Senator Wyden Plays Key Role on Shape of Legislation
Following a 20-hour vote-a-rama and a party-line vote, Senate Democrats punched through a $740 billion budget reconciliation measure that invests in clean energy, promises to lower prescription drug prices, reduces the federal deficit and imposes a 15 percent minimum tax on large corporations.
The legislation will be voted on Friday when the House returns. President Biden has indicated he will sign it. Under Senate rules, budget reconciliation measures are not subject to a filibuster and require only a simple majority to pass.
Democrats lauded the measure, saying it fulfills promises made during the last two years. Behind the scenes, Democrats believe the legislation will buoy their prospects in the midterm elections in November. Senate Republicans lambasted the Inflation Reduction Act, asserting it will raise inflation, not lower it.
Passage required all 50 Senate Democrats to be present and vote ‘yes’, with Vice President Kamala Harris casting the deciding vote. The major outline of the legislation was shaped by a hard-won negotiation between Senate Majority Leader Chuck Schumer and West Virginia Senator Joe Manchin. To win the 50th Senate Democratic vote, Senator Kyrsten Sinema of Arizona, Schumer agreed to drop a $14 billion provision that would have raised taxes for hedge fund managers.
The climate action provision of the legislation drew widest praise. Advocates claim the $370 billion in clean energy incentives spread out over 10 years will enable the United States to cut its 2005 carbon emission levels by 40 percent by the end of this decade. The bill’s approach to reducing carbon emissions represented a consequential change to what has been a five-decade campaign to address climate change.
Oregon Senator Ron Wyden, as chairman of the Senate Finance Committee, played a key role in shaping the climate action and prescription drug provisions of the Inflation Reduction Act that passed over the weekend.
“Sticks weren’t working,” said Oregon Senator Ron Wyden, who as chairman of Senate Finance played a key role in drafting the legislation. “That was the lesson.” Instead of sticks, the legislation offers carrots to build solar and wind facilities and to pursue hydrogen power and carbon-capture technologies. To satisfy Manchin, it gives a green light for new oil and gas drilling in the gulf of Mexico and Alaska and a 304-mile gas pipeline through the Appalachian Mountains.
Massachusetts Senator Ed Markey noted he began his political career in 1976 by campaigning for environmental policies. He proposed a cap-and-trade measure in 2009 that failed to pass. Rhode Island Senator Sheldon Whitehouse has given 285 floor speeches in support of climate action. Former Vice President Al Gore, who held the first congressional hearings on climate change in 1982, said, “Finally, we have crossed a major threshold.”
Republicans were less kind in their assessment. South Carolina Senator Lindsey Graham said, “I thought long and hard about how to explain this to the American people, and the only thing I can tell you is insanity is defined as doing the same thing and expecting a different outcome.”
Voters may take the greatest interest in the bill’s provisions intended to reduce prescription drug prices. The bill caps out-of-pocket expenses for drugs at $2,000 per year for Medicare enrollees and allows Medicare to negotiate the price of some medicines starting in 2026. Drug companies would be forced to rebate the federal government if prices for Medicare enrollee drugs raise about the inflation rate. A cap on the price of insulin was stripped from the bill by a Senate floor amendment backed by Republicans.
The legislation provides $64 billion to extend subsidies for Americans covered through state and federal exchanges under the Affordable Care Act.
One of the bill’s provisions that especially irked Republicans was $80 billion for the Internal Revenue Service to update technology and hire thousands of additional agents to pursue tax cheats.
Senator Bernie Sanders of Vermont waged what turned out to be an unsuccessful one-man crusade to expand Medicare coverage to include dental, hearing and vision care and speed up Medicare’s ability to negotiate drug prices. Democrats largely opposed his amendments to preserve a fragile majority for the larger package.
One of the potentially most popular provisions in Biden’s original Build Back Better initiative was investments in childcare. Manchin opposed such investments in earlier iterations of a compromise. Sanders tried to re-attach the child tax credit and pay for it by a general corporate tax rate. It failed on the Senate floor 97-1.
Wyden said compromise was necessary to gain passage of core provisions. “You could always say, ‘I wanted this, I wanted that,’ but we battled for decades.”
One of the bill’s provisions that especially irked Republicans was $80 billion for the Internal Revenue Service to update technology and hire thousands of additional agents to pursue tax cheats.
Republicans especially disliked the 15 percent corporate minimum tax, which they insisted would amount to an increase on ordinary Americans. A last-minute change was made by Democrats to accommodate Sinema to carve out private equity firms and companies in their portfolios from the minimum tax.
