Inflation Reduction Act clears significant hurdles in Senate, heads for vote

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Senate Democrats cleared multiple hurdles in advancing their legislative crown jewel into law Saturday and have commenced the voting process which is expected to carry into Sunday.

The motion to proceed with a vote on the so-called Inflation Reduction Act cleared the Senate Saturday via a simple 51 majority vote, which will be followed by up to 20 hours of debate. Then the bill will undergo a vote-a-rama for amendments before heading to the floor for a final vote. Earlier in the day, most of the bill cleared the Senate parliamentarian’s review and received an additional Congressional Budget Office scoring.

PARLIAMENTARIAN APPROVES ENERGY AND DRUG PRICE PROVISIONS IN INFLATION REDUCTION ACT

Following language adjustments from the parliamentarian’s review, Democrats unveiled 755 pages worth of text for the legislation. Several members, including Sen. Alex Padilla (D-CA), are hoping it will pass the Senate without amendments.

Notably, the bill still includes a cap on insulin prices that may get challenged by Republicans during the amendment process because it had not been cleared by the parliamentarian when the updated 755-pages of text was released.

Long presumed dead as a doornail in the upper chamber, the spending plan was reborn late last month when Sen. Joe Manchin (D-WV) rocked Washington, announcing he struck a surprise deal with Senate Majority Leader Chuck Schumer’s (D-NY).

Manchin declared that “Build Back Better is dead” and dubbed its successor, the Inflation Reduction Act. Then, this week, Sen. Kyrsten Sinema (D-AZ) signed on as well, after a few changes were made, giving her party the full suite of Democratic Senators needed to pass the bill.

Democrats have touted the proposal as a means of curtailing rampant inflation roaring across the country, citing a prior estimate from the Congressional Budget Office that the bill would cut the federal deficit and reduce drug prices. However, the CBO also found the plan would likely have a minimal effect on skyrocketing prices.

Democrats estimate the bill will spend about $64 billion on extending the Affordable Care Act healthcare premium subsidies and $369 on climate and energy initiatives over a ten-year period. They plan to raise about $313 billion through a 15% minimum corporate tax rate, $288 billion from prescription drug pricing reform, and $124 billion from IRS tax enforcement — all over a ten-year period. Democrats had also claimed the bill will reduce the deficit by about $300 billion over the next ten years.

An initial draft included an estimated $14 billion for closing the so-called carried interest loophole, but Sinema was a no-go on that, so the Democrats swapped it with a tax on stock buybacks. The 1% tax on stock buybacks is expected to generate about $73 billion, Politico reported.

In addition to the tax and spending changes, the bill also enables Medicare to negotiate drug prices — a long sought-after policy by Democrats. Democrats have particularly directed attention to the IRS crackdown on tax evasion included in the bill.

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The commencement of voting procedures for the Inflation Reduction Act in the Senate marks the culmination of a months-long intraparty squabble of their social spending objectives. It is also significantly scaled down from early visions. Initial iterations of the “Build Back Better” agenda, had ranged between roughly $2 and $6 trillion last year, but Manchin and Sinema tanked many of those proposals, bringing the spending binge to a screeching halt, before the shock resurrection at the tail-end of July.

If the Inflation Reduction Act ultimately clears the Senate, it will join a myriad of legislative triumphs President Joe Biden has enjoyed in recent weeks. This includes the CHIPS Act, gun reform, and a veterans package for burn pit victims. Biden has also enjoyed a low unemployment number released this week as well as declining gas prices. Still, issues ranging from inflation to sagging poll numbers loom large as the midterm elections near.