More than a year after negotiations began on the legislation, Senate Democrats have finally got all 50 of their members on board for a budget reconciliation bill that will fund several of President Biden’s key priorities and advance them. medium-term policy gains in climate and health will yield elections.
On Thursday, sen. Kyrsten Sinema (D-AZ) indicated that she would support the latest draft of the legislation, known as the Inflation Reduction Act, which will pave the way for approval this weekend. Sinema, who has been waiting for the bill for a long time, was the last lawmaker Democrats needed to board the Senate after Senator Joe Manchin (D-WV) said he was willing to move forward.
The legislation is now on track for a final vote this weekend, although there are still a few other hurdles to overcome before the Senate can approve it. The bill is still pending with the Senate MP, an impartial rules expert who will determine whether the policies in the bill qualify for the reconciliation process Democrats want to use. This process allows them to pass legislation with just 51 votes and without Republican backing. If there are no major hiccups, senators will have to endure a lengthy debate and amendment process known as the vote-a-rama, when a senator can propose adding something to the bill and force others to take uneasy votes.
“Subject to the parliamentarian’s assessment, I will continue,” Sinema said in her statement on Thursday.
What’s on the bill?
While this legislation is only a fraction of what Democrats initially proposed when they began this process, it still involves substantial investment in climate, as well as major health and tax proposals. All told, it is expected to include more than $400 billion in expenses and bring in more than $700 billion in revenue, resulting in a $300 billion deficit reduction.
Sinema’s support for the bill came with a number of obligations. She said in her statement of support that the legislation will no longer close the loophole in the taxation of interest, a change she has long opposed that would tax money managers’ income at the same rate as other income. That provision was replaced by a 1 percent excise tax on share buybacks, which is expected to offset the income generated by the carry rate provision.
The bill now includes provisions on:
- Healthcare, including allowing Medicare to negotiate prescription drug prices and extending ACA subsidies for another three years.
- taxes, including a new 15 percent corporate minimum tax, financing for IRS enforcement, and a new 1 percent tax on share buybacks.
- Climate, including clean energy tax credits, environmental justice grants, and drought resilience funding.
The cafemadrid staff has a comprehensive look at how each one will work here.
Democrats are expected to receive an update Friday from the Senate MP, who could decide whether aspects of prescription drug regulations qualify for the bill. After receiving this ruling, legislators can scrub and round up the bill, taking out any policies that aren’t acceptable. In general, policies must have a clear impact on taxes and spending to qualify for a budget reconciliation. Recall that the MP previously ruled that the $15 minimum wage could not be approved through reconciliation because it did not have sufficient impact on the federal budget.
After Democrats agree on a final draft with the MP’s signature, they can begin the voting process. They will first hold a procedural vote on Saturday that kicks off a 20-hour debate on the bill, and then they’ll hold a process known as a vote-a-rama, when a senator can propose amendments to the legislation. Republicans are widely expected to use these amendments to get Democrats on the scene: For example, last year they forced Democrats to vote on issues the party was divided on, such as wrapping up the Supreme Court.
Once the vote-a-rama is complete, lawmakers can proceed with final approval of the bill, which could come as soon as Sunday. After the Senate passes the legislation, it will go to the House, which is expected to break the August recess to vote on it later this month.
Democrats also need most of their members in the House of Representatives, where they could soon have a margin of four votes. As far, some of the moderate members who previously opposed the bill if it did not include a recovery of state and local income tax (SALT) deductions, have indicated that they are still willing to support the legislation, a sign that it will likely have the support it needs to pass. Moreover, progressive members, who have pushed back weak policies in the past, have broadly expressed their support.
“If they send it to us, we’ll pass it on,” House Speaker Nancy Pelosi told a… press conference last week.