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After more than a year of “Building Back Better” talks, Senate Majority Leader Chuck Schumer and Sen. Joe Manchin announced an agreement on a much-reduced reconciliation program on Wednesday.
At $433 billion in spending, the package spends less than a sixth of the roughly $3 trillion giant bill Democrats were discussing this time last year. It includes far fewer provisions but, according to Democrats, it will generate $739 billion in tax revenue.
“The Inflation Reduction Act of 2022 will make a historic deficit reduction installment to fight inflation, invest in domestic energy generation and manufacturing, and cut carbon emissions by about 40 percent. by 2030,” Schumer, DN.Y., and Manchin, DW.Va., said in a joint statement Wednesday, using the bill’s new official name.
“The bill will finally allow Medicare to negotiate prescription drugs and reduce health care costs for millions of Americans,” they added.
MANCHIN AND SCHUMER AGREE ON A REALLY SMALL VERSION OF BUILD BACK BETTER
Democrats had previously agreed to provisions of the bill that would expand parts of the Affordable Care Act (ACA), also known as ObamaCare, and aimed to reduce prescription drug prices.
According to a summary of the bill released Wednesday, the agreement would extend the ACA through 2025 and allow Medicare to negotiate prescription drug prices. Expanding the ACA would cost $64 billion, Democrats say, and prescription drug reform would save the government $288 billion.
Where Democrats were previously stuck — until Wednesday — was on tax, energy and climate provisions. Manchin, from an energy-producing state, is often at odds with his own party on climate policy. Moreover, with his deep concerns about inflation and the economy, the moderate senator has repeatedly said that Congress must ensure that any economic policy it implements does no harm.
HOUSE REPUBLICANS FILE TO REJECT CHINA COMPETITION BILL AFTER MANCHIN AND SCHUMER ACCEPT RECONCILIATION AGREEMENT
But according to the bill’s summary, the Manchin-Schumer package would spend a combined $369 billion on energy and climate efforts. And it includes a minimum corporate tax of 15% for companies worth more than $1 billion, which is expected to bring in $313 billion; increased IRS tax enforcement, which is expected to bring in $124 billion; and that will close the carried interest loophole, estimated at $14 billion.
In addition to protesting the tax hike, Republicans are likely to criticize many provisions of the clean energy and environment bill. Among them, nearly $1.9 billion for a “neighborhood access and equity grant program.” This money would be available, among other things, to help repair areas with “gaps in tree canopy coverage” in underserved communities.
Another provision of the bill will provide $1.5 billion “for tree planting and related activities, with priority for projects that benefit underserved populations and areas.”
Yet another part of the bill provides $403 million for IRS expenses, “including the purchase and lease of passenger motor vehicles.”
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“In a recession, Democrats raise taxes, kill jobs, crush savings, and choke off American energy,” GOP Sen. John Barrasso, R-Wyo., said of the bill. “Plus, they’re oversizing the IRS to attack working families. and small businesses. Their tax plan also includes giving electric vehicle tax breaks and ObamaCare grants to people earning more than $100,000.”
Barrasso added, “This reckless fiscal and spending spree will impose even higher prices, more tax hikes and more pain on working families than they are already feeling.”
Fox News’ Rachel Paik contributed to this report.