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Senate Dems Pass Budget Package 08/08 06:06
Democrats pushed their election-year economic package to Senate passage
Sunday, a hard-fought compromise less ambitious than President Joe Biden's
original domestic vision but one that still meets deep-rooted party goals of
slowing global warming, moderating pharmaceutical costs and taxing immense
corporations.
WASHINGTON (AP) -- Democrats pushed their election-year economic package to
Senate passage Sunday, a hard-fought compromise less ambitious than President
Joe Biden's original domestic vision but one that still meets deep-rooted party
goals of slowing global warming, moderating pharmaceutical costs and taxing
immense corporations.
The estimated $740 billion package heads next to the House, where lawmakers
are poised to deliver on Biden's priorities, a stunning turnaround of what had
seemed a lost and doomed effort that suddenly roared back to political life.
Cheers broke out as Senate Democrats held united, 51-50, with Vice President
Kamala Harris casting the tie-breaking vote after an all-night session.
"Today, Senate Democrats sided with American families over special
interests," President Joe Biden said in a statement from Rehoboth Beach,
Delaware. "I ran for President promising to make government work for working
families again, and that is what this bill does -- period."
Biden, who had his share of long nights during his three decades as a
senator, called into the Senate cloakroom during the vote on speakerphone to
personally thank the 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 "move swiftly to send this bill to the
president's desk." House votes are expected Friday.
"It's been a long, tough and winding road, but at last, at last we have
arrived," said Senate Majority Leader Chuck Schumer, D-N.Y., ahead of final
votes.
"The Senate is making history. I am confident the Inflation Reduction Act
will endure as one of the defining legislative feats of the 21st century," he
said.
Senators engaged in a round-the-clock marathon of voting that began Saturday
and stretched late into Sunday afternoon. Democrats swatted down some three
dozen Republican amendments designed to torpedo the legislation. Confronting
unanimous GOP opposition, Democratic unity in the 50-50 chamber held, keeping
the party on track for a morale-boosting victory three months from elections
when congressional control is at stake.
The bill ran into trouble midday over objections to the new 15% corporate
minimum tax that private equity firms and other industries disliked, forcing
last-minute changes.
Despite the momentary setback, the "Inflation Reduction Act" gives Democrats
a campaign-season showcase for action on coveted goals. It includes the
largest-ever federal effort on climate change -- close to $400 billion -- caps
out-of-pocket drug costs for seniors on Medicare to $2,000 a year and extends
expiring subsidies that help 13 million people afford health insurance. By
raising corporate taxes and reaping savings from the long-sought goal of
allowing the government to negotiate drug prices for Medicare, the whole
package is paid for, with some $300 billion extra revenue for deficit reduction.
Barely more than one-tenth the size of Biden's initial 10-year, $3.5
trillion Build Back Better initiative, the new package abandons earlier
proposals for universal preschool, paid family leave and expanded child care
aid. That plan collapsed after conservative Sen. Joe. Manchin, D-W.Va., opposed
it, saying it was too costly and would fuel inflation.
Nonpartisan analysts have said the 755-page "Inflation Reduction Act" would
have a minor effect on surging consumer prices.
Republicans said the new measure would undermine an economy that
policymakers are struggling to keep from plummeting 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.
In an ordeal imposed on most 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 the compromise bill negotiated by Schumer,
progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, D-Ariz.
Progressive Sen. Bernie Sanders, I-Vt., criticized the bill's shortcomings
and offered amendments to further expand the legislation's health benefits, but
those efforts were defeated. Republicans forced their own votes designed to
make Democrats look soft on U.S.-Mexico border security and gasoline and energy
costs, and like bullies for wanting to strengthen IRS tax law enforcement.
Before debate began, the bill's prescription drug price curbs were diluted
by the Senate's nonpartisan parliamentarian who 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. Under special
procedures that will let Democrats pass their bill by simple majority without
the usual 60-vote margin, its provisions must be focused more on
dollar-and-cents budget numbers than policy changes.
But the thrust of Democrats' pharmaceutical price language remained. That
included letting Medicare negotiate what it pays for drugs for its 64 million
elderly recipients, penalizing manufacturers for exceeding inflation for
pharmaceuticals sold to Medicare and limiting beneficiaries out-of-pocket drug
costs to $2,000 annually.
The bill also caps Medicare patients' costs for insulin, the expensive
diabetes medication, at $35 monthly. Democrats wanted to extend the $35 cap to
private insurers but it ran afoul of Senate rules. Most Republicans voted to
strip it from the package, though in a sign of the political potency of health
costs seven GOP senators joined Democrats trying to preserve it.
The measure's final costs were being recalculated to reflect late changes,
but overall it would raise more than $700 billion over a decade. The money
would come from a 15% minimum tax on a handful of corporations with yearly
profits above $1 billion, a 1% tax on companies that repurchase their own
stock, bolstered IRS tax collections and government savings from lower drug
costs.
Sinema forced Democrats to drop a plan to prevent wealthy hedge fund
managers from paying less than individual income tax rates for their earnings.
She also joined with other Western senators to win $4 billion to combat the
region's drought.
Several Democratic senators joined the GOP-led effort to exclude some firms
from the new corporate minimum tax.
The package keeps to 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 compromise was most evident
between progressives and Manchin, a champion of fossil fuels and his state's
coal industry.
Clean energy would be fostered with tax credits for buying electric vehicles
and manufacturing solar panels and wind turbines. There would be home energy
rebates, funds for constructing factories building clean energy technology and
money to promote climate-friendly farm practices and reduce pollution in
minority communities.
Manchin won billions to help power plants lower carbon emissions plus
language requiring more government auctions for oil drilling on federal land
and waters. Party leaders also promised to push separate legislation this fall
to accelerate permits for energy projects, which Manchin wants to include a
nearly completed natural gas pipeline in his state.
Still, environmental groups hailed the passage as a milestone. "Tremendous
progress," said Manish Bapna, president and CEO of the Natural Resources
Defense Council, in a statement.
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