Dems' climate, energy, tax bill clears initial Senate hurdle

·5 min read

WASHINGTON (AP) — Democrats pushed their election-year economic bill toward Senate approval early Sunday, starting the sprawling collection of President Joe Biden’s priorities on climate, energy, health and taxes on a pathway that the party hopes will end in final congressional passage by the end of this week.

The evenly divided Senate voted Saturday to begin debating the legislation 51-50, with Vice President Kamala Harris breaking the tie and overcoming unanimous Republican opposition. A dwindled version of earlier multitrillion-dollar measures that Democrats failed to advance, the package has become a partisan battleground over inflation, gasoline prices and other issues that polls show are driving voters.

The House, where Democrats have a slender majority, could give the legislation final approval next Friday.

“The time is now to move forward with a big, bold package for the American people,” said Senate Majority Leader Chuck Schumer, D-N.Y. “This historic bill will reduce inflation, lower costs, fight climate change. It’s time to move this nation forward.”

Republicans said the measure would damage the economy and make it harder for people to cope with sky-high inflation. They said the bill’s business taxes would hurt job creation and force prices upward and urged voters to remember that in November.

“The best way to stop this tax and spend inflationary madness is to fire some of the 50 so they can’t keep doing this to your family,” said South Carolina Sen. Lindsey Graham, top Republican on the Senate Budget Committee.

Nonpartisan analysts have said the legislation, which Democrats have named the Inflation Reduction Act, would have a minor impact on the nation’s worst inflation bout in four decades. Even so, it would take aim at issues the party has longed to address for years including global warming, pharmaceutical costs and taxing immense corporations.

Before reaching final passage, senators plodded through a nonstop pile of amendments called a “vote-a-rama” that seemed certain to last hours.

In early votes, the chamber rejected an effort by progressive Sen. Bernie Sanders, I-Vt., to require Medicare to pay the same lower prescription drug prices paid by the Department of Veterans Affairs.

Another, by Graham, was defeated; it would have erased a fee Democrats want to renew on barrels of oil that raises money for hazardous waste cleanups. Republicans said Democrats' proposal would boost gasoline prices, a sore point for voters after this summer's record pump prices.

Earlier, the Senate parliamentarian gave a thumbs-up to most of Democrats’ revised 755-page bill. But Elizabeth MacDonough, the chamber’s nonpartisan rules arbiter, said Democrats had to drop a significant part of its plan for curbing drug prices.

MacDonough said Democrats violated Senate budget rules with language imposing hefty penalties on pharmaceutical companies that boost prices beyond inflation for drugs sold in the private insurance market. Those were the bill’s chief drug pricing protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or bought on their own.

Other pharmaceutical provisions were left intact, including giving Medicare the power to negotiate what it pays for drugs for its 64 million elderly recipients, a longtime Democratic aspiration. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a $2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries.

Democrats are using special procedures that would let them pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate. To do that, they must abide by rules that include a requirement that provisions be chiefly aimed at affecting the federal budget, not imposing new policy.

The weekend debate capped a startling 10-day turnabout that saw Democrats resurrect top components of Biden’s agenda that had seemed dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a package that would give the party an achievement against the backdrop of this fall’s congressional elections.

The measure is a shadow of Biden's initial 10-year, $3.5 trillion proposal, which funded a rainbow of progressive dreams including paid family leave, universal preschool, child care and bigger tax breaks for families with children. The current bill, barely over one-tenth that size, became much narrower as Democratic leaders sought to win the votes of the centrists Manchin and Sinema, yet it has unified a party eager to declare victory and show voters they are addressing their problems.

The bill offers spending and tax incentives favored by progressives for buying electric vehicles and making buildings more energy efficient. But in a bow to Manchin, whose state is a leading fossil fuel producer, there is also money to reduce coal plant carbon emissions and language requiring the government to open more federal land and waters to oil drilling.

Expiring subsidies that help millions of people afford private insurance premiums would be extended for three years, and there is $4 billion to help Western states combat drought. A new provision would create a $35 monthly cap for insulin, the expensive diabetes medication, for Medicare and private insurance patients starting next year. It seemed possible that language could be weakened or removed during debate.

Reflecting Democrats' calls for tax equity, there would be a new 15% minimum tax on some corporations with annual profits exceeding $1 billion but that pay well below the 21% corporate tax. Companies buying back their own stock would be taxed 1% for those transactions, swapped in after Sinema refused to support higher taxes on hedge fund managers. The IRS budget would be pumped up to strengthen its tax collections.

While the bill’s final costs were still being determined, it would spend close to $400 billion over 10 years to slow climate change, which analysts say would be the country’s largest investment in that effort, and billions more on health care. It would raise more than $700 billion in taxes and from government drug cost savings, leaving about $300 billion for deficit reduction over the coming decade — a blip compared to that period's projected $16 trillion in budget shortfalls.

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Associated Press writer Matthew Daly contributed to this report.