O american senate voted this Sunday afternoon (7) to approve the broad health and climate bill of Democrats, sending it to Chamber of Deputies, what does a significant victory mean for the president Joe Biden and your party.
The bill – called the Inflation Reduction Law – would represent the largest climate investment in US history and make major changes in health policy, giving the Medicare the power, for the first time, to negotiate the prices of certain prescription drugs and to extend expired health care subsidies by three years.
The legislation would reduce the deficit, be paid through new taxes – including a 15% minimum tax on large corporations and a 1% tax on share buybacks – and increase the IRS’s collection capacity.
It would also raise more than $700 billion in government revenue over 10 years and spend more than $430 billion to reduce carbon emissions, as well as extend subsidies for health insurance under the Affordable Care Act and use the rest of the new revenue. to reduce the deficit.
The package is the product of painstaking negotiations and its passage would give Democrats a chance to achieve important political goals ahead of the upcoming midterm elections.
The Democrat-controlled House, which is due to pass the legislation on Friday, Aug. 12, must pass the bill before Biden can sign it into law.
Senate Democrats, with a narrow majority of 50 seats, remained unified to pass the legislation, using a special process to pass the measure without Republican votes. Final approval came after a marathon of votes on controversial amendments known as “vote-a-rama” that stretched from late Saturday night to Sunday afternoon.
How Senate Democrats Passed the Bill on a Party Line Vote
Senate Democrats have long hoped to pass a legislative signature package that would incorporate key items on the party’s agenda, but they struggled for months to reach a deal that won the full support of their caucus.
Senator Joe Manchin played a key role in formulating the legislation – which only advanced after the West Virginia Democrat and Senate Majority Leader, Chuck Schumer announced a deal in late July, a big step forward for Democrats after earlier talks stalled.
Arizona Senator, Kyrsten Sinema, on Thursday night, it offered critical support after party leaders agreed to change the new tax proposals, indicating that it would “move forward” on the broad economic package.
But Sinema, Manchin and other senators worked through the weekend making crucial changes to the bill.
To avoid a last-minute collapse of the project on Sunday, Democrats came up with a plan to win over Sinema, who was worried about the impact of the 15% corporate minimum tax on private equity subsidiaries.
Senate Democrats accepted a narrower tax proposal, but instead of paying it through a change to the state and local tax deduction, which would have drawn opposition from some House Democrats, they extended the cap on the amount of losses. that companies can deduct for another two years.
Republicans used the weekend’s “vote-a-rama” to put Democrats on the spot and force politically difficult votes. They were also successful in removing a key insulin provision to cap the price of insulin to $35 a month in the private insurance market, which the Senate lawmaker ruled did not comply with Senate reconciliation rules. The $35 insulin cap for Medicare beneficiaries remains in effect.
How the bill addresses the climate crisis
While economists disagree on whether the package would, in fact, live up to its name and reduce inflation, particularly in the short term, the project would have a crucial impact on reducing carbon emissions.
The nearly $370 billion clean energy and climate package is the biggest climate investment in US history and the biggest victory for the environmental movement since the historic Clean Air Act. It also comes at a critical time: This summer has seen punishing heat waves and deadly flooding across the country, and scientists say they are both linked to global warming.
Analysis by the office of Senate Majority Leader Chuck Schumer – as well as several independent analyzes – suggest that the measure would reduce US carbon emissions by as much as 40% by 2030. Strong climate regulations from the Biden administration and action by states would be needed. to achieve President Joe Biden’s goal of reducing emissions by 50% by 2030.
The bill also contains many tax breaks aimed at lowering the cost of electricity with more renewables and encouraging more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is also just the beginning of what is needed to fight the climate crisis.
“This isn’t about the laws of politics, it’s about the laws of physics,” said Democratic Senator Brian Schatz of Hawaii, to CNN. “We all knew that when we went into this effort, we had to do what science tells us what we needed to do.”
Key health care and tax policy in the bill
The bill would authorize Medicare to negotiate the prices of certain expensive drugs administered in a doctor’s office or purchased at a pharmacy.
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 a year in 2029 and beyond.
This controversial clause is much more limited than what House Democratic leaders have supported in the past. But it would open the door to fulfilling a long-standing party goal of allowing Medicare to use its weight to lower 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 would not expire shortly after the 2024 presidential election.
To increase revenue, the bill would impose a minimum tax of 15% on the income that large corporations report to shareholders, known as accounting income, as opposed to the IRS. The measure, which would raise $258 billion over a decade, would apply to companies with profits above $1 billion.
Concerned about how this provision would affect certain businesses, particularly manufacturers, Sinema suggested that she won changes to the Democrats’ plan to reduce how companies can deduct impaired assets from their taxes. Details remain unclear.
However, Sinema vetoed his party’s effort to close the charged interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a 20% long-term capital gains tax rate. % instead of income tax rates of up to 37%.
The provision would have lengthened the amount of time investment managers’ profit-sharing must be held from three to five years to take advantage of the lower tax rate. Closing this loophole, which would have raised $14 billion over a decade, was a long-standing goal for Congressional Democrats.
In its place, a 1% tax on corporate share buybacks was added, raising another $74 billion, according to a Democratic aide.
*In update.
Source: CNN Brasil
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