Senate Democrats close to passage of deflation bill in overnight marathon

Washington — Democrats led their election year financial package for Senate approval early Sunday, debating a measure less ambitious than President Biden’s original domestic vision but touching on deep-seated partisan dreams of slowing global warming, curbing pharmaceutical costs and taxing huge corporations.

Debate began Saturday, and by sunrise Sunday, Democrats had squelched a dozen Republican attempts to torpedo the legislation, with no clear end in sight. Despite unanimous GOP opposition, the 50-50 Democratic unity in the House — bolstered by Vice Speaker Kamala Harris’ tie — showed the party was on track for a morale-boosting victory three months before the election, when congressional control is at stake.

The House planned to briefly return from summer recess on Friday for what Democrats hope will be final congressional approval.

“I think it will pass,” Mr. Biden told reporters as he did left the White House early Sunday to go to Rehoboth Beach, Delaware, ending his COVID-19 quarantine. The House appeared on track to provide final congressional approval when it briefly returns from summer recess on Friday.

“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- New York. . “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 of Kentucky. He said the spending and tax increases in the legislation would eliminate jobs while having a negligible impact on inflation and climate change.

Nonpartisan analysts said the Democrats’ “Inflation Reduction Act” would have little effect 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 ambitions and abandons his proposals for universal preschool, paid family leave and expanded child care assistance. children.

Even so, the new measure gives Democrats a campaign-season window to act on coveted goals. It includes the largest federal climate change effort — nearly $400 billion — gives Medicare the power to negotiate drug prices and extends expiring subsidies that help 13 million people afford health insurance.

Mr. Biden’s original measure collapsed when conservative Democratic Senator Joe Manchin of West Virginia objected, saying it was too costly and would fuel inflation.

In a test imposed on all budget bills like this one, the Senate plunged into an hour-long “vote-a-rama” of rapid-fire amendments. Each tested Democrats’ ability to hold together a compromise negotiated by Schumer, progressives, Manchin and the elusive centrist Democrat Sen. Kirsten Sinema of Arizona.

Progressive Sen. Bernie Sanders of Vermont offered amendments to further expand the health law’s benefits, and those efforts 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 the debate began on Saturday, the bill’s prescription drug price restrictions diluted by the non-partisan member of the Senate. Elizabeth MacDonough, who is raising questions about the chamber’s procedures, said a provision that would impose costly penalties on drugmakers whose price increases for private insurers exceed inflation should fall.

It was the bill’s main protection for the 180 million people with private health coverage they get through work or buy 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 budget numbers in dollars and cents than on policy 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 recipients, penalizing manufacturers for exceeding inflation for pharmaceuticals sold to Medicare, and capping beneficiaries’ out-of-pocket drug costs at $2,000 a year.

Democrats retained a provision in the bill that would cap patient costs for insulin, the expensive diabetes drug, at $35 a month. But that proposal ran afoul of a lawmaker’s ruling that it could not be included, and Democrats failed to muster the 60 votes needed to override the rule, on a 57-43 vote Sunday morning.

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. The money would come from a 15% minimum tax on a handful of companies with annual profits of more than $1 billion, a 1% tax on companies that buy back their own stock, boosted tax collections and government 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 drought.

On the energy and environment side, the compromise was most apparent between progressives and Manchin, a champion of fossil fuels and his state’s coal industry.

Clean energy will be promoted with 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.