WASHINGTON (AP) — A landmark Democratic economic bill perched on the edge of House passage on Friday, putting President Joe Biden on the brink of a triumph back from the dead over his climate, health and fiscal goals that could energize his party. November elections.
Democrats were poised to force the measure through the tightly divided House on Friday in the face of strong Republican opposition. They used similar party unity and Vice President Kamala Harris’ decisive vote on Sunday to ram the measure through the Senate 50-50.
The package is only a shadow of Biden’s initial vision and was only produced after a year of often bitter infighting between party leaders, progressives and centrists led by Sen. Joe Manchin, DW .Va., empowered by the equal division of this House. In the end, Democrats hungry for victory forged a compromise on sustainable goals like containing pharmaceutical costs, taxing big business and, most importantly, cutting carbon emissions. They hope to show they can wring achievements from an often crippled Washington that alienates many voters.
“Climate is a health issue. It’s a question of jobs. It’s a matter of security. And it’s about values for us,” House Speaker Nancy Pelosi, D-California, told reporters this week. “I want more, of course, we always want more, but that’s a lot. “
The pillar of the bill is about $375 billion over 10 years to encourage industry and consumers to switch from carbon emissions to cleaner forms of energy, hailed by experts as the biggest climate investment never realized by Congress. This includes an additional $4 billion to deal with the catastrophic drought in the West.
Spending, tax credits and loans would bolster technologies such as solar panels, consumer efforts to improve the energy efficiency of homes, emission reduction equipment for coal and gas power plants and air pollution controls for farms, ports and low-income communities.
In two of the top Democratic health care priorities, an additional $64 billion would help 13 million people pay premiums over the next three years for private health insurance. Medicare would gain the power to negotiate its costs for pharmaceuticals, initially in 2026 for just 10 drugs. Prescription fees for Medicare beneficiaries 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 generate about $740 billion in revenue over the decade, with more than a third coming from government savings from lower drug prices. More would come from a corporate tax hike of about $1 billion, levies on companies that buy back their own stock, and stronger IRS tax collections. About $300 billion would remain to cover budget shortfalls, a fraction of the $16 trillion projected total for the period.
Republicans say the legislation’s tax hikes will force businesses to raise prices, worsening the nation’s fight with its worst inflation since 1981 hurting Democrats’ election prospects. Nonpartisan analysts say the measure will have a negligible impact on inflation one way or the other.
Echoing other culture war themes, the GOP has criticized initiatives such as tax breaks for clean energy and electric vehicles as unnecessary liberal daydreams. “If the Green New Deal and corporate welfare had a baby, it would look like this,” said Rep. Kevin Brady of Texas, the House Ways and Means Committee’s top Republican.
Republicans say the Democrats’ plan to boost the IRS budget, aimed at collecting about $120 billion in unpaid taxes, envisions 87,000 officers going after families. Democrats called fault, saying their $80 billion increase in the IRS budget would be to replace waves of retirees, not just agents, and upgrade equipment, and say families and small businesses gain less than $400,000 per year would not be targeted.
The GOP also says the bill would raise taxes for low- and middle-income families. An analysis by the nonpartisan Joint Committee on Taxation of Congress, which did not include the bill’s tax breaks for health care and energy, found that corporate tax increases would marginally affect those taxpayers, in part due to falling stock prices and wages.
The bill caps three fertile months in which Congress has voted to improve health benefits for veterans, bolster the semiconductor industry, moderately toughen gun restrictions for young buyers, fund the Ukraine’s war with Russia and adding Finland and Sweden to 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 dominated voters’ attention. Although record gasoline prices have fallen, Biden’s popularity is dangerously low and the midterm elections have a consistent history of career-ending lawmakers from the party that holds the White House.
The Democrats’ economic bill took root in early 2021, after Congress approved a $1.9 trillion measure against GOP opposition to tackle the pandemic-induced economic slowdown. Emboldened, the new president and his party went further.
They initially produced an ambitious 10-year, $3.5 trillion environmental and social plan they called Build Back Better. It included free pre-kindergarten, paid family and medical leave, expanded health benefits, increases for education and housing, and an easing of immigration restrictions. He sought to reverse Trump-era tax breaks for the wealthy and corporations and proposed $555 billion for climate efforts, well above the resources of Friday’s legislation.
With Manchin opposed to those amounts, it was whittled down to a roughly $2 trillion measure that Democrats pushed through the House in November. Just before Christmas, Manchin unexpectedly sunk that bill, citing fears of inflation and international uncertainty and earning slaps from his exasperated fellow Democrats on Capitol Hill and the White House.
With intermittent closed-door talks between Manchin and Senate Majority Leader Chuck Schumer, D.N.Y., apparently dying, the two lawmakers shocked Washington and announced an agreement last month on the new streamlined package.
Manchin has won billions for carbon capture technology for the fossil fuel industries he champions, as well as procedures for more oil drilling on federal lands and promises of faster permits for energy projects.
Centrist Sen. Kyrsten Sinema, D-Arizona, also used her influence for late concessions, eliminating higher taxes slated on hedge fund managers and helping win drought funds.