U.S. Senate Democrats dive into details of surprise 725-page reconciliation bill

By: - July 29, 2022 6:29 am

President Joe Biden highlighted that the proposal wouldn’t raise taxes on anyone making less than $400,000 annually, a benchmark his administration has repeatedly held to during months of negotiations on the package originally known as Build Back Better (Kevin Dietsch/Getty Images).

WASHINGTON — President Joe Biden took a preliminary victory lap Thursday to celebrate Democrats striking a surprise deal on a sweeping legislative package that renewed hopes of historic action on the party’s health care, tax and climate goals.

But just down Pennsylvania Avenue, Senate Democrats said they needed to read through the bill text to grasp exactly how the energy and climate change proposals as well as a provision to let Medicare negotiate some prescription drug prices would actually work.

Very few were prepared to commit to the bill just yet, despite their leaders’ promotion of it as a key inflation-fighting measure that would also hike taxes on corporations, reduce the deficit and take major steps to fight climate change.

Arizona Democratic Sen. Mark Kelly said he plans to delve into how the measure would lower the cost of prescription drugs, before deciding whether he’ll support it.

“That’s incredibly important to me and the folks I represent, especially seniors,” Kelly said.

The first-term senator, who is up for reelection in November, said next week isn’t too soon to bring the bill to the floor, if members are prepared to put in extremely long days before then.

“If people are committed to working on this, and spending a lot of hours — I’m not talking eight hours a day — I think there’s time,” Kelly said. “But it’s important to get the details right.”

The agreement struck between Senate Democratic leaders and West Virginia Democratic Sen. Joe Manchin III is significant because Manchin withheld his support from earlier versions of the legislation. In the evenly divided Senate, every Democrat’s vote would be needed to advance the bill under what is called budget reconciliation — but Republicans could not block it with a filibuster.

In addition, Democrats who control Congress are running out of time before the midterm elections to push through their priorities, with political forecasters predicting the potential loss of the House in November.

Electric vehicles

Michigan Sen. Debbie Stabenow said she was looking into exactly how a production tax credit for electric vehicles’ batteries and an investment tax credit for electric vehicles would work and “whether companies could actually partake, actually use that credit, based on the way it’s described.”

“So we’re just delving into it,” Stabenow said. “I’m glad there’s a recognition of that and there’s fantastic clean manufacturing and products in there. So, it’s all good for manufacturing, and overall good for the auto industry.”

New Jersey Sen. Bob Menendez said Thursday he was still reviewing the bill after getting the 725-page document that morning.

“I’m reserving judgment on it until I see all the particulars and what it means for New Jersey,” he said.

The fact the current package doesn’t include language to address the State and Local Tax Deduction is “obviously one of the complicating factors,” Menendez said.

The SALT provision allows people to deduct up to $10,000 in state and local tax payments when filing their federal taxes and is especially important in locations with high taxes, including New York, New Jersey and California.

U.S. lawmakers from those states have been pushing to raise that cap throughout negotiations on the reconciliation package in its various incarnations during the past year. House Democrats had pitched an $80,000 SALT cap for federal tax deductions. But nothing is in the current bill.

Delaware Sen. Chris Coons said he’s hopeful Democrats will be able to pass the measure, though he acknowledged there may be some challenges ahead.

“Of course there are a few rocks in the river in front of us because every senator, myself included, has something that I wanted in this package that’s not in it,” Coons said.

“Getting through this process from here to completion is going to be an interesting run. But I’m optimistic we can get there,” he added.

One more try

Senate Majority Leader Chuck Schumer and Manchin  announced their agreement on the package Wednesday, capping off more than a year of talks that have fallen apart several times.

Schumer said during a Thursday afternoon press conference that while Manchin wanted several elements in the package that many Democrats didn’t think should be included, the “north star” was getting to a 40% reduction in carbon emissions.

He also said that Democrats “will be adding things on insulin” pricing to the reconciliation package. Congress has been considering ways to cap the cost of insulin, which has skyrocketed in price.

Schumer declined to say if he would be able to get Arizona Sen. Kyrsten Sinema to support the legislation, especially because it would close the carried interest loophole, a tax break for hedge fund managers. He also declined to say if he was willing to remove that language if needed to get her support.

