Senate Democrats approved their climate and health care spending package on Sunday, sending it to the House of Representatives, moving Joe Biden one step closer to a significant legislative victory ahead of November’s midterm elections.
If signed into law, the bill, formally known as the Inflation Reduction Act, would allocate $369bn to reducing greenhouse gas emissions and investing in renewable energy sources. Experts have estimated the climate provisions of the bill will reduce America’s planet-heating emissions by about 40% by 2030, compared with 2005 levels.
Democrats have promised the bill will lower healthcare costs for millions of Americans by allowing Medicare to negotiate prescription drug prices and capping Medicare recipients’ out-of-pocket prescription drug prices at $2,000 a year. Those who receive health insurance coverage through the Affordable Care Act marketplace are also expected to see lower premium costs.
The legislation includes a number of tax provisions to cover the costs of these policies, bringing in $739bn for the government and resulting in an overall deficit reduction of roughly $300bn. The policy changes include a new corporate minimum tax, a 1% excise tax on stock buybacks and stricter enforcement by the Internal Revenue Service.
“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 said in a statement celebrating the bill’s passage. “I ran for president promising to make government work for working families again, and that is what this bill does – period.”
The final Senate vote was 51-50, with every Democrat supporting the bill while all 50 of their Republican colleagues opposed the legislation. With the Senate evenly divided on the bill’s passage, Vice-President Kamala Harris cast the tie-breaking vote.
Because Democrats used the reconciliation process to advance the bill, they needed only a simple majority to pass the proposal, allowing them to avoid a Republican filibuster.
But the choice to use reconciliation also somewhat limited what Democrats could include in their bill. The Senate parliamentarian ruled on Saturday that a key healthcare provision, which would have placed inflation-related caps on companies’ ability to raise prescription drug prices for private insurance plans, ran afoul of reconciliation rules. Another proposal to cap the cost of insulin in the private insurance market at $35 a month was also stripped out of the bill after 43 Senate Republicans voted to block the policy on procedural grounds.
