On a day that saw the United States Senate pass legislation that will revitalize the semiconductor and other technological industries, Senate Majority Leader Chuck Schumer and West Virginia Senator Joe Manchin have announced they have reached a deal to include significant sustainability/combat climate change provisions into a scaled-down Build Back Better bill, called the Inflation Reduction Act of 2022, that also contains a Prescription Drug Benefit and the renewal of Affordable Care subsidies.
After balking at these provisions earlier this month, Senator Manchin, after engaging in private negotiations with Leader Schumer agreed to provisions that would include:
- $433 billion in new spending (like tax credits for lowering energy costs, and purchasing electric vehicles for people with qualifying incomes) that will pay for the climate provisions, the Prescription Drug Benefit, and the renewal of the Affordable Care subsidies.
- $739 in new revenues including a minimum tax on corporations and funds for the Internal Revenue Service to go after tax cheats. These funds will pay for the new measures and reduce the deficit.
- Goals to “increase clean energy production and reduce carbon emissions roughly 40 percent by 2030.”
A very happy President Biden issued a White House statement that relayed:
“This afternoon, I spoke with Senators Schumer and Manchin and offered my support for the agreement they have reached on a bill to fight inflation and lower costs for American families. With this agreement, we have a chance to make prescription drugs cheaper by allowing Medicare to negotiate lower prices and we can lower health insurance costs for 13 million Americans, by an average of $800 a year, for families covered under the Affordable Care Act. We will improve our energy security and tackle the climate crisis – by providing tax credits and investments for energy projects. This will create thousands of new jobs and help lower energy costs in the future. This bill will reduce the deficit beyond the record-setting $1.7 trillion in deficit reduction we have already achieved this year, which will help fight inflation as well. And we will pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year. This is the action the American people have been waiting for. This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future. I will have more to say on this later. For now, I want to thank Senator Schumer and Senator Manchin for the extraordinary effort that it took to reach this result. If enacted, this legislation will be historic, and I urge the Senate to move on this bill as soon as possible, and for the House to follow as well.”
Senators Schumer and Manchin released a joint statement that said:
“Today, we are pleased to announce an agreement to add the Inflation Reduction Act of 2022 to the FY2022 Budget Reconciliation bill. After many months of negotiations, we have finalized legislative text that will invest approximately $300 billion in Deficit Reduction and $369.75 billion in Energy Security and Climate Change programs over the next ten years. The investments will be fully paid for by closing tax loopholes on wealthy individuals and corporations. In addition, the expanded Affordable Care Act program will be extended for three years, through 2025. The revised legislative text will be submitted to the Parliamentarian for review this evening and the full Senate will consider it next week.
“The Inflation Reduction Act of 2022 will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030. The bill will finally allow Medicare to negotiate for prescription drugs and lower health care costs for millions of Americans. Additionally, we have reached agreement with President Biden and Speaker Pelosi to pass comprehensive permitting reform legislation before the end of this fiscal year. We urge every member of the U.S. Senate to support this important legislation.”
In excerpts from an additional statement released on his website, Senator Manchin wrote:
“I have worked diligently to get input from all sides on the legislation my Democratic colleagues have proposed and listened to the views of my Republican friends to find a path forward that removes inflationary policies so that Congress can respond to Americans suffering from high prices. Based on that work, I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination. Whether it is the threats to our energy security, high inflation, exploding national debt, persistent income inequality, supply chain chaos or the emergence of a new Cold War, it is time to put away the partisan swords and advance legislation that is in the best interests of the future of this nation and the American people we all represent – not just one party.
“It is past time for America to begin paying down our $30 trillion national debt and get serious about the record inflation that is crushing the wages of American workers. In practical terms, the Inflation Reduction Act of 2022 would dedicate hundreds of billions of dollars to deficit reduction by adopting a tax policy that protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.
“Tax fairness is vital to our nation’s economic future. It is wrong that some of America’s largest companies pay nothing in taxes while freely enjoying the benefits of our nation’s military security, infrastructure and rule of law. It is common sense that a domestic corporate minimum tax of 15 percent be applied only to billion-dollar companies or larger ensuring that America’s largest businesses are no longer able to operate for free in our economy. Furthermore, to avoid inevitable partisan gamesmanship and increase confidence in the fairness of the tax system, tax reform should never put U.S. businesses at a disadvantage against international competitors. Our tax code should not favor red state or blue state elites with loopholes like SALT and should focus more on closing unfair loopholes like carried interest. Through the enforcement of a fair tax code, we can use the revenue to cut the deficit and lower the cost of healthcare for working families and small businesses.
“In addition to fighting inflation, we must stop pretending that there is only one way to combat global climate change or achieve American energy independence. The Inflation Reduction Act of 2022 addresses our nation’s energy and climate crisis by adopting commonsense solutions through strategic and historic investments that allow us to decarbonize while ensuring American energy is affordable, reliable, clean, and secure. The need to balance all of these critical energy priorities is no longer open to debate given the energy threats we face.
“I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game. As the superpower of the world, it is vital we do not undermine our superpower status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load. This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country. The Inflation Reduction Act of 2022 invests in the technologies needed for all fuel types – from hydrogen, nuclear, renewables, fossil fuels, and energy storage – to be produced and used in the cleanest way possible. It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels. It invests heavily in technologies to help us reduce our domestic methane and carbon emissions and also helps decarbonize around the world as we displace dirtier products.
“Our persistent and increasing dependence on foreign energy and supply chains from countries who hate America represents a clear and present danger and it must end. The increased risk of geopolitical uncertainty demands that we turn our focus to increasing U.S. energy production and bringing good-paying energy and manufacturing jobs back to America. While this may seem like common sense, this Administration’s current solution is to push forward more costly regulations resulting in less U.S. production while inexplicably asking other nations to pump more oil and relying on Chinese President Xi for the critical minerals our economy needs.”
If this miraculous legislation does indeed pass, Democrats will have more to add to the powerful narrative that they are the party that will lift people up, move the country forward, protect individual rights like choice and access to the ballot box, be sound financial stewards of the national economy, and guardians of the American Ideal.
Now the wait is on to see if Arizona Senator Kyrsten Sinema and all the House Democrats will support the deal. The clock is now ticking.