Manchin and Senate leader Schumer agree on health, energy and taxes

Sen. Joe Manchin III and Senate Majority Leader Charles E. Schumer said Wednesday they have reached a surprise deal on a vast plan to cut health care and energy costs, cut carbon emissions, fight inflation and allow Medicare to negotiate drug prices.

This marks a breakthrough in a bill that Democrats have been trying to agree on for months.

The deal could give Democrats a chance to make progress on some of their key policy priorities ahead of the midterm elections.

But it’s not clear how the plan will appeal to Manchin’s fellow Democrats, many of whom have been frustrated by West Virginians’ reluctance to adopt progressive policies and, in the eyes of many House Democrats, to negotiate in good faith.

The political imperative of the Democrats can replace this causticity. The agreement, which seemed to take many on Capitol Hill by surprise, came as Democrats approach the August recess, after which most legislation usually stalls in an election year.

Proponents say the plan will boost cleaner energy production and cut carbon emissions by about 40% by 2030; lower Affordable Care Act contributions for some Americans; Limit the out-of-pocket cost of a Medicare prescription to $2,000; and raise taxes on corporations and the super-rich.

The plan will raise about $739 billion by introducing a minimum corporate tax of 15% and allowing Medicare to negotiate prescription drug prices.

It will spend $369 billion on energy security and climate change policy and more than $300 billion to reduce the deficit, according to the plan summary.

Schumer released the text of the bill late Wednesday night and said he expects a vote in the Senate next week.

As a sign of Manchin’s interest in fighting inflation, the bill is now called the Inflation Reduction Act of 2022.

Manchin, the most conservative Democrat in the Senate, has been arguing for months with many members of his party over what was once a $3.5 trillion, 10-year social spending and climate bill. The original plan included funding for progressive programs such as childcare and universal kindergarten.

In December, Manchin said he would not support such a plan. Negotiations continued intermittently until two weeks ago. At the time, negotiations seemed to have stalled as Manchin said he would not support the plan until he saw inflation data for July.

President Biden urged Congress to pass what he called a “historic” deal as soon as possible.

“This is the action the American people have been waiting for,” he said in a statement Wednesday. “It solves the problems of today – high health care costs and general inflation, as well as investments in our energy security in the future.”

The bill will be adopted in accordance with a procedure that does not allow for obstruction by the Republican minority. Given the perceived opposition of the Republican Party, this measure will require the support of the entire Democratic caucus in the Senate and almost all Democrats in the House of Representatives.

Climate hawk Sen. Brian Schatz (Hawaii) said the climate provisions would include tax credits and grants, as well as investment in clean energy and transportation, energy storage and other measures.

The policy makes this law “a real climate bill,” he said. “The planet is on fire. Reducing emissions is key. This is huge progress. Let’s do that”.

Senate Minority Leader Mitch McConnell (R-Kentucky) said Republicans will block a separate semiconductor stimulus bill if Democrats continue to do so. The bill passed the Senate just hours before Manchin and Schumer announced their deal.

“Democrats have already crushed American families with historic inflation,” McConnell tweeted after the deal was announced. “Now they want to pile on gigantic tax increases that will hit workers and take away many thousands of American jobs.”

“First they killed your family’s budget,” he added. “Now they want to kill your work too.”