Democrats pushed their election-year economic package to Senate approval early Sunday, discussing a measure less ambitious than President Joe Biden’s original domestic goals, but touching on slowing global warming, lowering drug prices costs and a deeply ingrained partisan dream of taxing big corporations.
The legislation passed its first test in a tie House when Democrats broke through the Republican unanimous opposition and voted to open the debate 51-50 thanks to a tie-breaking vote by Vice President Kamala Harris. The House of Representatives plans to return to the polls on Friday on what Democrats hope will be final approval from Congress.
“It’s going to lower inflation. It’s going to lower the cost of prescription drugs. It’s going to fight climate change. It’s going to close tax loopholes and it’s going to reduce and reduce the deficit,” Senate Majority Leader Chuck Schumer (D-N.Y.) said of the plan time said. “It will help every citizen of this country and make America a better place.”
Republicans said the measure would undermine an economy that policymakers are trying to avoid slipping into recession. They said the bill’s sales tax would hurt jobs and force prices to skyrocket, making it harder to deal with America’s worst inflation since the 1980s.
“The Democrats have robbed American homes once with inflation, and now their solution is to rob American homes a second time,” argued Senate Minority Leader Mitch McConnell (R-Ky). He said spending and tax hikes in the legislation would eliminate jobs with minimal impact on inflation and climate change.
Nonpartisan analysts said the Democrats’ Lower Inflation Act would have a slight impact on soaring consumer prices. The bill is just over a tenth of Biden’s initial 10-year, $3.5 trillion progressive dream, and the new package forgoes universal preschool education, paid family leave and expanded child care aid.
Even so, the measure provided Democrats with a campaign-season showcase to achieve the coveted goal. It includes the largest-ever federal effort to combat climate change — nearly $400 billion — and will give Medicare the power to negotiate drug prices and extend expiring subsidies to help 13 million Americans afford health insurance.
Biden’s original measure collapsed after conservative Sen. Joe Manchin (DW.Va.) opposed it, saying it was too costly and would fuel inflation.
In the test imposed on all budget bills like this, the Senate has been caught up in an hours-long “vote” on quick amendments. Each tested the Democrats’ ability to negotiate a compromise between Schumer, progressives, Manchin and the mysterious centrist Sen. Kirsten Sinema (D-Ariz).
Progressive Sen. Bernie Sander of I-Vt. proposed amendments to further expand the legislation’s health benefits, but they were defeated. But most of the proposed changes were made by Republicans to unravel the bill or force Democrats to vote in dangerous political spheres.
A Republican proposal would force the Biden administration to continue Trump-era restrictions that have reduced the flow of migrants along the southwest border, citing the pandemic.
Democrats facing a tough re-election earlier this year supported such an extension, when Republicans combined the two issues, forcing the party to back away from its push for COVID-19 spending. This time, Democrats have rallied against border controls as their larger economic legislation is threatened and an election looms.
Other Republican amendments would require more gas and oil leases on federal lands and block renewal of oil charges to help fund toxic waste cleanups. All were rejected on partisan votes. Republicans have accused Democrats of being soft on border security, leaving the door open for higher energy and gas costs.
The bill’s prescription drug price limits were downplayed by independent members of the Senate ahead of Saturday’s debate. Elizabeth MacDonald, who adjudicates on procedural issues at the Chamber of Commerce, said a clause that would have imposed steep fines on drugmakers for raising prices by private insurers outpacing inflation should be scrapped.
That’s the Act’s primary protection for the 180 million people who have private health insurance through work or out of pocket. Under a special process that allows Democrats to pass their bills with a simple majority without the usual 60-vote margin, its provisions must focus more on policy than budget changes in dollars and cents.
But the thrust of their drug price language remains. That includes getting Medicare to negotiate the cost of drugs it pays for its 64 million elderly recipients, punishing manufacturers for selling drugs to Medicare beyond inflation, and limiting beneficiaries’ out-of-pocket drug costs to $2,000 a year.
The bill also caps the cost of a patient’s diabetes drug insulin to $35 a month.
The final cost of the measure is being recalculated to reflect later changes, but overall it will raise more than $700 billion over a decade. The funding will come from a 15% minimum tax on a handful of companies that make more than $1 billion in annual profits; a 1% tax on companies that buy back their own stock, bolstering IRS taxes and government savings from lower drug costs funds.
Sinema forced Democrats to abandon a plan to prevent wealthy hedge fund managers from paying less than their personal income tax rates on their income. She also won $4 billion with other Western senators to fight the region’s horrific drought.
On energy and the environment, the Democratic compromise was most evident between progressives and Manchin, a champion of fossil fuels and their state’s coal industry.
Tax credits for the purchase of electric vehicles and the manufacture of solar panels and wind turbines will strengthen efforts to promote clean energy. There will be home energy rebates, money to build clean energy technology factories, and money to promote climate-friendly farming practices and reduce pollution in minority communities.
Manchin has won billions of dollars to help power plants reduce carbon emissions and demanded more government auctions for oil drilling on federal lands and waters. Party leaders have also pledged to push through separate legislation this fall to speed up the permitting of energy projects, which Manchin wants to include in his state with a nearly-completed natural gas pipeline.
