WASHINGTON — A divided Senate took a crucial step Saturday toward approving Democrats’ plan to tackle climate change, cut health care costs and raise taxes on big corporations, with a tentative vote that paved the way for passage of a significant chunk of domestic policy President Biden’s agenda in the coming days.
The measure advanced on a 51-50 party-line vote, with all Republicans opposed and Vice President Kamala Harris breaking the tie.
The move suggests that Democrats, after more than a year of infighting and painstaking negotiations, have finally united behind legislation that would provide hundreds of billions of dollars for climate and energy programs, expand subsidies under the Affordable Care Act and create a new federal initiative to lower the cost of prescription drugs, especially for older Americans.
Much of the 755-page legislation would be paid for through tax increases that Democrats say are intended to make the tax code fairer.
The vote put the bill on track to go to the Senate as early as Sunday, with the House expected to give its approval by the end of the week. That would provide a major boost to Mr. Biden at a time when his popularity is on the wane, and give Democrats a win in November’s midterm elections, in which their majorities in Congress are at stake.
“When passed, the bill will accomplish all of our goals: fighting climate change, reducing health care costs, closing tax loopholes abused by the wealthy, and reducing the deficit,” said Sen. Chuck Schumer of New York, the majority leader. , of the Senate on Saturday. “This is a great victory for the American people and a sad commentary on the Republican Party as they actively fight regulations that lower costs for the American family.”
The hard-won agreement, which includes the largest investment in history to combat global warming, came after a wave of intense negotiations with two key Democrats, Senators Joe Manchin III of West Virginia and Kirsten Sinema of Arizona.
Just weeks ago, Mr. Manchin, a conservative Democrat from a red state, said he could not agree to include climate, energy and tax measures in this summer’s domestic policy plan because of his concerns that it would worsen inflation. But he and Mr. Schumer stunned lawmakers from both parties late last month with the news that they had quietly returned to the negotiating table and hammered out a deal that included those proposals.
And on Thursday, Ms. Sinema announced that she too would move forward after extracting concessions, including dropping a provision that would have narrowed a tax break that allowed private equity and hedge fund managers to pay significantly more low taxes on some income from other taxpayers did.
What’s in the Democrats’ climate and tax bill
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New offer. The $369 billion climate and tax package proposed by Senate Democrats in July could have profound consequences for the environment and the economy. Here are some of the main provisions:
Car Industry. Taxpayers can currently receive up to $7,500 in tax credits for the purchase of an electric vehicle, but there is a limit to how many cars from each manufacturer are eligible. The new bill would remove that cap and extend the tax credit through 2032; used cars will also qualify for up to a $4,000 credit.
Energy industry. The bill would provide billions of dollars in rebates for Americans who buy energy-efficient and electric appliances and tax credits for companies that build new zero-emissions electricity sources, such as wind turbines and solar panels. It would also provide $60 billion to promote clean energy production in the United States. It would also require businesses to pay a financial penalty per metric ton for methane emissions that exceed federal limits starting in 2024.
Low-income communities. The bill would invest more than $60 billion to support low-income communities and communities of color that are disproportionately burdened by the effects of climate change. This includes grants for zero-emission technology and vehicles, as well as money to mitigate the negative effects of highways, bus depots and other transportation facilities.
Fossil fuel industry. The bill would require the federal government to auction off more public lands and waters for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. Those provisions are among those added to win the support of Sen. Joe Manchin III, D-West Virginia.
West Virginia. The bill would also bring big benefits to Mr. Manchin’s state, the nation’s second-largest coal producer, by making permanent a federal trust fund to help miners with black lung disease and offering new incentives for companies to build wind and solar farms in areas where coal mines or coal plants have recently closed.
Democrats were speeding the bill through Congress under the arcane budget process known as reconciliation, which shields certain tax and spending measures from filibuster but also tightly limits what can be included.
Republicans remain unanimously opposed to the measure and are working feverishly to defeat it, angered by the revival of a plan they thought was dead. Stunned by the deal between Mr. Schumer and Mr. Manchin, they rushed to attack the bill as a big-spending, tax-raising abomination that would exacerbate inflation and hurt the economy at an uncertain time.
“Democrats are misinterpreting the outrage of the American people as a mandate for yet another — yet another — reckless taxing and spending,” said Sen. Mitch McConnell of Kentucky, the minority leader.
He decried the “tidal wave of Washington interference” that he said would result from the prescription drug plan, which he said would focus on the research and development behind new, life-saving medical treatments and cures.
But Democrats rebranded the transformative social safety net and cradle-to-grave climate plan they once called “Building Better” as the Deflation Act. Working with a razor-thin Senate majority that gave its most conservative members strong leverage over the measure, Democrats dropped hundreds of billions of dollars in proposed spending on domestic programs, as well as many of the tax increases they had proposed to to pay for it.
Outside estimates show the measure would not lead to a huge increase in federal spending or impose significant tax increases outside of large corporations, and is expected to reduce the federal budget deficit by the end of the decade.
That didn’t stop Republicans from arguing that it would be bad for the economy and bad for Americans. Sen. John Cornyn, R-Texas, called it the “Manchin-Schumer Tax Increase of 2022.”
Republicans have spent much of the past week trying to figure out ways to delay or block the legislation, arguing that it violates reconciliation rules. (However, they indicated privately that they would refrain from forcing Senate clerks to read the bill aloud after a similar maneuver last year sparked an outcry.)
Senate Rep. Elizabeth McDonough and her team worked into the early hours of Saturday morning to determine whether components of the bill violated those rules, which require any provision to have a direct effect on federal spending or revenue. Early Saturday, she instructed Democrats to limit the scope of a proposal designed to prevent drug price increases from outpacing inflation, saying the proposed rebate could only apply to drugs purchased by Medicare, not private insurers.
But top Democrats said most of the legislation remained intact after Ms. McDonough’s review, including a plan to allow Medicare to directly negotiate the price of prescription drugs for the first time, limits on new tax breaks for electric vehicles funds and a fee designed to limit excessive emissions of methane, a greenhouse gas commonly released from leaking oil and gas.
In a last-ditch effort to derail the measure, Republicans were poised as early as Saturday night to begin forcing a rapid succession of votes on politically toxic amendments — an hourly ritual known as a frame vote — that reconciliation measures must survive to pass. In the evenly divided Senate, all 50 members of the Democratic caucus will need to remain united to prevent any changes proposed by Republicans and win final passage.
“What will vote-a-rama be? It’s going to be hell,” said Sen. Lindsey Graham, R-South Carolina. Of Democrats, he said, “They deserve this.”
Democrats also could still amend the bill. They are expected to essentially challenge Republicans to scrap a proposal to cap insulin costs for all patients, a popular measure that violates budget rules because it would not directly affect federal spending.
And at least one member of the Democratic caucus, Sen. Bernie Sanders, an independent from Vermont and chairman of the Senate Budget Committee, said he plans to force a vote on amendments to improve the legislation.
“This is a completely inadequate bill, but it does go some way toward addressing the existential threat facing the planet,” Mr. Sanders said in an interview on Friday. “I’m disappointed.”
Most Democrats, however, tried to rally their colleagues to remain united against any amendments – including those that could be proposed by colleagues in their caucus – to preserve the delicate consensus around the bill and ensure it could become law.
“What I care about is getting to 50 votes, OK, in the end, and that means we have to keep this deal together,” Sen. Elizabeth Warren, D-Mass., told reporters. “The important thing is that we made a deal and we need to keep that deal intact.”
Lisa Friedman, Stephanie Lai and Cheryl Gay…
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