WASHINGTON (AP) — A flagship Democratic economic bill that sat on the edge of the House passage Friday, putting President Joe Biden on the brink of a back-of-the-death triumph over his climate, health and state tax targets that could help his party move forward from the November elections.
Democrats were poised to force the measure through the narrowly divided House Friday over solid Republican opposition. They used a similar party unit and the casting vote of Vice President Kamala Harris on Sunday to pass the measure through the 50-50 Senate.
The package is only a shadow of Biden’s original vision and was only produced after a year of often bitter infighting between party leaders, progressives and centrists led by Senator Joe Manchin, DW.Va., energized by the even split of that chamber. In the end, Democrats thirsty to declare victory forged a compromise on meeting goals like curbing pharmaceutical costs, taxing large corporations, and most importantly, cutting carbon emissions. They hope to show that they can force performance out of an often erratically stalled Washington that alienates many voters.
“Climate is a health problem. It’s a job issue. It’s a security issue. And it’s a values issue for us,” House Speaker Nancy Pelosi, D-Calif., told reporters this week. “I want more, of course, we always want more, but this is a great deal.”
The bill’s pillar is about $375 billion over 10 years to encourage industry and consumers to switch from carbon-emitting to cleaner forms of energy, hailed by experts as Congress’s largest climate investment ever. That includes $4 billion added to help cope with the catastrophic drought in the West.
Expenses, tax credits and loans would support technology such as solar panels, consumer efforts to improve the energy efficiency of their homes, emission control equipment for coal and gas-fired power plants, and air pollution controls for farms, ports and low-income communities.
In some of the top Democratic health priorities, an additional $64 billion would help 13 million people pay premiums for privately purchased health insurance over the next three years. Medicare would be given the power to negotiate drug costs, initially in 2026 for just 10 drugs. Medicare beneficiaries’ over-the-counter prescription costs would be capped at $2,000 starting in 2025, and starting next year they would pay no more than $35 a month for insulin, the expensive diabetes drug.
The bill would bring in about $740 billion in revenue over the decade, more than a third of government savings from lower drug prices. More would come from higher corporate taxes of some $1 billion, levies on companies buying back their own shares and stronger tax collections from the IRS. There would still be about $300 billion left to cover the budget deficits, a fraction of the projected total of $16 trillion for the period.
Republicans say the tax increases from the legislation will force companies to raise prices, worsening the country’s struggle with its worst inflation since 1981, hurting Democrats’ election prospects. Unbiased analysts say the measure will somehow have a negligible impact on inflation.
Echoing other cultural war themes, the GOP has criticized initiatives such as clean energy tax breaks and electric vehicles as wasteful liberal daydreams. “If the Green New Deal and corporate welfare had a baby, this is what it would look like,” said Texas Representative Kevin Brady, the chief Republican on the House Ways and Means Committee.
Republicans say the Democrats’ plan to expand the IRS budget, aimed at collecting about $120 billion in unpaid taxes, foresees 87,000 agents coming after families. Called wrong, Democrats said their $80 billion IRS budget increase would be to replace waves of retirees, not just cops, and upgrade equipment, saying families and small businesses earning less than $400,000 a year shouldn’t. would be the target.
The GOP also says the bill would increase taxes on lower- and middle-income families. An analysis by Congress’ impartial Joint Taxation Committee, which excludes the bill’s health care and energy tax breaks, estimated that the corporate tax hikes would marginally affect taxpayers, in part due to lower stock prices and wages.
The bill ends a fruitful three-month period in which Congress voted to improve veterans’ health benefits, girdle the semiconductor industry, moderately strengthen gun restrictions for younger buyers, fund Ukraine’s war with Russia, and add Finland and Sweden. to join NATO. All passed with bipartisan support, suggesting Republicans also want to show their productive side.
It’s unclear whether voters will reward Democrats for the legislation after months of painfully high inflation that has dominated voters’ attention. While record gasoline prices have fallen, Biden’s popularity is dangling precariously low and midterm elections have a consistent history of ending the careers of lawmakers from the party that owns the White House.
The Democrats’ economic bill had its roots in early 2021, after Congress passed a $1.9 trillion measure on the GOP’s opposition to combat the pandemic-induced economic downturn. Encouraged, the new president and his party reached out.
Initially, they produced an ambitious 10-year, $3.5 trillion environmental and social plan that they called Build Back Better. It included free kindergarten, paid family and medical leave, expanded Medicare benefits, increases in education and housing, and an easing of immigration restrictions. It sought to roll back Trump-era tax breaks for the rich and corporations and proposed $555 billion for climate efforts, well above funds in Friday’s legislation.
With Manchin at those amounts, it was slashed to a roughly $2 trillion measure that Democrats passed through the House in November. Just before Christmas, Manchin unexpectedly lowered that bill, citing fears of inflation and international uncertainty and earning bricks from exasperated fellow Democrats from Capitol Hill and the White House.
With on-and-off closed-door talks between Manchin and Senate leader Chuck Schumer, DN.Y., seemingly dying, the two lawmakers shocked Washington, announcing agreement on the new, watered-down package last month.
Manchin won billions for carbon capture technology for the fossil fuel industries he champions, plus procedures for more oil drilling on federal lands and promises for faster energy projects.
Centrist Sen. Kyrsten Sinema, D-Ariz., also used her leverage for late concessions, eliminating planned higher taxes on hedge fund managers and helping the drought funds win.
