September 24, 2022


WASHINGTON — Democrats won a favorable decision from the Senate on their climate and health care package and were set to plunge into a marathon session of debates and amendment votes on Saturday, aiming to overcome the united Republican opposition and pass the bill as soon as this weekend.

Democratic leaders have lined up their caucus behind the bill, taking Sen. Kyrsten Sinema (D., Ariz.) on board after changes she requested. The package raises about $750 billion in taxes and funnels $430 billion into the largest program to address climate change in U.S. history and cuts some health care costs, among other priorities. Senate Democrats now believe they are on track to pass the bill within days, paving the way for the House to pass the bill on Friday, when it comes up for a recess vote.

On Saturday morning, Sen. Elizabeth MacDonough signed key elements of the Democrats’ package into law, including a measure that authorizes Medicare to negotiate drug prices and caps Medicare’s out-of-pocket costs of prescription drugs at $2,000 a year.

“Democrats received extremely good news,” Senate Majority Leader Chuck Schumer (D., N.Y.) said in a statement about the congressman’s action.

Mr. Schumer said the congressman did not accept a part of the bill, related to requiring drug companies to pay rebates if they raise prices faster than inflation for Medicare and private insurance.

The rebate requirements would apply only to Medicare and not the commercial market, a setback to Democrats’ efforts to rein in drug prices more broadly. He said the “inflation discount is more limited in scope” under the ruling. The rebate requirements will only apply to Medicare and not the commercial market, according to a person familiar with the matter.

Separately, Senate Finance Committee Chairman Ron Wyden (D., Ore.) said the congressman had cleared clean energy tax provisions, including those requiring workers to receive prevailing wages for certain clean energy projects.

To avoid the 60-vote threshold necessary for most legislation in the Senate and pass the bill with a simple majority, Democrats use a process called reconciliation. Reconciliation requires the bill’s measures to be directly related to the budget, and lawmakers rely on the MP to make a decision.

The first vote – a procedural measure to approve the bill for a possible vote – is scheduled for Saturday afternoon, followed by a period in which each party has up to 10 hours to debate. After that, the Senate takes up a series of unlimited rapid-fire amendments, in a process known as vote-a-rama that can stretch through the night and is often used to force political opponents to take hard-line positions.

In votes on the amendment, Republicans expected to pressure Democrats on policies including energy and immigration.

Republicans say the bill, known as the Deflation Act, will do little to fight inflation and contains damaging corporate tax increases that will trickle down to households. It would set a minimum corporate tax rate of 15% but protect the ability of at least some manufacturers to take accelerated depreciation and includes a 1% excise tax on share purchases. It also includes $45.6 billion for tax enforcement, in hopes of raising money from tax compliance.

The bill is the product of months of stop-and-go negotiations between Mr. Schumer and Sen. Joe Manchin (D., W.Va.), a centrist who had resisted much of his party’s broader agenda. If Democrats are successful, his passage would mark a victory for the party in the months before the midterm elections, which polls show will be a challenge for Democrats in large part because of public concern about inflation.

The bill would for the first time authorize Medicare to negotiate the prices of a limited set of drugs chosen from among those that account for the largest share of government spending. It would also cap out-of-pocket drug costs for Medicare beneficiaries at $2,000 a year starting in 2025, and mandate free vaccines for Medicare enrollees the following year. It would extend for three years, through 2025, subsidies enacted last year as part of the American Rescue Plan to help people buy health insurance through the Affordable Care Act, at a cost of $64 billion.

On climate change, the bill pumps money into wind and solar projects, along with batteries to store renewable energy, and also subsidizes technology to capture and store carbon dioxide emissions. Consumers will benefit from subsidies for certain windows, heat pumps and other energy-efficient products, as well as an extension of the $7,500 tax credit for the purchase of electric vehicles.

Builders, homeowners and small businesses could benefit from new capital inflows into so-called green banks, which will receive $20 billion to provide low-cost financing for energy-efficient products such as heat pumps, windows, solar panels, insulation and electric. vehicle charging stations.

The most important climate provisions are tax credits that would funnel billions of dollars into wind, solar and batteries that provide clean energy to the grid, according to the Rhodium Group, an independent research firm. The group estimated that the bill would reduce greenhouse gas emissions by 31% to 44% below 2005 levels in 2030, compared with 24% to 35% under current policy.

Write to Siobhan Hughes at siobhan.hughes@wsj.com

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