The package is the product of painstaking negotiations and will give Democrats a chance to achieve major political goals ahead of the upcoming midterm elections. Senate Democrats are using a special process to pass the package without a Republican vote.
Once the legislation passes the Senate, it will then need to be approved by the House of Representatives before President Joe Biden can sign it.
What happens next
Republicans are using “vote-a-rama” to put Democrats on the spot and force politically tough votes, and votes on controversial political issues are expected.
Senators widely expect Republicans to try to kill the insulin provisions included in the Democrats’ climate and health care bill in the Senate during the “vote-a-rama”, which will also force the real-time Senate parliamentarian to decide whether it’s in order to stay in the bill.
These provisions would limit insulin prices to $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the parliamentarian ruled that the insulin cap on the private insurance market was not in line with the reconciliation. Democrats weren’t surprised by his decision on the private market cap, but hope the cap on Medicare insulin stays in place, according to the aide.
But either way, the aide said, Democrats will keep the two insulin provisions in the bill as they move forward — challenging the GOP to budge and try to hit them in the Senate. .
The House is set to return to consider the legislation on Friday, August 12, according to the office of House Majority Leader Steny Hoyer.
How Democrats plan to pass the sweeping legislation
In order to pass an invoice through the reconciliation process, however, the package must adhere to a strict set of budget rules.
The Senate congressman must decide whether the bill’s provisions meet the rules allowing Democrats to use the filibuster-proof budget process to pass legislation along party straight lines.
Senate Majority Leader Chuck Schumer announced on Saturday that after going through parliamentary review, the bill “remains largely intact.”
“The bill, when passed, will achieve all of our goals – to fight climate change, reduce health care costs, close tax loopholes abused by the wealthy, and reduce the deficit,” the New York Democrat said. .
In a key decision, Congresswoman Elizabeth MacDonough allowed a major component of Democrats’ prescription drug pricing plans to go ahead – giving Medicare the power to negotiate the prices of certain prescription drugs for the first time.
But MacDonough has restricted another provision aimed at driving down drug prices – imposing penalties on drug companies if they raise prices faster than inflation. Democrats wanted the measure to apply to both Medicare and the private insurance market. But the congressman ruled the inflation cap could only apply to Medicare, a Democratic aide said.
Meanwhile, MacDonough decided to keep several climate measures from the Environment and Public Works Committee intact in the reconciliation bill, including a methane levy that would apply to oil and gas producers. that release the potent 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 “follows Senate rules, and important provisions to ensure that our clean energy future is built in America were approved by the parliamentarian”.
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 and long-contested victory for Democrats.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history and the environmental movement’s biggest victory since the historic Clean Air Act. It also comes at a critical time; this summer has seen punishing heat waves and deadly floods across the country, both of which scientists say are linked to global warming.
Analysis from Schumer’s office — along with multiple independent analyzes — suggests the measures would reduce U.S. carbon emissions by up to 40% by 2030. Tough climate regulations from the Biden administration and action by states would be necessary to meet Biden’s goal of cutting emissions by 50% by 2030.
The bill also contains numerous tax incentives intended to reduce the cost of electricity with more renewable energy and encourage more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is just the start of what is needed to tackle the climate crisis.
“It’s not about the laws of politics, it’s about the laws of physics,” Democratic Sen. Brian Schatz of Hawaii told CNN. “We all knew going into this effort that we had to do what science tells us what to do.”
Key Health Care and Tax Policies in the Bill
The bill would empower Medicare to negotiate the prices of certain 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. The number would increase to 20 drugs per year for 2029 and beyond.
This controversial provision is far more limited than what House Democratic leaders have supported in the past. But it would open the door to achieving a long-standing party goal of allowing Medicare to use its weight to cut drug costs.
Democrats also plan to extend enhanced federal grants for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they wouldn’t expire right after the 2024 presidential election.
To boost revenue, the bill would impose a minimum tax of 15% on income large corporations return to shareholders, known as accounting income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies whose profits exceed $1 billion.
Concerned about how the provision would affect some businesses, particularly manufacturers, Sinema suggested she had secured changes to the Democrats’ plan to reduce how businesses can deduct impaired assets from their taxes. The details remain unclear.
However, Sinema reversed his party’s efforts to tighten the deferred interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a capital gains tax rate. long-term capital of 20% instead of income tax rates of up to 37%.
The provision would have extended from three to five years the length of time that investment managers’ profit shares must be held to take advantage of the reduced tax rate. Closing that loophole, which reportedly raised $14 billion over a decade, was a longtime goal of congressional Democrats.
In its place, a 1% excise tax on corporate stock buybacks was added, bringing in an additional $74 billion, according to a Democratic aide.
This story and title have been updated with additional developments.
CNN’s Jessica Dean, Manu Raju, Ella Nilsen, Tami Luhby, Katie Lobosco, Morgan Rimmer and Melanie Zanona contributed to this report.