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Senate Democrats have finally reached an agreement on their economic package, the Inflation Reduction Act. Centrist Senators Sinema and Manchin have given their approval to the plan, which will help pave the way for the bill to pass.
Senate Democrats have been working on an economic relief bill for over a year. The new bill, part of Biden’s Build Back Better plan, poses a major investment in energy and climate programs.
The bill also includes sweeping changes to Medicare, allowing the program to negotiate drug prices for the first time. The Inflation Reduction Act will also extend healthcare subsidies for the next three years.
Fighting among Democrats had stalled the Biden administration’s initial, more expansive economic package to help American families. This bill pares down Biden’s original 10-year plan, which was anticipated to cost 3.5 billion dollars.
Instead, Democrats have found middle ground, despite the challenges produced as the party tried to come together on the bill. Many expected Senator Sinema to hold out on her approval for weeks, if at all.
Inflation Reduction Act to move forward
Instead, Senators Sinema and Manchin have given their stamp of approval to the bill. Before the bill moves forward, however, the Senate Parliamentarian must first ensure that the bill doesn’t violate Senate procedures.
Meanwhile, Senator Sinema’s concerns were over tax consequences, in particular tightening the carried interest tax loophole. However, according to Senator Sinema, “We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation.”
The bill is still expected to need Vice President Kamala Harris’ vote as a tiebreaker. The VP is expected to approve the plan, setting the stage for the bill to move to the House of Representatives, in which Democrats currently hold a majority stake.
The final bill is expected to raise nearly 740 billion dollars in revenue, while investing in clean energy, fossil fuels, and healthcare. The money will come from tax increases on corporations and the ultra-wealthy, along with reduction in drug prices.
While the bill must still survive a “vote-a-rama” in which Republicans are expected to attack the bill and propose changes and amendments, it is still expected to pass in the next few weeks. According to Senate Majority Leader Chuck Schumer (D-NY) “The final version of the Reconciliation bill, to be introduced on Saturday, will reflect this work and put us one step closer to enacting this historic legislation into law.”