The package is the result of painstaking negotiations and will give Democrats a chance to hit key policy goals ahead of the next midterm elections. Senate Democrats use a special process to pass the package without a Republican vote.
Once the bill passes the Senate, it will need to be approved by the House of Representatives before President Joe Biden signs it into law.
The Senate is scheduled to hold its first procedural vote on Saturday to move the bill forward. A simple majority is required to advance a motion.
A vote has not yet been scheduled, but Senate Majority Leader Chuck Schumer said Saturday after noon ET that “within a few hours,” the House “will formally begin the process of passing the Inflation Reduction Act.” said.
The Senate holds just 50 seats for Democrats, but they are expected to band together to advance the bill in the first procedural vote.
However, in order for the invoice to pass through the reconciliation process, the package must adhere to a strict set of budgeting rules.
Senators must determine if the bill’s provisions meet the rules so Democrats can use a filibuster-proof budget process to pass legislation in line with straight party lines. .
Schumer announced on Saturday that the bill “is largely in place” after being scrutinized by lawmakers.
“If this bill passes, we will achieve all of our goals: fighting climate change, reducing health care costs, closing tax loopholes exploited by the wealthy, and reducing our deficit.”
In a major ruling, Congressman Elizabeth McDonough allowed a major piece of the Democratic prescription drug pricing plan to go ahead, giving Medicare the power to negotiate prices for certain prescription drugs for the first time.
But McDonough narrowed another clause aimed at lowering drug prices, penalizing drug companies if they raise prices faster than inflation. Democrats wanted the bill to apply to both Medicare and the private insurance market. But lawmakers have ruled that the inflation cap is only applicable to Medicare, the Democratic aide said.
Democrats are awaiting new cost estimates from the bipartisan Congressional Budget Office to see how the ruling will affect their deficit projections. may be somewhat restricted.
Meanwhile, McDonough decided to keep some climate measures from the Environmental Public Works Board intact in the settlement bill. This includes methane charges applied when oil and gas producers leak methane, a potent greenhouse gas, above certain thresholds.
Earlier Saturday, Oregon Senate Finance Speaker Ron Wyden said the clean energy tax portion of the bill “is in compliance with Senate rules to ensure a clean energy future is built in America.” The important provisions of the law have been approved by the members of the Diet.”
What happens after the bill faces its first significant vote
If the first procedural vote to go on the bill wins the support of all 50 members of the Democratic caucuses (which is expected), up to 20 hours of debate will be split evenly between both parties. It will be split, but some of that time may be given back to speed up the process.
It’s not yet clear how much of each side’s allotted debate time will be spent, but some Republicans have suggested they won’t use it all. We hope to get some back.
Kentucky Republican Senator Rand Paul said “probably not,” when asked if he planned to use a lot of debate time that could delay the final passage of the bill in the Senate. .
Another Republican senator, Ron Johnson of Wisconsin, said on Saturday he would not force the Senate clerk to read the bill in its entirety. Mr. Johnson forced the American Rescue Plan bill to be read out during last year’s budget process, which delayed the bill’s vote.
Republicans can use the Lama vote to force the Democrats into place and force a politically tough vote. This process usually lasts overnight and into the early hours of the next morning. It’s not yet clear when the lama voting will begin, but it could start as early as Saturday night. A final vote could then take place early Sunday morning.
Vermont Democratic Senator Patrick Leahy, who is recovering from hip surgery, returned to the Senate on Saturday. is essential.
Texas Republican Senator John Cornyn also returned to the Senate after being absent last week after testing positive for Covid-19.
The House is ready to return to take up the bill on Friday, Aug. 12, according to House Majority Leader Stenny Hoyer’s office.
How the Bill Addresses the Climate Crisis
For a party that failed to pass major climate-related legislation more than a decade ago, the settlement bill represents a major victory for the Democrats.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history and the biggest triumph of the environmental movement since the groundbreaking Clean Air Act. It also comes at a critical time. This summer has seen intense heat waves and deadly floods across the country. Scientists say both of these are linked to global warming.
Analysis from Schumer’s office, as well as multiple independent analyzes, suggest that this action could reduce US carbon emissions by up to 40% by 2030. By 2030 he will reduce emissions by 50%.
The bill also includes a number of tax incentives aimed at lowering the cost of electricity with more renewable energy and encouraging more American consumers to switch their homes and cars to electric. It contains.
Lawmakers said the bill represented a monumental victory and was just the beginning of what is needed to fight the climate crisis.
“This is not about the laws of politics, it’s about the laws of physics,” Hawaii Democratic Senator Brian Schatz told CNN. “We all knew going into this effort that we had to do what science told us what we needed to do.”
Key Health Care and Tax Policies in the Bill
The bill would allow Medicare to negotiate the price of certain expensive medicines administered at a doctor’s office or purchased at a pharmacy. The Secretary of Health and Human Services said in 2026 she will negotiate prices for 10 drugs, and in 2027 and he will negotiate prices for 15 more in 2028. After 2029, that number will increase to 20 per year.
This controversial provision is much more restrictive than what House Democratic leaders have supported in the past. But it would open the door to achieving a long-standing party goal of allowing Medicare to use that burden to lower the cost of drugs.
Democrats also plan to extend enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way it won’t expire right after the 2024 presidential election.
To boost revenue, the bill would impose a minimum 15% tax on the income known as book income that large corporations report to shareholders, as opposed to the Internal Revenue Service. The bill, which will raise him $258 billion in 10 years, applies to companies whose profits exceed his $1 billion.
Cinema, which is concerned about how the provision will affect certain businesses, especially manufacturers, said it had won a change in the Democratic Party’s plan to cut back on how businesses deduct depreciable assets from taxes. suggesting. Details remain unknown.
However, cinema seeks to tighten the carry interest loophole that allows investment managers to treat much of their compensation as capital gains and pay a long-term capital gains tax rate of 20% instead of an income tax rate of up to 37%. She put an end to her party’s efforts.
This provision would extend the period from three years to five years for which an investment manager’s interest must be held in order to take advantage of the lower tax rate. Addressing this loophole, which could raise $14 billion over 10 years, has long been a goal of Congressional Democrats.
Instead, it added a 1% excise tax on corporate stock buybacks, raising another $74 billion, according to Democratic aides.
This story has been updated with additional developments.
CNN’s Jessica Dean, Manu Raju, Ella Nilsen, Tami Luhby, Katie Lobosco and Melanie Zanona contributed to this report.