“Members are reviewing the text, it’s a long text,” Schumer said. “We expect to move forward next week.”

Sinema’s spokesperson said Thursday she didn’t have any comments on the package.

“She’s reviewing the text and will need to review what comes out of the parliamentarian process,” the spokesperson said in a statement.

Biden praise

Biden, speaking from the State Dining Room in the White House, expressed his support for the package, saying it would lower health care costs for millions of Americans and would be “the most important investment we’ve ever made in our energy security.”

The bill, called the Inflation Reduction Act of 2022, would also “begin to restore fairness to the tax code” by setting a 15% minimum corporate tax, he said.

Biden highlighted that the proposal wouldn’t raise taxes on anyone making less than $400,000 annually, a benchmark his administration has repeatedly held to during months of negotiations on the package originally known as Build Back Better.

“With this legislation, we’re facing up to some of our biggest problems, and we’re taking a giant step forward as a nation,” Biden said.

The package doesn’t include many of the policy proposals Democrats put in the original BBB reconciliation package, including the expanded child tax credit, a priority for the party’s progressives.

Parliamentarian review

While senators are reading through the bill text and working behind the scenes to understand exactly how its provisions would work, a small group of lawmakers and key staff will huddle with the Senate parliamentarian to ensure the bill complies with the rules of budget reconciliation.

The process, which Democrats used to pass their $1.9 trillion COVID-19 relief bill last year and Republicans used in 2017 to enact their sweeping tax cuts legislation, requires the elements of the bill to stay within strict guardrails.

Democrats may opt to remove certain provisions if they run afoul of the requirements, the way they did last year when they stripped out language that would have increased the federal minimum wage to $15 an hour.

If the bill falls within the parameters for budget reconciliation and all 50 senators back the provisions, it could be on the floor sometime next week.

“I expect the remaining work with the parliamentarian will be completed in the coming days. And the Senate will vote on this transformative legislation next week,” Schumer said.

That timeline assumes all 50 Senate Democrats will be healthy and available, a feat that might be especially hard to reach with ongoing COVID-19 infections.

Senate Majority Whip Dick Durbin, an Illinois Democrat, announced a positive diagnosis just Thursday morning. Manchin is also out this week after announcing a positive test Monday.

Vermont Sen. Pat Leahy has been out since late June after having a hip replacement and a follow-up surgery. His office said Thursday that Leahy will come in when his vote is needed, including if that is next week.

Schumer acknowledged that COVID-19 could scuttle Democrats’ plans to quickly send the package to the House.

“It’s always a worry. It’s made life much harder in a 50-50 Senate. But we’re going to have to persevere,” Schumer said.

Virginia Democratic Sen. Tim Kaine said there’s been no leadership guidance to members to start wearing masks again or to stop attending social events, but noted many members are trying to be careful.

“I’m testing frequently and if I were to test positive, I’d quarantine,” Kaine said.

Vote-a-rama

If all 50 U.S. Senators support the bill and none are out due to COVID-19 or other health complications next week, the chamber could begin the debate process. That will culminate in a marathon voting session, known as a vote-a-rama.

That procedure, required by the budget reconciliation process, will likely last overnight and into the next morning.

The amendment voting free-for-all permits any senator to bring an amendment, or several, to the floor and ask for a vote.

Republicans are expected to use it to force votes on contentious issues, especially during a campaign year, or try to alter parts of the bill that might not be supported by centrist Democrats like Manchin or Sinema.

Vice President Kamala Harris will likely be on hand to cast many tie-breaking votes.

Schumer was coy Thursday when asked if Democratic senators would be free to offer amendments during that process.

“We’re going to work out how we pass this bill successfully going through vote-a-rama,” he said. “And I think we’ll have the cooperation of all 50 of the members.”

Jacob Fischler contributed to this report.

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Jennifer Shutt
Jennifer Shutt

Jennifer covers the nation’s capital as a senior reporter for States Newsroom. Her coverage areas include congressional policy, politics and legal challenges with a focus on health care, unemployment, housing and aid to families.

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