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Democrats race to ready Inflation Reduction Act for vote this week


Senate Democrats are racing to ready their health-care, climate and tax package for a grueling floor fight as soon as this week, even as some in the party remain fearful about the potential for last-minute political disruptions.

Six days after striking a legislative deal to the shock of Washington, Democratic leaders still have much to do ahead of a final vote: They need to shore up support among their own ranks, steel themselves for new Republican attacks and prepare for the possibility that a coronavirus outbreak could rattle even the best laid plans around the Inflation Reduction Act.

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No less than President Biden’s agenda hangs in the balance, just three months before voters are set to head to the polls to decide if Democrats should keep their majorities in the House and Senate. But party lawmakers still have expressed a measure of confidence in recent days, hoping they might avoid the same stunning defeat that scuttled their economic ambitions last year.

To start, Senate Majority Leader Charles E. Schumer (D-N.Y.) has yet to secure the support of one of his caucus members: Sen. Kyrsten Sinema (D-Ariz.), a fiscal hawk and political moderate, has said she is still reviewing the proposal — a position her aides repeated on Monday.

In the meantime, party lawmakers have faced an intensifying onslaught of criticism from Republicans, who long have opposed their plans to combat climate change, reduce health-care costs and revise the U.S. tax code. On Monday, many top GOP lawmakers painted the Democratic package as a tax increase on Americans. Republicans cited an analysis that only looked at some of the elements in the broader spending bill, omitting key sections that aim to lower Americans’ health-care costs, in an approach Democrats described as misleading.

Even amid the uncertainty, Democrats nonetheless have remained jubilant, feeling they may be on the cusp of delivering on a long-stalled package of economic revisions after Schumer and Sen. Joe Manchin III (D-W.Va.) clinched an agreement last week. The resolution marked a stunning turnaround from the collapse that befell the party seven months ago, when Manchin scuttled the broader roughly $2 trillion bill known as the Build Back Better Act.

“Our timeline has not changed, and I expect to bring this legislation to the Senate floor to begin voting this week,” Schumer said Monday.

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The newer, smaller measure includes $433 billion in new spending to combat climate change and reduce health insurance and drug costs for millions of Americans. The investments targeting global warming constitute the largest single burst in federal spending on clean energy and emissions-fighting programs in U.S. history.

To pay for the package, Democrats have put forward a wide array of revisions to federal tax law, including a new minimum tax on billion-dollar businesses that currently pay nothing to the U.S. government. Along with their prescription drug pricing revisions, which save Medicare money, the provisions together are expected to raise about $739 billion over the next decade. That is enough offset Democrats’ newly proposed spending while paying down the deficit by $300 billion.

Already, Democrats and Republicans have squared off fiercely over the bill and its fiscal implications. Taking to the Senate floor, Minority Leader Mitch McConnell (R-Ky.) on Monday said the costs of the spending bill could fall heaviest on manufacturers in particular. Alluding to recent data from the nonpartisan Joint Committee on Taxation (JCT), he described the consequences as a “body blow on a party-line vote.”

But Democrats pointed to a follow-up analysis from JCT, released Tuesday morning, that found the manufacturing category includes tech, pharmaceutical and apparel companies. Lawmakers noted that some of the companies in those industries previously have been targeted in congressional investigations for dodging U.S. taxes, though no specific firm was mentioned in the new report.

Sen. Ron Wyden (D-Ore.), the chairman of the tax-focused Senate Finance Committee, said in a statement that it reflected companies “playing the most games, and avoiding tax by manufacturing their drugs, phones, and shoes abroad.”

GOP lawmakers also have argued the tax proposals violate Biden’s pledge not to raise rates on Americans who make less than $400,000 annually, pointing to another set of JCT data that suggest companies could pass a new minimum tax onto Americans.

Democrats, however, have sharply rejected that reasoning: They say their tax doesn’t target families and aims instead to make companies pay taxes that they should have been paying in the first place. And Democrats add that JCT did not factor into their math other benefits afforded by their bill, including provisions that help Americans pay for prescription drugs and health insurance.

“The more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods,” said Sen. Mike Crapo (R-Idaho), the top Republican on the Senate Finance Committee, in a statement Monday.

In response, Manchin on Monday stressed that there is “not one penny of change in taxes,” telling reporters that a minimum rate on companies is “only fair.” Schumer, separately, said it would “close loopholes long exploited by the largest corporations.”

For now, Senate Democrats have focused much of their efforts on preparing the bill for the floor. The task has spanned countless meetings with the chamber’s parliamentarian, as party lawmakers look to ensure their spending proposal adheres to the strict rules of reconciliation. The tactic allows Democrats to adopt their bill using their 51-vote, tiebreaking majority, rather than the usual 60 votes required in the chamber.

A final vote could still be days away, since reconciliation opens the door for lawmakers to offer an unlimited number of amendments. Republican aides have signaled they plan to put forward as many politically challenging proposals as they can, making it hard for Democrats to stay together, keep their bill intact and hold a vote swiftly.

More unpredictably, however, the coronavirus could further dent Democrats’ plans, since the party cannot afford absences that deny them must-have votes. Manchin has recovered from his coronavirus diagnosis, but another Democrat, Sen. Richard J. Durbin, (Ill.), tested positive at the end of last week. Sen. Patrick J. Leahy (D-Vt.), meanwhile, has been out for weeks recovering from hip surgery, though he is expected to return for the consideration of a reconciliation bill.

And Republicans on Monday lost Sen. John Cornyn (R-Tex.) to a covid-19 infection, tipping the scales at least for now toward Democrats’ favor. Cornyn, however, pledged to be back as soon as federal health guidelines allow — “if it happens,” he tweeted, referring to the prospect of a final vote.

Yet Democrats could face additional roadblocks as a result of their own members, particularly Sinema, who has not yet offered her final views on the bill. Her earlier objections to the Build Back Better Act forced party leaders to whittle down their plans considerably. The Arizona moderate last year did not support Democrats’ initial efforts to raise tax rates on corporations and wealthy Americans, leaving them no choice but to abandon a central element of Biden’s agenda.

Instead, Democrats settled on the corporate minimum tax, which appeared at the time to have Sinema’s blessing. But it remains unclear if she still supports that policy, given the broader changes in the economy, since her party last tried to move a spending package. Sinema previously expressed concern with other elements of the plan, including Democrats’ renewed effort to close what is known as the carried interest loophole. The policy allows private equity, real estate and hedge fund managers, among others, to pay less in taxes.

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