WASHINGTON — It has been over a year in development and has seen many ups and downs. Now, a Democratic economic package focused on climate and Health care faces hurdles, but appears headed toward passage of the party line by Congress next month.
Passage would allow President Joe Biden and his party to claim a win over top priorities as the November election approaches. They haven’t forgotten that they came close to passing a much grander version of the bill last year, only to see Sen. Joe Manchin, DW.Va., one of its most conservative and maverick members, torpedo it at the last minute.
This time, Senate Majority Leader Chuck Schumer, DN.Y., crafted a compromise package with Manchin, to everyone’s surprise, transforming West Virginian from pariah to partner. The measure is more modest than previous versions, but it still checks the boxes on the issues that make Democrats dizzy.
This is what they face:
WHAT’S IN THERE?
The measure would raise $739 billion in revenue over 10 years and spend $433 billion. There would be more than $300 billion left to trim federal deficits.
Those are significant cuts in red ink. But they’re tiny compared to the $16 trillion in new debt that the nonpartisan Congressional Budget Office estimates will rack up over the next decade.
The package would save consumers and the government money by lowering prescription drug prices and subsidizing Health insurance for millions of people. It would bolster the IRS budget so the tax agency can collect more unpaid taxes.
The plan would encourage clean energy and offshore power drilling, a balance demanded by Manchin, a champion of fossil fuels. It would also collect new taxes from the biggest corporations and wealthy hedge fund owners.
It’s a fraction of the $3.5 trillion package Biden proposed early in his presidency, which also provided for initiatives like paid family leave and universal preschool. It’s also smaller than the roughly $2 trillion alternative the House approved last November after Manchin demanded cuts and then derailed the deal anyway, citing fears of inflation.
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NOW IT’S CALLED “INFLATION REDUCTION LAW”, BUT…
…will he do that? It certainly could, but there are dissenters.
First, some context.
According to a measure of inflation closely watched by the Federal Reserve, prices rose 6.8% in June from a year earlier, the biggest increase in four decades. That followed government figures showing the economy contracted again last quarter, fueling concerns about a recession.
“Improved tax collection, drug savings and deficit reduction would put downward pressure on inflation,” the Committee for a Responsible Federal Budget said Friday. In what passes for a glowing critique, the bipartisan fiscal watchdog group called the legislation “exactly the kind of package lawmakers should put in place to help the economy in a variety of ways.”
“Deficit reduction almost always reduces inflation,” Jason Furman, a Harvard University economics professor and one of President Barack Obama’s top economic advisers, wrote in The Wall Street Journal on Friday. He said the move would also “reduce inflation by slowing prescription drug price growth.”
A more sobering assessment came from the University of Pennsylvania’s Penn Wharton budget model, which looks at economic issues.
“The law would very slightly increase inflation through 2024 and decrease inflation thereafter,” the group wrote Friday. “These point estimates are statistically indistinguishable from zero, indicating little confidence that the legislation will have any impact on inflation.”
A chorus of Republicans say the Democrats’ bill would be very damaging. Senate Minority Leader Mitch McConnell, R-Kentucky, calls it “a giant package of huge job-killing new tax increases, Green New Deal madness that will kill American energy, and drug socialism.” prescription drugs that will leave us with fewer new resources to save lives.” medicines.”
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CHANGES AHEAD
The 725-page measurement will probably still change a bit.
Schumer said last week that Democrats planned to add language aimed at lowering patients’ costs for insulin, the diabetes drug that can cost hundreds of dollars a month.
Insulin price cuts were a highlight of Democrats’ biggest package last year, including a $35 monthly limit for patients who get the drug through Medicare or private insurers. But that fell this year when the measure was cut.
Sens. Jeanne Shaheen, DN.H., and Susan Collins, R-Maine, have authored a bill capping the price of insulin. The prospects for that measure dimmed after the nonpartisan Congressional Budget Office estimated it would cost about $23 billion and actually increase the price of insulin. The two lawmakers also haven’t produced the 10 Republicans it would take to succeed in the 50-50 Senate, where most bills need 60 votes.
It’s unclear what the Democrats’ new insulin language would do. Previous language requiring private insurers to set a $35 monthly insulin limit may violate House rules, which only allow provisions that primarily affect the federal budget.
Also, under the process Democrats are using to move the measure through the House by simple majority, with Vice President Kamala Harris’s tie-breaking vote, she would face multiple amendments in a voting session that can last all night. and there is no telling if some will pass.
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PERSPECTIVES
All Republicans seem willing to vote “no.”
Democrats will need 50 votes of their own in the Senate, where the unpredictable Sen. Kyrsten Sinema, D-Arizona, has yet to voice her opinion.
Democrats cannot lose more than four votes in the House to succeed there. House Speaker Nancy Pelosi, D-Calif., said Friday that when the Senate passes the package, “we will pass it.”
Schumer wants Senate approval next week. He acknowledged that the timeline “is going to be difficult” because it will take time for the House MP to make sure the bill conforms to Senate rules.
This will also bring luck. All 50 Democrats, including the two independents who support them, will need to be healthy enough to show up and vote.
That is not guaranteed. The latest extremely contagious variant of COVID-19 is spreading across the country. And the chamber has 33 senators who are 70 or older, including 19 Democrats.
Sen. Richard Durbin, a 77-year-old Democrat from Illinois, was the latest senator to announce that he had contracted the disease. Sen. Patrick Leahy, D-Vt., 82, has been out following hip surgery. Both are expected to return next week.