The Democrats passed their $750 billion health care, tax, and climate bill on Sunday afternoon.
The passing was a significant win for President Biden and his party.
Vice President Kamala Harris had the tie-breaking vote in the final party-line vote of 51-50.
The package results from careful negotiations, giving the Democrats a chance to achieve significant policy objectives ahead of the upcoming midterm elections.
On Friday, August 12th, the house of representatives is expected to pass the bill.
They have to approve the bill before Biden can sign it into law.
President Biden said in a statement on Sunday, “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.”
“I ran for President promising to make government work for working families again, and that is what this bill does — period.”
How The Senate Democrats Passed Te Bill On A Party-Line Vote
Joe Manchin, the Democratic senator from West Virginia, played a crucial role in shaping the legislation.
The bill only moved forward after Manchin and Senate Majority Leader Chuck Schumer announced a deal at the end of July.
After earlier negotiations had stalled out, the deal was a significant breakthrough for Democrats.
Arizona Sen. Kyrsten Sinema offered critical support for the bill only after party leaders agreed to change new tax proposals.
Sinema indicated she would “move forward” on the sweeping economic package.
Democrats were able to hold off most GOP efforts to change their fragile deal.
However, they did make a change before the bill’s final passage, adjusting the corporate minimum tax provisions.
“After more than a year of hard work, the Senate is making history,” Schumer said shortly before final passage.
“This bill will kickstart the era of affordable clean energy in America; it’s a game changer, it’s a turning point, and it’s been a long time coming.”
What’s In The Bill?
The new legislation is the single most significant investment in the climate in U.S. history.
The recently passed bill includes standards to lower emissions and provides tax incentives and grants to help transition to clean energy to help combat the climate crisis.
It invests nearly $400 billion in clean energy to reduce carbon emissions by 40% by 2030.
The investments include tax credits to stimulate the manufacturing of equipment like solar panels and wind turbines and the purchase of electric vehicles.
The bill also includes:
- Money for decreasing pollution.
- Protecting forests and coastal habitats.
- Funding state programs and research.
Manchin also scored some wins for the oil pipeline industry, which has been one of his financial backers.
The bill allows Medicare to negotiate directly with prescription drug companies on the healthcare side.
This will lower the cost of medications and cap out-of-pocket drug costs for older Americans.
It also provides subsidies for Healthcare.gov premiums set to expire, so many Americans’ health care costs stay down.
The bill will be funded by raising taxes on some corporations that make over $1 billion annually.
Moreover, it will tax corporate stock buybacks and provide money for the IRS to pursue tax evaders.
Over the next ten years, the entire legislative package will be anticipated to reduce the government deficit by up to $300 billion.
Senate Democrats wanted to include a provision to cap the cost of insulin at $35 a month for all Americans with private insurance.
Democrats have decided to maintain the legislative filibuster, so the party in power tried to reinstate the removed section of the bill with 60 votes, requiring the support of 10 Republicans.
The measure fell short by three votes, earning 57 yes votes to 43 no votes, so it could not satisfy the rules of the Senate and failed.
Here’s a quick breakdown of what’s included in the bill:
The bill’s minimum tax rate of 15% on corporations with annual profits over $1 billion is expected to generate at least $258 billion in revenue over the next decade.
It gives the Internal Revenue Service $80 billion more over ten years, which will be used partly to fund more jobs and improve tax collection and enforcement, especially regarding corporations and the wealthy.
The Congressional Budget Office projects that the IRS’s new investment will generate additional revenue of $203 billion over the next 10 years. This would make a net gain of $124 billion.
It does not include new taxes on families making $400,000 or less and no new taxes on small businesses.
The bill increases health care spending by $98 billion.
The new spending is primarily on extending enhanced Affordable Care Act subsidies created through the American Rescue Plan by an additional three years.
Medicare is now allowed to negotiate the prices of certain drugs, and there’s a $2,000 cap on out-of-pocket prescription drug costs.
Senate Republicans blocked a provision that would have limited patients with private insurance to a $35 annual out-of-pocket maximum for insulin because it was deemed to violate reconciliation rules.
The bill is expected to become the most significant climate bill in U.S. history due to the roughly $370 billion it invests in promoting clean energy and reducing greenhouse gas emissions.
Renewable energy sources will have a tax incentive. This includes wind and solar power, as well as existing nuclear power plants and advanced nuclear technologies.
Buyers who purchase North American-built electric vehicles get up to $7,500 in federal tax credits to encourage buying electric cars and jump-start America’s electric vehicle industry.
The bill will also create a methane fee program to fine corporations emitting harmful greenhouse gas above federal limits.
The bill’s climate provisions put the U.S. on a path to reduce its carbon emissions by up to 40% based on 2005 levels by 2030.
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