WASHINGTON — Senate Leader Mitch McConnell (R-Ky.) said last month he would not allow the Senate to pass a bipartisan bill on computer chips if Democrats tried to revive their “Build Back Better” agenda.
On Wednesday, the Senate passed the bipartisan tech manufacturing bill, and hours later Democrats announced a breakthrough in their major domestic policy legislation.
In other words, McConnell’s gamble failed.
Majority Leader Chuck Schumer (DN.Y.) and Senator Joe Manchin (DW.Va.) announced Wednesday that they had reached agreement on the new bill after Manchin refused to support Build Back Better last year.
It was a major breakthrough for Democrats, who were frustrated that most of President Joe Biden’s domestic agenda seemed doomed to fail. While the new deal isn’t nearly as big as the original Build Back Better legislation, it would still bring in hundreds of billions of dollars for some of the party’s long-sought priorities.
The legislation, dubbed the “Inflation Reduction Act,” consists of a handful of Build Back Better provisions that Manchin liked: It would require Medicare to lower drug manufacturers’ prescription prices, impose a minimum tax on businesses, and increase tax revenues by an investment in Enforcement of the Tax and Customs Administration.
Crucially, for Manchin, the bill would reduce the federal budget deficit by $300 billion. Democrats had previously wanted to use every cent of the increased tax revenue for new social spending, but have given up trying to win over Manchin. Manchin has said that narrowing the deficit could help with inflation; Former Treasury Secretary Lawrence Summers also reportedly told Manchin this week that the other provisions in the measure are not inflationary.
“Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together,” Manchin said in a lengthy statement.
Schumer said the Senate could vote on the new bill as soon as possible next week, as long as the Senate MP says parts of the bill will get through the Senate’s special “budget conciliation,” which would allow legislation to pass the Senate with only 50 votes instead of the usual 60 needed to avoid a filibuster.
McConnell had said in June that “there is no bipartisan” [chips bill] as long as the Democrats pursue a partisan appeasement bill.”
The statement seemed intended to prevent Republicans from backing the chips bill — which is pumping $50 billion into the domestic semiconductor industry — and to deter Manchin from reconciling.
Last week, Manchin warned his colleagues that he would never support new spending or taxes amid high inflation, and talks between him and Schumer reportedly failed. Meanwhile, a slimmed-down chips bill dragged through a series of procedural votes and the Senate voted free on Wednesday by a vote of 64 to 33, with 17 Republicans backing, including McConnell.
Then, after it was over, Manchin announced the breakthrough in reconciliation. The new bill still has a long way to go, as it’s unclear whether it will get the necessary support from the Senate and House Democrats, though Manchin was the biggest obstacle.
McConnell doesn’t seem happy.
“Democrats have already crushed American families with historic inflation,” McConnell said in a tweet Thursday night. “Now they want to pass massive tax hikes that will pound workers and destroy many thousands of American jobs.”
This article originally appeared on HuffPost and has been updated.
