US Democrats climate, energy, tax bill clears initial Senate hurdle

The vote came after the Senate parliamentarian gave a thumbs-up to most of Democrats' revised 755-page bill. But Elizabeth MacDonough, the chamber's nonpartisan rules arbiter, said Democrats had to drop a significant part of their plan for curbing drug prices. MacDonough said Democrats violated Senate budget rules with language imposing hefty penalties on drug makers who boost their prices beyond inflation in the private insurance market.

Those were the bill's chief pricing protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or bought on their own.

Other pharmaceutical provisions were left intact, including giving Medicare the power to negotiate what it pays for drugs for its 64 million elderly recipients, a longtime Democratic aspiration.

Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a USD 2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries. The time is now to move forward with a big, bold package for the American people, said Senate Majority Leader Chuck Schumer, D-NY.

This historic bill will reduce inflation, lower costs, fight climate change. It's time to move this nation forward.

Senate Minority Leader Mitch McConnell, R-Ky., said Democrats are misreading the American people's outrage as a mandate for yet another reckless taxing and spending spree.

He said Democrats have already robbed American families once through inflation and now their solution is to rob American families yet a second time. Saturday's vote capped a startling 10-day period that saw Democrats resurrect top components of Biden's agenda that had seemed dead.

In rapid-fire deals with Democrats' two most unpredictable senators first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema Schumer pieced together a package that would give the party an achievement against the backdrop of this fall's congressional elections.

Saturday's vote capped a startling 10-day period that saw Democrats resurrect top components of Biden's agenda that had seemed dead.

A White House statement said the legislation would help tackle today's most pressing economic challenges, make our economy stronger for decades to come, and position the US to be the world's leader in clean energy.

Assuming Democrats fight off a nonstop vote-a-rama of amendments many designed by Republicans to derail the measure they should be able to muscle the measure through the Senate.

What will vote-a-rama be like? It will be like hell, Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said of the approaching GOP amendments.

He said that in supporting the Democratic bill, Manchin and Sinema are empowering legislation that will make the average person's life more difficult by forcing up energy costs with tax increases and making it harder for companies to hire workers.

The bill offers spending and tax incentives favoured by progressives for buying electric vehicles and making buildings more energy efficient. But in a bow to Manchin, whose state is a leading fossil fuel producer, there is also money to reduce coal plant carbon emissions and language requiring the government to open more federal land and waters to oil drilling.

Expiring subsidies that help millions of people afford private insurance premiums would be extended for three years, and there is USD 4 billion to help Western states combat drought.

A new provision would create a USD 35 monthly cap for insulin, the expensive diabetes medication, for Medicare and private insurance patients starting next year. It seemed possible that language could be weakened or removed during debate. Reflecting Democrats' calls for tax equity, there would be a new 15 per cent minimum tax on some corporations that earn over USD 1 billion annually but pay far less than the current 21 per cent corporate tax.

Companies buying back their own stock would be taxed 1 per cent for those transactions, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to strengthen its tax collections. While the bill's final costs are still being determined, it overall would spend close to USD 400 billion over 10 years to slow climate change, which analysts say would be the country's largest investment in that effort, and billions more on health care.

It would raise more than USD 700 billion in taxes and from government drug cost savings, leaving about USD 300 billion for deficit reduction over the coming decade a blip compared to that period's projected USD 16 trillion in budget shortfalls. Democrats are using special procedures that would let them pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.

The parliamentarian decides whether parts of legislation must be dropped for violating those rules, which include a requirement that provisions be chiefly aimed at affecting the federal budget, not imposing new policy.