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Senate Democrats pass bill that tackles climate crisis and lowers prescription drug prices

The legislation – which would be the largest investment yet in combating the climate crisis – now heads to the House of Representatives.

Eric Garcia,John Bowden,Louise Boyle
Monday 08 August 2022 02:15 BST
Manchin refuses to say whether he hopes Democrats hold Congress in the midterms
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Senate Democrats passed their signature legislation tackling the climate crisis and prescription drug prices early on Sunday morning, sending the legislation to the House of Representatives.

The legislation, known as the Inflation Reduction Act of 2022 would be the biggest step that the US government has taken to cut domestic emissions at a moment when global targets are faltering. It will also allow Medicare to negotiate drug prices, cap the cost of insulin for Medicare recipients and continue subsidies for Obamacare.

The vote came after a marathon series of votes known as a “vote-a-rama” that began late Saturday evening and went well into Sunday afternoon. All 48 Democrats and two independents voted for the legislation along with Vice-president Kamala Harris, while all Republicans voted against.

“This is an example of leaders leading, understanding that there are solutions at hand, if folks have the willingness and the courage to actually step forward and fix the problem,” Ms Harris told The Independent.

The legislation now heads to the House of Representatives, where it will likely pass if only 9 of Democrats’ 220 members oppose it. The White House said President Joe Biden would sign the bill.

The legislation comes after Democrats have spent more than a year attempting to pass Mr Biden’s signature domestic legislation. Mr Biden initially hoped to pass a massive social spending bill that included spending on an expanded child tax credit; home care for people with disabilities; expanded hearing coverage for Medicare recipients; immigration reform; and more robust efforts to combat the climate crisis and promote clean energy. They hoped to pass it alongside his bipartisan infrastructure bill.

But Senator Joe Manchin, the conservative Democrat from West Virginia, announced his opposition legislation known as Build Back Better in December. That led to on-and-off-again negotiations between Mr Manchin and Senate majority leader Chuck Schumer. Late last month, Mr Schumer and Mr Manchin announced a deal known as the Inflation Reduction Act, a nod to Mr Manchin’s concern about rising prices.

It will also boost the US’s credibility on the international stage as Mr Biden plans to head to Egypt for COP27, where he will demand that other major emitters in China, Europe, and beyond, sharply cut their own fossil fuel use.

The bill proposes $369bn in climate and clean energy investments, including billions of dollars for tax incentives to expand renewable energy, battery storage and nuclear power over the next 10 years.

The legislation also provides tax credits to make it easier to buy electric vehicles, help farmers cut agricultural emissions, and fund improvements in minority and low-income communities who are most harmed by climate and environmental pollution.

Several new analyses of the IRA, from independent policy groups, found that it would cut emissions about 40 per cent (below 2005 levels) by the end of the decade. It puts the US within striking distance of Mr Biden's pledge to cut US emissions in half by 2030.

Some climate activists and environmental groups objected to aspects of the bill that were necessary to get Mr Manchin, who has made a fortune from his state’s coal industry, on board, such as a requirement that the government auction off leases for oil and gas drilling on public lands and water, including in the Gulf of Mexico and in Alaska.

Coal and gas plants that use carbon-capture technology will also get expanded tax credits. Mr Manchin was given a separate promise that the permitting progress would be sped up with the Mountain Valley gas pipeline in West Virginia.

At the same time, many Democratic Senators said they would not vote on any amendments to the legislation recognising it as the only chance to pass any major climate legislation.

Many Democrats also expressed excitement about the fact that it would allow Medicare to negotiate drug prices. But the Senate parliamentarian Elizabeth MacDonough issued guidance weakening part of the legislation that would force drug companies to rebate Medicare if they raised drug prices higher than inflation.

The parliamentarian delivered another blow to Democrats when she announced that the plan to cap insulin for private insurance patients to $35 did not follow the rules of budget reconciliation. That led to Republicans raising a point of order to strip it out of the bill.

Democrats would have needed to earn 60 votes to keep the price of insulin at $35 for private insurance patients in the legislation, but only seven Republicans voted to keep it in.

Similarly, Republican Senate minority whip John Thune tried to include a carve-out for the Democrats’ proposed corporate minimum tax for certain companies affiliated with private equity, as a means to coax conservative Democratic Senator Kyrsten Sinema of Arizona. However, the amendment would have put the legislation in jeopardy in the House because it continued a cap on state and local tax deductions put in place during the Trump tax cuts, which many Democrats in New York, New Jersey and California oppose.

Six Democrats joined Ms Sinema, including Senators Jon Ossoff and Raphael Warnock of Georgia; Jacky Rosen and Catherine Cortez Masto of Nevada; Mark Kelly of Arizona; and Maggie Hassan of New Hampshire.

Senator Mark Warner of Virginia offered a substitute amendment that passed with all Democratic votes.

Despite the setbacks, Democrats passed the legislation early Sunday evening.

Senator Gary Peters of Michigan, who as chairman of the Democratic Senatorial Campaign Committee is in charge of electing Democrats and protecting incumbents, said the prescription drug aspect will help Democrats on the campaign trail.

“If you look at polling is like the number one issue for most people in the country right now,” he told The Independent during the vote to begin debate on the bill.

Democrats also received a life raft when Republicans did not raise a point of order to take out the part of the legislation that would allow for non-Medicare patients to have their insulin costs capped.

Senator Bernie Sanders, who criticised the bill as insufficient, proposed an amendment to allow for Medicare to negotiate all drug prices instead of just 10 drugs initially by 2024 and 20 drugs by 2029.

“I think it is absolutely imperative that this Congress, at least on a party, say we understand the crises facing working families, and we're gonna stand with them, and we're gonna vote for some serious amendments to improve this bill,” he told reporters on Saturday afternoon.

But Mr Sanders’s amendment on drug prices, as well as an amendment to include dental, hearing and vision care to Medicare coverage, both failed with most Democrats opposing the legislation.

Despite the internal dissent, many Democrats hailed the passage of the bill. Senator Sherrod Brown of Ohio said it showed that Democrats could take on special interest groups.

“I mean, this is the first time when you think about this, we took on, we took on the drug companies who never lose. We took on the oil companies who never, who rarely lose and we took on Wall Street and we were winning on all three and how important that is,” he said.

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