WASHINGTON — President Joe Biden on Thursday said his support for the “historic” inflation-fighting deal reached by Senate Majority Leader Chuck Schumer and Democratic Sen. Joe Manchin, a sweeping health care and of climate change that had eluded the White House and seemed all but lost.
Biden said the bill would be a “godsend” for American families.
“This bill would be the most important piece of legislation in history to address the climate crisis,” Biden said. He said it would also lower health care costs for millions of Americans who buy their own health insurance under the Affordable Care Act.
Biden promised the package would not raise taxes for anyone earning less than $400,000 a year. Instead, the minimum corporate tax of 15% will help finance the new costs, with a deficit reduction surcharge.
He acknowledged the end product was a compromise, but was optimistic it would win congressional support.
“My plea is this: put politics aside. Do it,” Biden said. “We should pass this.
The $739 billion package, not as much as Biden once envisioned, remains a potentially remarkable achievement for the party, with long-sought goals to tackle health care and the climate, while raising taxes on high earners. and big business and reducing the federal debt.
The Senate is expected to vote on the far-reaching measure next week, handing the president and his party a surprise victory ahead of a November election in which their congressional control is in jeopardy. A House vote would follow, possibly later in August, with unanimous Republican opposition in both houses seemingly certain.
Senate Majority Leader Chuck Schumer told his fellow Senate Democrats that they now have the opportunity to achieve two “extremely important” priorities on health care and climate change, if they stick together. elbows and approved of a deal he had brokered with Manchin.
Schumer spoke at a private meeting after the surprising reversal of an expansive deal he and Manchin struck that had eluded them for months. The words of the Democratic leader were relayed by a person close to the meeting and granted anonymity to discuss it.
Manchin called the billion package a “win-win” which shouldn’t come as such a big surprise despite the long months of recurring talks. He bristled at suggestions he had left his own party hanging when he refused to back an earlier, broader bill.
“I never gave up on anything in my life,” Manchin told reporters via video chat because he is self-isolating with COVID-19. Manchin called it a “good bill” that would benefit the country. “This is a Democrat and Republican bill.″
But the bill is not.
Schumer warned his colleagues in the 50-50 Senate that the final passage will be difficult. With fierce opposition from the GOP, Democrats have no voice to spare, relying on their own wafer-thin majority.
A key vote, Sen. Kyrsten Sinema, D-Arizona, was still reviewing the deal, spokeswoman Hannah Hurley said. Sinema backed Manchin last year by insisting on making the legislation cheaper, but opposed proposals to raise tax rates, and the spokeswoman fired a reporter for her comments last year in favor of a minimum corporate tax.
Manchin said on Thursday he had not told Sinema about the new compromise.
Just hours before Wednesday night’s announcement, Schumer, DN.Y., and Manchin, DW.Va., appeared at loggerheads and headed for a much narrower package limited — at Manchin’s insistence — to the reducing pharmaceutical prices and extending federal health care subsidies. Earlier Wednesday, many Democrats said they were virtually resigned to the more modest legislation.
There was no immediate explanation for Manchin’s abrupt willingness to back the bolder new measure. Since last year, he has used his pivotal 50-50 Senate vote to force Biden and the Democrats to abandon far more ambitious and costly versions. He dragged them through months of negotiations in which concessions by leaders to roll back the legislation proved fruitless, antagonizing the White House and most congressional Democrats.
Tellingly, Democrats called the 725-page measure “The Inflation Reduction Act of 2022” because of provisions to help Americans deal with this year’s dramatic rise in consumer costs. Polls show that inflation, epitomized by gasoline prices that rose above $5 a gallon before falling, was the top concern among voters. For months, Manchin’s opposition to larger proposals has been based in part on his fear that they will fuel inflation.
Besides inflation, the measure seemed to offer something to many Democratic voters.
He dangled tax hikes on the wealthy and big business and environmental initiatives for progressives. And Manchin, an advocate for fossil fuels produced by his state, said the bill would invest in clean energy and carbon-based technologies while reducing methane and carbon emissions.
The measure would reduce carbon emissions by around 40% by 2030, Schumer and Manchin said. While that would miss Biden’s 50% target, that cut, the measure’s climate spending and the jobs it would create are “a big deal,” said Sen. Jeff Merkley, D-Ore., an advocate of the environment who had been thwarted by the absence of these provisions so far.
The overall proposal is far less ambitious than the $3.5 trillion package Biden asked Democrats to push through Congress last year, and the slimmed-down version of around $2 trillion the House approved in last November after Manchin insisted on reducing it. Even then, Manchin shot down that smaller measure the following month, saying it would stoke inflation and was laden with budget gimmicks.
Democrats said their proposal would generate $739 billion in new revenue over the decade, including $313 billion from a 15% minimum corporate tax. They said it would affect about 200 of the nation’s largest companies, with profits exceeding $1 billion, which are currently paying below the current rate of 21% of companies.
The deal also contains $288 billion that the government would save by reducing pharmaceutical prices. These provisions would require Medicare to begin negotiating prices for a modest number of drugs, pay rebates to Medicare if their price increases exceed inflation, and limit beneficiaries of this program to $2,000 in annual expenditures.
The deal also claims to earn $124 billion from tougher IRS tax enforcement and $14 billion from taxing certain “interest-bearing” profits made by partners in entities such as private equity or hedge funds.
The measure would spend $369 billion on energy and climate change initiatives. These include consumption tax credits and rebates for the purchase of clean-energy vehicles and to encourage home energy efficiency; tax credits for solar panel manufacturers; $30 billion in grants and loans to utilities and states to gradually convert to clean energy; and $27 billion to reduce emissions, especially in low-income areas.
It would also seek $64 billion to extend federal subsidies for some people with private health insurance for three years. These grants, which reduce people’s premiums, would otherwise expire at the end of the year.
That would leave $306 billion for debt reduction, an effort Manchin demanded. While this is a substantial sum, it is only a small fraction of the trillions in accumulated deficits the government is expected to rack up over the next decade.
If Democrats can keep their troops together, GOP opposition wouldn’t matter. Democrats can win if they lose no more than four votes in the House and remain solidly united in the Senate 50-50, where Vice President Kamala Harris can cast the deciding vote. They are using a special process that will allow them to pass the bill without reaching the 60 votes required for most laws out there. The chamber parliamentarian must verify that the bill does not violate the chamber’s budget procedures, a review currently underway.
AP reporters Matthew Daly, Will Weissert, Kevin Freking, Seung Min Kim and Zeke Miller contributed to this report.
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