The package is the product of painstaking negotiations and will give Democrats a chance to achieve key policy goals before the upcoming midterm elections. Senate Democrats use a special process to pass the package without Republican votes.
Once the legislation passes in the Senate, it will then need House approval before President Joe Biden can sign it into law.
The Senate is expected to hold its first procedural vote to advance the bill sometime on Saturday. A simple majority is required to proceed with the proposal.
The vote has yet to be set, but Senate Majority Leader Chuck Schumer said Saturday shortly after noon ET that “in a few hours” the chamber will officially begin the process of passing the inflation-reduction law.
Democrats control the narrowest possible majority and just 50 seats in the Senate, but they are expected to unite to push the bill in an initial procedural vote.
In order for a bill to pass through the settlement process, the package must comply with a strict set of budget rules.
The senator has to decide whether provisions in the bill meet the rules to allow Democrats to use the anti-stall budget process to pass legislation along partisan lines.
Schumer announced Saturday that after undergoing parliamentary review, the bill “remains largely untouched.”
“The bill, when passed, will meet all of our goals — combating climate change, lowering health care costs, closing tax loopholes that are abused by the wealthy, and reducing the deficit,” the New York Democrat said.
In a key ruling, Parliamentarian Elizabeth McDonough allowed a key component of Democrats’ prescription drug pricing plans to go ahead — giving Medicare the ability to negotiate prices for some first-time prescription drugs.
But MacDonough trimmed another provision aimed at lowering drug prices — sanctioning drug companies if they raise prices faster than inflation. Democrats wanted to apply the measure to Medicare and the private insurance market. But the parliamentarian decided the inflation cap could only apply to Medicare, a Democratic aide said.
Democrats are waiting for new cost estimates from the nonpartisan Congressional Budget Office to see how the ruling affects their deficit projections. Reducing the provision of medicines is likely to somewhat reduce the package deficit.
Meanwhile, MacDonough ruled to keep several climate measures from the Environment and Public Works Committee in the reconciliation bill, including methane duties that would apply to oil and gas producers that release the powerful greenhouse gas methane above a certain threshold.
Earlier on Saturday, Senate Finance Chairman Ron Wyden of Oregon announced that the clean energy tax portion of the bill “complies with Senate rules, and Parliamentarian has approved important provisions to ensure America’s clean energy future is built.”
What happens after the bill faces its first major vote?
If the first procedural vote to move forward on the bill gets the support of all 50 members of the Democratic caucus, which is expected, there will be up to 20 hours of debate split evenly between the parties, although some of that time could be returned to speed up the process.
It is not yet clear how much debate time each side will use, but some Republicans are indicating that they will not try to use all of that. The Democrats are expected to give up some of their time.
When asked if he plans to use much of the debate time, which could delay the bill’s final Senate passage, Republican Senator Rand Paul of Kentucky said, “Probably not.”
Another Republican senator, Ron Johnson, said Saturday that he would not force Senate clerks to read the bill in full, as any senator can request it under the rules. Johnson was forced to read through the US bailout legislation during last year’s budget process, delaying a vote on the bill.
Republicans will be able to use the Rama voting system to put Democrats in place and force difficult political votes. The process usually extends overnight and into the early hours of the next morning.
Senators widely expect Republicans to try to kill the insulin provisions included in the Democrats’ climate and healthcare bills on the Senate floor during the Rama vote, which would also force the senator in real time to judge whether to survive. in the invoice.
These provisions will limit insulin prices to $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the parliamentarian has ruled that the insulin cap on the private insurance market is not compatible with reconciliation. Democrats aren’t surprised by her ruling on the private market cap, but they hope Medicare’s insulin cap will remain, according to the aide.
But either way, the aide said, Democrats will keep both insulins in the bill as they go forward — daring the GOP to move in and try to beat them on the Senate floor.
It’s not yet clear exactly when the Rama voting will start, but it could start as early as Saturday night. If that happens, the final vote will likely take place as soon as the early hours of Sunday morning.
Senator Patrick Leahy, a Vermont Democrat who is recovering from hip surgery, returned to the Senate on Saturday. His return is imperative for Democrats because they need the votes of all 50 members of their convention to move the bill forward.
Senator John Cornyn, a Texas Republican, also returned to the Senate after his absence last week after testing positive for Covid-19.
The House is preparing to return to consider the legislation on Friday, August 12, according to the office of House Majority Leader Steny Hoyer.
How does the bill tackle the climate crisis?
For the party that failed to pass key climate legislation more than 10 years ago, the reconciliation bill represents a major victory for Democrats.
The nearly $370 billion Clean Energy and Climate Package is the largest climate investment in U.S. history, and the environmental movement’s biggest victory since the landmark Clean Air Act. It also comes at a critical time. This summer has seen severe heat waves and deadly floods across the country, which scientists say are linked to a warm planet.
Analysis by Schumer’s office—as well as several independent analyzes—suggests that the actions will reduce US carbon emissions by up to 40% by 2030. Strong climate regulations from the Biden administration and action from states will be needed to reach the target. Biden’s goal is to cut emissions by 50% by 2030.
The bill also contains several tax incentives aimed at lowering the cost of electricity with more renewables, and incentivizing more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a massive victory and is also just the beginning of what is needed to combat the climate crisis.
“This is not about the laws of politics, it’s about the laws of physics,” Democratic Senator Brian Schatz of Hawaii told CNN. “We all knew when we got into this effort that we had to do what the science tells us what we ought to do.”
Home health care and tax policy in the bill
The bill would enable Medicare to negotiate prices for some expensive drugs that are given in doctors’ offices or bought at a pharmacy. The Secretary of Health and Human Services will negotiate prices for 10 drugs in 2026, another 15 in 2027 and again in 2028. The number will increase to 20 drugs per year for 2029 and beyond.
This controversial provision is far more limited than what House Democratic leaders have supported in the past. But it would open the door to the party’s long-term goal of allowing Medicare to use its weight to cut drug costs.
Democrats also plan to extend the enhanced federal benefits to cover Obamacare through 2025, a year after lawmakers recently debated. This way it will not expire after the 2024 presidential election.
To boost revenue, the bill would impose a minimum tax of 15% on large corporate reporting income to shareholders, known as written income, as opposed to the Internal Revenue Service. The measure, which will raise $258 billion over a decade, will apply to companies with more than $1 billion in profits.
Concerned about how the ruling might affect some businesses, particularly manufacturers, Sinema suggested she won changes to the Democrats’ plan to curtail how companies deduct expendable assets from their taxes. Details are still unclear.
However, Sinema has canceled her party’s efforts to tighten the carry interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay the 20% long-term capital gains tax rate instead of the 37% income tax rates.
This ruling would have lengthened the amount of time investment managers must hold the interest of their earnings from three to five years to take advantage of the lower tax rate. Addressing this loophole, which would have raised $14 billion over a decade, has been a long-standing goal of Congressional Democrats.
In its place, a 1% selective tax was added on corporate share buybacks, raising another $74 billion, according to a Democratic aide.
This story has been updated with additional developments.
Jessica Dean, Manu Raju, Ella Nielsen, Tami Lohbe, Katie Lubosco and Melanie Zanona contributed to this report.