He’s been preparing for over a year and has had a lot of ups and downs. Now, a Democratic economic package focused on climate and health care is facing hurdles, but appears to be heading towards Congress passing the party line next month.
The endorsement would allow President Joe Biden and his party to claim triumph on top priorities heading into the November election. They haven’t forgotten that they nearly approved a much grander version of the bill last year, only to see Sen. Joe Manchin, DW.Va., one of their most conservative and contrarian members , torpedoing her at the eleventh hour.
This time, Senate Majority Leader Chuck Schumer, DN.Y., worked out a compromise with Manchin, to everyone’s surprise, turning West Virginia from pariah to partner. The measure is more modest than previous versions, but still ticks boxes on issues that stun Democrats.
Here’s what they’re up against:
WHAT’S IN IT?
The measure would generate $739 billion in revenue over 10 years and spend $433 billion. There would be over $300 billion left to reduce federal deficits.
These are significant cuts in red ink. But they’re tiny compared to the $16 trillion in new debt that the Congressional Budget Office’s nonpartisan estimates will rack up over the next decade.
The package would save consumers and the government money by reducing prescription drug prices, and it would subsidize private health insurance for millions of people. This would strengthen the IRS budget so that the tax agency could collect more unpaid taxes.
The plan would promote clean energy and offshore energy drilling, a balance demanded by Manchin, a champion of fossil fuels. It would also collect new taxes from the biggest corporations and wealthy hedge fund owners.
It’s a fraction of the $3.5 trillion package Biden offered at the start of his presidency, which also included money for initiatives like paid family leave and universal early education. It is also lower than the roughly $2 trillion alternative the House passed last November after Manchin demanded cuts and then derailed the deal anyway, citing inflation fears.
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IT’S NOW CALLED THE “INFLATION REDUCTION ACT”, BUT…
…will he? It is certainly possible, but there are dissenters.
First, a little background.
According to a measure of inflation that the Federal Reserve studies closely, prices jumped 6.8% in June from a year ago, the biggest increase in four decades. This followed government figures showing the economy contracted again in the last quarter, fueling recession worries.
“Improved tax collection, drug savings and deficit reduction would put downward pressure on inflation,” the Committee for a Responsible Federal Budget said on Friday. In what passes for a rave review, the bipartisan budget watchdog called the legislation “just the kind of package lawmakers should put in place to help the economy in a number of ways.”
“Cutting the deficit almost always reduces inflation,” Jason Furman, an economics professor at Harvard University and former economic adviser to President Barack Obama, wrote in the Wall Street Journal on Friday. He said the measure “would also reduce inflation by slowing the growth of prescription drug prices.
A more sober assessment came from the University of Pennsylvania’s Penn Wharton budget model, which analyzes economic issues.
“The law would very slightly increase inflation until 2024 and decrease inflation thereafter,” the group wrote on Friday. “These point estimates are statistically indistinguishable from zero, indicating low confidence in the impact of the legislation on inflation.”
A chorus of Republicans said the Democrats’ bill would be largely damaging. Senate Minority Leader Mitch McConnell, R-Ky., calls it “a giant package of huge, job-killing new tax hikes, Green New Deal madness that will kill American energy and the prescription drug socialism that will leave us with fewer new drugs.”
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UPCOMING CHANGES
The 725-page measure will likely change somewhat again.
Schumer said last week that Democrats plan to add language aimed at reducing patient costs for insulin, the diabetes drug that can cost hundreds of dollars a month.
Cutting insulin prices was one of the highlights of Democrats’ biggest package last year, including a $35 monthly cap for patients who get the drug through Medicare or private insurers. But that fell this year when the measure was reduced.
Meaning. Jeanne Shaheen, DN.H., and Susan Collins, R-Maine, produced a bill capping the price of insulin. Prospects for the measure dimmed after the nonpartisan Congressional Budget Office estimated it would cost about $23 billion and would actually raise the price of insulin. The two lawmakers also failed to produce the 10 Republicans that would be needed to succeed in the 50-50 Senate, where most bills require 60 votes.
It’s unclear what the Democrats’ new language on insulin would do. Previous language that required private insurers to set a monthly insulin cap of $35 may violate chamber rules, which only allow provisions that primarily affect the federal budget.
Additionally, as part of the process Democrats are using to push the measure through the chamber by a simple majority, with Vice President Kamala Harris’s deciding vote, he would face several amendments in a voting session. which can go on all night, and there’s no telling if some will pass.
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OUTLOOK
Every Republican seems ready to vote “no”.
Democrats will need their 50 votes in the Senate, where the unpredictable Sen. Kyrsten Sinema, D-Arizona, has yet to express her views.
Democrats can’t lose more than four votes in the House to succeed. Speaker Nancy Pelosi, D-California, said Friday that when the Senate approves the package, “we will pass it.”
Schumer wants the move to the Senate next week. He acknowledged that the timing “is going to be difficult” because it will take time for the House parliamentarian to make sure the bill complies with Senate rules.
It will also take luck. The 50 Democrats, including the two independents backing them, will need to be healthy enough to run and vote.
It is not guaranteed. The latest highly contagious variant of COVID-19 is spreading across the country. And the chamber has 33 senators aged 70 or older, including 19 Democrats.
Sen. Richard Durbin, D-Ill., 77, was the last senator to announce he had contracted the disease. Sen. Patrick Leahy, D-Vt., 82, was out after hip surgery. Both are expected next week.
The Independent Gt