Democrats moved their election-year economic package toward Senate approval early Sunday, debating a measure that is less ambitious than President Joe Biden’s original domestic goals but touches on the party’s deep-seated dreams of slowing its warming planet, lowering pharmaceutical costs and taxing huge corporations.
The legislation passed its first test in the evenly divided chamber when Democrats overcame unanimous Republican opposition and voted to begin debate 51-50, thanks to a tiebreaker by Vice Speaker Kamala Harris. The House planned to return on Friday to vote on what Democrats hope will be final congressional approval.
“It will reduce inflation. It will reduce the cost of prescription drugs. It will fight climate change. It will close tax loopholes and reduce and reduce the deficit,” Senate Majority Leader Chuck Schumer, D-N.Y., said of the package. “It will help every citizen in this country and make America a much better place.”
Republicans said the measure would undermine an economy that policymakers are struggling to keep from falling into recession. They said the bill’s business taxes would hurt job creation and push up prices, making it harder for people to cope with the nation’s worst inflation since the 1980s.
“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” argued Senate Minority Leader Mitch McConnell, R-Ky. while having insignificant effects on inflation and climate change.
Nonpartisan analysts said the Democrats’ anti-inflation law would have little impact on rising consumer prices. The bill is just more than a tenth of the size of Biden’s original $3.5 trillion 10-year rainbow of progressive dreams, and the new package ditched universal preschool, paid family leave and expanded aid for childcare.
Even so, the measure gives Democrats a campaign-season showcase for action on coveted goals. It includes the largest federal effort on climate change — nearly $400 billion — and would give Medicare the power to negotiate drug prices and extend expiring subsidies that help 13 million Americans afford health insurance.
Biden’s original measure collapsed when conservative Sen. Joe Manchin, DW.Va., objected, saying it was too costly and would fuel inflation.
In a test imposed on all budget bills like this one, the Senate descended into an hour-long “vote-a-rama” of rapid-fire amendments. Each tested the ability of Democrats to hold together a compromise negotiated by Schumer, progressives, Manchin and uncharted centrist Sen. Kyrsten Sinema, D-Ariz.
Progressive Sen. Bernie Sander, I-Vt., offered amendments to further expand the health law’s benefits, and they were defeated. But most of the proposed changes were crafted by Republicans to derail the bill or force Democrats to vote on dangerous political ground.
A GOP proposal would force the Biden administration to continue Trump-era restrictions that cited the pandemic to reduce the flow of migrants at the Southwest border.
Earlier this year, Democrats facing tough re-election argued for such an extension, forcing the party to abandon its push for COVID-19 spending when Republicans linked the two issues. This time, with their much larger economic legislation at stake and the election looming, Democrats rallied against border controls.
Other GOP amendments would require more gas and oil leasing on federal lands and block the renewal of an oil tax that helps fund toxic waste cleanups. All were rejected on party-line votes. Republicans accused Democrats of being soft on border security and opening the door to higher energy and natural gas costs.
Before debate began Saturday, the bill’s prescription drug price restrictions were watered down by nonpartisan Senate Rep. Elizabeth MacDonough, who is raising questions about the chamber’s procedures, said a provision that would impose costly penalties on pharmacists whose price increases for private insurers exceed inflation should be gutted.
It was the bill’s main protection for the 180 million people with private health coverage through work or who buy it themselves. Under special procedures that would allow Democrats to pass their bill with a simple majority without the usual margin of 60 votes, its provisions must focus more on policy than dollar-and-cent budget changes.
But the thrust of their pharmaceutical price language remained. That included allowing Medicare to negotiate what it pays for drugs for its 64 million elderly beneficiaries, penalizing manufacturers for exceeding inflation for drugs sold to Medicare and capping beneficiaries’ out-of-pocket drug costs at $2,000 a year.
The bill also caps patient costs for insulin, the diabetes drug, at $35 a month.
The final cost of the measure was being recalculated to reflect late changes, but overall it would raise more than $700 billion over a decade. Funding would come from a minimum tax of 15% on a few companies with annual profits of more than $1 billion. a 1% tax on companies repurchasing their own stock boosted IRS tax collections and state savings from lower drug costs.
Sinema forced Democrats to abandon a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates on their profits. He also joined with other Western senators to win $4 billion to fight the region’s horrific drought.
On the energy and environment side, the Democratic compromise was most evident between progressives and Manchin, a champion of fossil fuels and his state’s coal industry.
Efforts to promote clean energy will be boosted by tax credits for the purchase of electric vehicles and the construction of solar panels and wind turbines. There would be home energy rebates, funds to build factories that make clean energy technology, and money to promote climate-friendly agricultural practices and reduce pollution in minority communities.
Manchin won billions to help power plants reduce carbon emissions and language requiring more state auctions for oil drilling in federal waters. Party leaders have also promised to push separate legislation this fall to speed up permits for energy projects, which Manchin wants to include a nearly completed natural gas pipeline in his state.