Senate Democrats approve their big climate and healthcare bill with a thumbs up from Manchin and Sinema

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Chuck Schumer
Senate Majority Leader Chuck Schumer (D-NY) gives the thumbs up as he leaves the Senate Chamber after passage of the Inflation Reduction Act at the U.S. Capitol August 7, 2022 in Washington, DC.Drew Angerer/Getty Images
  • Senate Democrats passed their party's major economic plan Sunday afternoon.

  • The House is now expected to vote on the resurrected version of Biden's economic agenda on Friday.

  • No Senate Republican supported the measure.

The Senate approved a climate, healthcare, and tax package assembled by Democrats on Sunday afternoon, bringing the party one step closer to delivering on President Joe Biden's most significant domestic legislative achievement yet on combating the climate emergency, reining in the cost of prescription drugs, raising taxes on large profitable companies that pay nothing to the federal government and reducing the budget deficit.

The vote was split 50-50 with Vice President Kamala Harris casting the tie-breaking vote. Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, a pair of longtime holdouts, threw their support behind the bill carrying the centerpiece of Biden's economic agenda. It heads to the House for a Friday vote, which will send it to Biden's desk for his signature.

"It's been a long tough and winding road," Senate Majority Leader Chuck Schumer said before the final vote. "The time has come to pass this historic bill."

"Here's what's on offer: reducing health care costs, reducing climate emissions, reducing energy costs and reducing the number of wealthy tax cheats," Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee told Insider. "That's what we set out to do."

Democrats beat back a barrage of three dozen mostly GOP amendments on immigration, taxes, energy, and healthcare aimed at altering the bill in a 14 hour marathon voting session. Democratic senators banded together to shield the package from any new provisions that would jeopardize its fragile support. In addition, Sen. Bernie Sanders of Vermont introduced amendments on prescription drug negotiations and reinstalling the enhanced child tax credit that Democrats shot down.

Sanders pummeled it as the "so-called Inflation Reduction Act" late Saturday evening, arguing the bill had been watered down to the point the measure had "turned its back on working families." But he called it "a step forward" on Sunday and ultimately voted for it.

During the "vote-a-rama," Senate Republicans were successful in stripping a $35 federal limit on insulin costs for Americans carrying private health insurance. The provision establishing a cap on insulin costs for Medicare beneficiaries was left untouched.

There was an hours-long holdup on Sunday when Sinema considered backing a rival GOP amendment from Sen. John Thune of South Dakota intended to set up a carveout for private equity subsidiaries from the 15% corporate minimum tax. Manchin was opposed to it, per a person briefed on the negotiations. Sinema, Manchin, and Thune eventually struck a deal that included it.

The package was drafted between Schumer and Manchin over the course of two months that saw the secretive negotiations collapse once, nearly sounding the death knell for the Democratic agenda. But Manchin backtracked and struck a surprise deal in late July on a measure much larger than many Democrats thought possible.

The 755-page bill would empower Medicare to negotiate the price of prescription drugs, establish $370 billion in clean-energy tax credits to incentivize the development of renewable power sources, and extend financial assistance so a larger set of Americans can purchase health coverage under the Affordable Care Act for three more years.

It amounts to the largest federal investment to combat the climate crisis in US history, putting the nation on course to curb emissions by 40% below 2005 levels by the end of the decade. "This is a day that will always live as the moment where the United States took over the leadership of the fight to lower the thermostat, not just in our own country but around the world," Sen. Ed Markey of Massachusetts said.

The legislation is paid for with a 15% domestic minimum tax on large, profitable corporations paired with a 1% excise tax on stock buybacks. It sets aside $80 billion for stepped-up IRS enforcement and is projected to shrink the federal deficit by $300 billion.

Republicans lined up against it as a liberal boondoggle. In a statement, Sen. Lindsay Graham of South Carolina called it "another massive tax and spend bill that will be a disaster for a weak economy and make the lives of suffering Americans worse."

The end of a turbulent stretch

Schumer, Biden and Pelosi
President Joe Biden, center, along with Senate Majority Leader Chuck Schumer, left, and House Speaker Nancy Pelosi at the Capitol on January 6, 2022 in Washington, DC.Photo by Stefani Reynolds-Pool/Getty Images

It caps a turbulent stretch for Democrats, who labored and often struggled to secure pieces of Biden's domestic agenda that were first unveiled in spring 2021. Biden started out his presidency laying out a two-part plan to strengthen the nation's physical infrastructure and social safety net for families, pledging to attack inequality head-on.

Senate Democrats later pursued a $3.5 trillion spending blueprint to overhaul the economy, but quickly crashed into resistance from the fiscally austere, moderate wing of the party. The party employed budget reconciliation to approve the bill, a maneuver allowing them to sidestep GOP resistance with only a simple-majority using Harris's tie-breaking vote. But that meant Democrats always had few votes to spare in the House and none in the Senate.

Manchin and Sinema quickly rejected that amount in federal spending as sky-high, setting off a prolonged back-and-forth that tested the narrow Democratic control of the Senate and the House through the fall. Democrats struggled to understand the pair's specific demands for the bill.

Manchin later killed the $2 trillion House-approved Build Back Better Act in December, arguing he didn't want to worsen inflation. Democratic efforts to revive a smaller bill subsided in the spring until Schumer started meeting with Manchin on scaling back the measure in April.

But it required Democrats to make painful concessions on many of their major social priorities. The package does not extend the Biden child tax credit that once provided monthly checks to families. It also ejected affordable childcare, a national paid and medical leave program, and affordable housing among other initiatives.

In a press conference on Sunday, Schumer pledged that Democrats would return to many of those issues "with a vengeance" in the fall.

This was the most recent legislative victory for Senate Democrats. The party has also secured bipartisan efforts on gun reform, improving veterans' healthcare, and strengthening the domestic semiconductor industry.

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