The package is the product of extensive negotiations and will give Democrats a chance to achieve major policy goals before the upcoming midterm elections. Senate Democrats are using a special process to pass the package without Republican votes.
Once the legislation passes the Senate, it will need to be approved by the House of Representatives before President Joe Biden can sign it into law.
What will happen next
Republicans can use “vote-a-rama” to put Democrats on the spot and force tough political votes, and votes on controversial policy issues are expected.
Senators are widely expecting Republicans to try to kill the insulin provisions included in the Democrats’ climate and health care bill on the Senate floor during a “vote-a-rama”, which will also force a member of the Senate to decide in real time whether it is right. remain in the bill.
The provisions would lower the price of insulin to $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the congressman decided that the insulin measure in the private insurance market was inconsistent with reconciliation. Democrats were not surprised by his decision on the private market but hope that Medicare’s insulin cap will remain in place, according to an aide.
But either way, the aide said, Democrats will keep both insulin provisions in the bill as they move forward — daring the GOP to move and try to beat them on the Senate floor.
The House is set to return to take up the legislation on Friday, August 12, according to House Majority Leader Steny Hoyer’s office.
How Democrats plan to pass emerging legislation
To pass a bill through the reconciliation process, however, the fund must adhere to a strict set of budget rules.
The Senate must decide whether the provisions in the bill meet the criteria to allow Democrats to use a zero-certificate budget process to pass legislation along party lines.
Schumer announced Saturday that after congressional review, the bill “remains largely intact.”
“The bill, if passed, will achieve all of our goals — fighting climate change, lowering health care costs, closing tax loopholes abused by the wealthy and reducing the deficit,” the New York Democrat said.
In a landmark decision, the congresswoman, Elizabeth MacDonough, allowed a key part of the prescription drug pricing plan proposed by Democrats to move forward – giving Medicare the ability to negotiate certain drug prices for the first time.
But MacDonough cut another provision aimed at lowering drug prices — imposing penalties on drug companies if they raise their prices faster than inflation. Democrats wanted the measure to apply to Medicare and the private insurance market. But the congressman decided that the inflation rate could only be applied to Medicare, a Democratic aide said.
At the same time, MacDonough decided to put several climate measures from the Environment and Public Works Committee in the reconciliation bill, including a methane fee that will be used for oil and gas producers to leak the greenhouse gas methane above a certain threshold.
Earlier Saturday, Senate Finance Chairman Ron Wyden of Oregon announced that the clean energy tax portion of the bill “conforms to Senate legislation, and key provisions to ensure our clean energy future is built in America have been approved by Congress.”
How the bill addresses the climate crisis
For a party that failed to pass major climate legislation more than 10 years ago, the reconciliation bill represents a major, long-fought victory for Democrats.
The nearly $370 billion in clean energy and climate change is the largest climate investment in American history, and the biggest win for the environmental movement since the Clean Air Act. It also comes at an important time; this summer has seen heat waves and devastating floods across the country, which scientists say are all linked to a warming planet.
An analysis from Schumer’s office — as well as many independent analyzes — suggests those measures would cut America’s carbon emissions by 40% by 2030. Stronger climate regulations from the Biden administration and action from states would be needed to reach the goal. Biden. reduce air emissions by 50% by 2030.
The bill also contains numerous tax incentives intended to lower the cost of electricity and more renewables, encouraging more American consumers to switch to electricity to power their homes and cars.
Lawmakers said the bill represents a major victory and is just the beginning of what is needed to tackle the climate crisis.
“This is not about the laws of politics, this is about the laws of physics,” Democratic Sen. Hawaii’s Brian Schatz told CNN. “We all knew coming into this effort that we had to do what science tells us what we need to do.”
Important health care and tax policy in the bill
The bill would give Medicare the power to negotiate the prices of some expensive drugs administered in doctors’ offices or purchased at pharmacies. The Secretary of Health and Human Services would negotiate prices for 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. That number would rise to 20 drugs a year by 2029 and beyond.
This controversial provision is much smaller than what Democratic congressional leaders have previously supported. But it would open the door to fulfilling the party’s longtime goal of allowing Medicare to use its heft to lower drug costs.
Democrats also plan to extend Obamacare’s enhanced federal copay subsidies until 2025, a year later than lawmakers recently discussed. That way his term will not expire after the 2024 presidential election.
To raise revenue, the bill would impose a lower tax rate of 15% on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits over $1 billion.
Concerned about how the provision would affect certain businesses, especially manufacturers, Sinema has proposed that he defeat changes to the Democrats’ plan to cap how companies can deduct depreciated assets from their taxes. Details are still unclear.
However, Sinema played down his party’s efforts to tighten the interest loophole, which allows investment managers to take a large portion of their compensation as capital gains and pay a 20 percent long-term capital gains tax rate instead of income tax rates. of up to 37%.
The provision would increase the period of time that investment managers’ profits must be held from three years to five years to benefit from the lower tax rate. Addressing the loophole, which would raise $14 billion over a decade, has been a longtime goal of congressional Democrats.
In its place, a 1% tax on corporate stock purchases was added, raising $74 billion, according to a Democratic aide.
This story has been updated with additional developments.
CNN’s Jessica Dean, Manu Raju, Ella Nilsen, Tami Luhby, Katie Lobosco and Melanie Zanona contributed to this report.