WASHINGTON (NewsNation) — In a big win for President Joe Biden, Senate Democrats drove their election-year economic package to approval Sunday.
The passing Inflation Reduction Act was less than the president’s original $4 trillion proposal, but still a substantial compromise package made up of health care, climate change and deficit-reduction strategies, in hopes of tackling inflation and bringing down deficits.
After a marathon, 27-hour weekend session of debate, Democrats held united, 51-50, with Vice President Kamala Harris casting the tie-breaking vote.
“On this vote the yays are 50 the nays are 50. The Senate being equally divided the Vice President votes in the affirmative and the bill as amended is passed,” Harris said.
“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” Biden, who ended his COVID-19 isolation, said in a statement after the bill’s passage.
“The House should pass this as soon as possible and I look forward to signing it into law,” he continued.
“It’s been a long, tough and winding road, but at last, at last we have arrived,” said Senate Majority Leader Chuck Schumer, D-N.Y., ahead of final votes.
The long-awaited $740 billion bill would raise taxes on corporations, tackle climate change, lower prescription drug costs and reduce the deficit.
Democratic Senators who spoke to NewsNation just after the vote called it historic.
“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. To ensure that the floods and the fires that children are looking at on the television every single night is finally going to be addressed,” said Sen. Ed Markey, D-Mass.
Debate began Saturday and by early Sunday morning, Democrats had swatted down over a dozen Republican amendments designed to torpedo the legislation, including an amendment from Sen. Bernie Sanders, I-Vt., to provide a $300-a-month expanded child tax credit for the next five years.
Maverick Sen. Kyrsten Sinema, D-Ariz., forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates for their earnings. She also joined with other Western senators to win $4 billion to combat the region’s drought.
Several Democratic senators joined the GOP-led effort to exclude some firms from the new corporate minimum tax.
As the vote on final passage took place, several Democrats offered hugs to Sinema, who had been involved in a number of negotiations over the bill in the last several days that some worried could topple the package.
Despite unanimous GOP opposition, Democratic unity in the 50-50 chamber — buttressed by Vice President Kamala Harris’ tiebreaking vote — secured the victory three months from elections when congressional control is at stake.
“It will reduce inflation. It will lower prescription drug costs. It will fight climate change. It will close tax loopholes and it will reduce the deficit,” Schumer said of the package. “It will help every citizen in this country and make America a much better place.”
Senate Republicans remain disappointed in the bill and point to economic outlooks that say the bill might actually make inflation worse in the short term — and could raise taxes for all income brackets.
“The bill’s title shows you what bullshit it is. It’s an inflation increase act,” said Sen. Ben Sasse, R-Neb.
Republicans said the measure would undermine an economy that policymakers are struggling to keep from plummeting into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, 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,” Senate Minority Leader Mitch McConnell, R-Ky., argued. He said spending and tax increases in the legislation would eliminate jobs while having an insignificant impact on inflation and climate change.
Once seen as all but dead, the bill came back to life last week after Sen. Joe Manchin, D-W.Va. and Schumer reached a surprise deal that narrowed the legislation and renamed it the Inflation Reduction Act.
So what’s in the bill?
The highlights of the Inflation Reduction Act are some long-time Democratic priorities:
- Sets aside $300 billion for climate change infrastructure
- Allows the federal government to negotiate lower costs of drugs for Medicare recipients
- Sets a 15% mandatory minimum tax rate for corporations
- Provides $80 billion to the Internal Revenue Service to beef up the agency after years of cuts
- Keeps Biden’s pledge not to raise taxes on those earning less than $400,000 a year
The estimated $740 billion package is full of party priorities — including capping prescription drug costs at $2,000 out of pocket for seniors, helping Americans pay for private health insurance and what Democrats are calling the most substantial investment in history to fight climate change.
Almost half the money, $300 billion, will go toward paying down federal deficits.
It’s all paid for largely with new corporate taxes, including a 15% minimum tax on big corporations to ensure they don’t skip out on paying any taxes at all.
Called the “Inflation Reduction Act of 2022,” it’s not at all clear the 755-page bill will substantially ease inflationary pressures, though millions of Americans are expected to see some relief in health care and other costs.
The House is expected to vote next week.
The Associated Press and The Hill contributed to this report.