money would come from a minimum tax of 15% on a handful of companies whose annual profits exceed $1 billion, a 1% tax on companies that buy back their own shares, a strengthening of tax collections IRS and government savings from lower drug costs.
Sinema forced Democrats to scrap a plan to prevent wealthy hedge fund managers from paying less than personal income tax rates on their earnings. She also joined other Western senators in winning $4 billion to fight drought in the region.
Several Democratic senators have joined the GOP-led effort to exclude certain businesses from the new minimum corporate tax.
The package respects Biden’s pledge not to raise taxes on those earning less than $400,000 a year.
It was on the energy and environment side that the compromise was most evident between the progressives and Manchin, a champion of his state’s fossil fuels and coal industry.
Clean energy would be encouraged by tax credits for the purchase of electric vehicles and the manufacture of solar panels and wind turbines. There would be household energy rebates, funds for building factories developing clean energy technologies and money to promote climate-friendly farming practices and reduce pollution in minority communities.
Manchin won billions to help power plants reduce carbon emissions, as well as language demanding more government auctions for oil drilling on federal lands and waters. Party leaders have also promised to push separate legislation this fall to expedite permits for energy projects, which Manchin wants to include a near-complete gas pipeline in his state.
Still, environmental groups hailed the passage as a milestone. “Significant progress,” Manish Bapna, president and CEO of the Natural Resources Defense Council, said in a statement.
Associated Press writers Chris Megerian in Rehoboth, Del., and Matthew Daly in Washington contributed to this report.