US Senate Democrats pass long-awaited climate, tax and health care bill
The Senate’s passage of the bill caps off more than a year of up-and-down intra-party negotiations. And while the package is far smaller than the $3.5 trillion legislation that Democrats originally envisioned, it’s larger than many in the party expected just two weeks ago. The bill now heads to the House, which will take it up Friday.
The core of the legislation includes lowering some prescription drug prices, providing more than $300 billion into climate change and clean energy and imposing a 15 percent minimum tax on large corporations, plus a new 1 percent excise tax on stock buybacks. The bill also increases IRS enforcement and extends Obamacare subsidies through the 2024 election.
Of course, final passage didn’t occur without some last-minute drama.
Senate Democrats’ push to pass their climate, tax, and health care package hit a speed bump midday Sunday, as Senate Republicans sought to pursue an amendment with Sen. Kyrsten Sinema (D-Ariz.) to change the legislation’s corporate minimum tax.
Senate Minority Whip John Thune proposed an amendment that would exempt businesses owned by private equity from Democrats’ new corporate minimum tax, which would be paid for with a one-year extension of a cap on State and Local Tax deductions. Specifically, Thune wanted to roll back a provision that could sweep some private equity companies and the businesses they own into the 15 percent corporate minimum tax included in the bill.
Sinema, along with six other Democrats, supported that amendment, leading to its passage. Four of those Democrats — Sens. Raphael Warnock of Georgia, Mark Kelly of Arizona, Catherine Cortez Masto of Nevada and Maggie Hassan of New Hampshire — are all up for reelection in 2022.
But several Democrats opposed using the State and Local Tax deductions as a revenue stream. That prompted Democrats to adopt a subsequent amendment from Sen. Mark Warner (D-Va.) that would pay for the change by extending existing limits on how certain businesses can write off their losses for another two years.
“It’s not my first choice. But it was all good. On balance this package is so good that I’m not going to nitpick. It is historic,” said Sen. Debbie Stabenow (D-Mich.).
In addition to the Thune amendment, Democrats’ failure to keep a cap on insulin prices on the commercial market in the bill was the most notable blow during a fusillade of GOP amendments.
Those efforts by Senate Republicans were some of a few setbacks in Democrats’ mostly successful plans to pass their climate, tax and health care package. Though the GOP effectively stripped out a $35 monthly cap on insulin prices in the private market, Democrats’ goal to lower insulin prices for Medicare is now expected to become law. They also endured a partial defeat to their signature effort to lower prices on some prescription drugs in the commercial market.
Until the blow to the insulin proposal, the $700 billion-plus party-line legislation remained largely unscathed during the Senate’s infamous vote-a-rama. Senate Democrats banded together to fend off more than 20 attempts to change the bill, often voting as a bloc even on portions they support.
The unlimited amendment series was the final episode of a lengthy drama that began more than a year ago with a Democratic budget designed to set the stage for a $3.5 trillion social spending package that could sidestep a filibuster.
The final bill was carefully negotiated to be able to win support from all 50 members of the Senate Democratic caucus.
One awkward example: Sens. Sherrod Brown (D-Ohio) and Michael Bennet (D-Colo.) argued against an attempt by Sen. Bernie Sanders (I-Vt.) to change child tax credit and corporate tax language in the bill, which they actually back, with Brown saying it would “bring down the bill” if they approved it. Sanders was unbowed — even as he lost, 1-97.
“They’re great amendments. I’m very happy and I think it says something that every Democrat and Republican voted against them. It says I’m doing something right,” Sanders said on Sunday. “I’m fighting for you. I think that should be the message — not to come up with a convoluted reason you can’t vote for it.”
Sanders supported the bill on final passage. His vow to back the bill in the end, combined with Democratic enthusiasm in defeating amendments, steered the legislation to passage under rules that allow them to avoid a filibuster.
Sen. Joe Manchin (D-W.Va.) surprised his colleagues late last month when he reached a deal with Schumer on tax and climate provisions as part of the agreement. Then, Schumer made a handful of major changes to appease Sinema, eliminating language that would have tightened a loophole allowing certain investors to pay less in taxes and would have raised $14 billion in revenue.
Democrats agreed to add a 1 percent excise tax on stock buybacks, which is expected to raise $73 billion, while tweaking the corporate minimum tax to appease anxious manufacturers. The bill once contained $300 billion in deficit reduction, though the Congressional Budget Office has not yet provided a full score of the revised bill’s provisions.
Caitlin Emma and Bernie Becker contributed to this report.