Democrats’ Climate and Tax Deal Advances in Senate

the legislation, which basically survived the censorship More than $700 billion in government revenue was raised by Senate members over 10 years, much of it from a 15 percent minimum tax on large, profitable corporations, as well as money generated by strengthening the IRS’ tax collection efforts. Authorizing Medicare to negotiate lower prescription drug prices and levying a 1 percent tax on stock buybacks will also boost government budget revenue over the next decade.

About $430 billion of that will be used to incentivize companies and individuals to reduce carbon emissions and extend subsidies for health insurance under the Affordable Care Act. The legislation uses the remaining new revenue to reduce the deficit.

Senate Majority Leader Chuck Schumer (D-N.Y.) said Saturday that the bill meets “all of our goals: tackling climate change, reducing health care costs, closing tax loopholes abused by the wealthy, and reducing deficits.” “This is a major victory for the American people,” he said.

Republicans say the bill, known as the “Reduction in Inflation Act,” does little to fight inflation and contains damaging corporate tax increases that would flow to households. They could target the bill’s tax provisions in the revision process, hoping to entice at least one Democrat to support changes to the bill. They could also make changes to the bill’s energy provisions and try to make changes to immigration policy.

Senate Minority Leader Mitch McConnell (R-Kentucky) on Saturday cited voters’ concerns about inflation, saying Senate Democrats “misread the American people’s anger over another reckless tax and spending binge.”

To prevent any changes that could jeopardize the bill’s support in the House, many Senate Democrats on Saturday pledged to oppose all amendments — even if they would have supported the proposed changes.

Sen. Bob Menendez (D-N.J.) said in a statement Saturday that he would completely oppose the legislation if lawmakers voted to increase immigration restrictions during the amendment process.

“I urge my Democratic colleagues to unite and vote against all amendments, regardless of underlying policy or party,” Mr Menendez said.

Sen. Bernie Sanders (I., Vt.) gave a lengthy speech in the Senate calling on Democrats to expand their measures. He said the current bill does not meet the requirements.

“What I’m asking today is for all 50 Democrats to come together and start addressing the major crisis facing working families,” he said, adding that the bill “has some good features and some very bad features.”

The amendment process, known as a vote in the Senate, is the final hurdle facing Democrats, who are pursuing it through a legislative process known as reconciliation. The settlement allows Democrats to bypass the 60-vote threshold required for most legislation in the Senate, but it also requires lawmakers to abide by a set of special rules and go through a lengthy amendment process.

Independent members of the Senate made a series of rulings Saturday, finding that most of the Democrats’ bills meet the settlement rules.

“I’m pleased to report to my colleagues that the bill we’re putting forward to lawmakers remains largely unchanged,” Mr. Schumer said.

Mr. Schumer said lawmakers did not accept part of the bill that would have to pay rebates if drug companies raise prices faster than Medicare and private insurance inflation.

The rebate requirement would apply only to Medicare, not the commercial market, a setback to Democrats’ broader efforts to cap drug prices. Efforts to limit the cost of insulin to $35 a month could face a similar fate as the rebate clause, as Democrats are preparing to try to impose the issue on the Senate and leave Republicans in a bind on sensitive political issues.

Democrats had to make a series of final changes to the bill this week after months of failed negotiations after reaching a deal with Sen. Joe Manchin (D., W.Va.), who resisted the Democratic Party’s broader agenda. Won the support of Sen. Kyrsten Sinema (D-Ariz.) on Thursday. They agreed to cut elements of the corporate minimum tax and forgo a proposed tax increase on carried interest income.

Ms Sinema, who made no explicit commitment to support the bill, said she would like to see its final form following the amendment process.

If Democrats succeed in passing the bill, its passage would mark their party’s victory in the months leading up to the midterm elections, which polls suggest will be a challenge for Democrats, in large part because of the public’s appetite for inflation. worry.

The bill would, for the first time, authorize Medicare to negotiate prices for a limited set of drugs chosen from those that make up the lion’s share of government spending. It will also cap out-of-pocket drug costs for Medicare beneficiaries to $2,000 a year starting in 2025 and make vaccines free for Medicare enrollees starting next year. Under the bill, subsidies enacted last year to help people buy health insurance through the Affordable Care Act will be extended for three years through 2025 as part of the U.S. rescue package at a cost of $64 billion.

On climate change, the bill injects money into wind and solar projects, as well as batteries to store renewable energy, while also subsidizing technologies to capture and store carbon dioxide emissions. Consumers will benefit from subsidies for certain windows, heat pumps and other energy-efficient products, as well as a $7,500 tax credit for electric vehicle purchases.

Builders, homeowners and small businesses can take advantage of the new money pouring into so-called green banks, which will receive $20 billion to provide low-cost financing for energy-efficient products such as heat pumps, windows, solar panels, insulation and electricity. Vehicle charging station.

The Rhodium Group, an independent research firm, said the most important climate provision is the tax credit, which could spend billions of dollars on wind, solar and battery development to integrate clean energy into the grid. The group estimates the bill will reduce greenhouse gas emissions by 31 to 44 percent by 2030 from 2005 levels, compared with 24 to 35 percent under current policies.

write to Siobhan Hughes at siobhan.hughes@wsj.com and Andrew Duehren at andrew.duehren@wsj.com