WASHINGTON — Senate Democrats narrowly passed a sweeping climate and economic package on Sunday, putting President Joe Biden and his party on the cusp of a big legislative victory just three months before the crucial November midterm elections.
After a marathon overnight Senate session, the 51-50 vote was strictly along party lines, with all Republicans voting no and all Democrats voting yes. After Vice President Kamala Harris cast the tie-breaking vote, Democrats stood and applauded.
The legislation, called the Inflation Reduction Act, now heads to the House, which plans to return from its summer recess on Friday, pass the legislation and send it to Biden’s desk for his signature.
"It’s been a long, tough and winding road, but at last we have arrived. I know it’s been a long day and a long night. But we’ve gotten it done today," Senate Majority Leader Chuck Schumer said on the Senate floor before the final vote.
"After more than a year of hard work, the Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century."
The 755-page bill includes $430 billion to combat climate change and extend health care coverage, paid for with savings on prescription drugs and taxes on corporations. It puts hundreds of billions of dollars toward deficit reduction.
The bulk of the spending — more than $300 billion — covers investments to tackle climate change and boost clean energy, including incentives for farmers and ranchers to reduce methane emissions; an extension of the electric vehicle tax credit; and the launch of a National Climate Bank that would make investments in clean energy technologies and energy efficiency.
The legislation would empower Medicare to negotiate prices with drug companies for the first time, cutting prescription drug prices for people 65 and older. The savings would help pay for a three-year extension of Affordable Care Act subsidies, which would stave off an expected rise in insurance premiums that were set to go into effect in 2023.
The package includes a cap on the price of insulin for those 65 and older on Medicare, but Republicans successfully removed a $35 cap on insulin in the private market.
The bill also raises revenue through a new 15% minimum tax on large corporations, though accelerated depreciation would be exempted — a key ask of centrist Sen. Kyrsten Sinema, D-Ariz., who extracted several tax changes from leadership before getting on board with the package.
Sinema also successfully killed a provision to close the carried interest tax loophole that benefits private equity and hedge fund managers. It was replaced, with Sinema's support, by a 1% excise tax on stock buybacks that actually pulls in more revenue than the carried interest provision would have.
The legislation came together quickly. Less than two weeks ago, Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W. Va., announced a surprise deal on some of the party's major agenda items that many Democrats believed had no chance of becoming law this year.
Democrats count the sprawling package as just the latest in an unusual streak of legislative wins for a Congress typically mired in partisan gridlock. There was a $1 trillion infrastructure package last year, the most significant gun control legislation in a generation, a major semiconductor and science competitiveness package, a bill to help veterans exposed to burn pits and a vote to admit Finland and Sweden into NATO amid a showdown with Russia.
"Mitch McConnell and Republicans have been standing with Big Oil, standing with Big Pharma to protect their profits, and we have been for years trying" to lower costs, Sen. Debbie Stabenow, D-Mich., head of the Democratic Policy Committee, told NBC News.
"This is the big moment here with these forces," she said, "and the people are going to win."
Sen. Cory Booker, D-N.J., a progressive and onetime 2020 presidential rival to Biden, also noted Congress' recent strides.
"I don't know if there's been any Congress and president that has been as productive as we've seen in this Congress," he said in an interview. "This president keeps putting up historic bills that are meeting the urgencies of the American public."
Sen. Gary Peters, D-Mich., Senate Democrats' campaign chief this cycle, said the reconciliation package makes his job easier as he tries to protect incumbents and grow his party's fragile majority.
"Lowering drug prices, lowering the cost of health insurance for millions of Americans, dealing with climate change motivates our base in a big way, especially young voters," Peters said.
There was little Republicans could do to stop the massive spending package. They couldn't filibuster it since Democrats are using the special budget reconciliation process that allows them to pass a bill with a simple majority — without needing support from a single Republican.
But Republicans found ways to make things painful. During the "vote-a-rama" — a process in which senators can offer virtually unlimited amendments — Republicans late Saturday night and through Sunday morning forced vulnerable Democrats to take tough vote after tough vote on politically tricky issues.
Sen. John Barrasso, R-Wyo., offered an amendment to cut gas prices by boosting domestic energy production, while Sen. James Lankford, R-Okla., offered one that would provide additional funding for the implementation of Title 42, the controversial public health rule that blocked asylum seekers trying to cross the border. But Democrats stayed unified and defeated nearly all GOP amendments.
The package faced turbulence near the end of the vote-a-rama. Sinema and six other centrist Democrats helped pass a Republican amendment that would exempt some subsidiaries owned by private equity firms from the new corporate minimum tax. The amendment could have created a major problem in the House since it was paid for by extending the cap for state-and-local tax (SALT) deductions — something that northeastern Democrats opposed.
But Democrats found a creative solution: Sen. Mark Warner, D-Va., offered a substitute amendment, replacing the SALT pay-for with a two-year loss limitation extension that kept Democrats' fragile coalition together.
In floor speeches and hallway interviews, Republicans argued that the bill's name was misleading and would do little to bring down record inflation under Biden.
Senate Minority Leader Mitch McConnell, R-Ky., slammed it as "yet another reckless taxing-and-spending spree." And Senate Minority Whip John Thune, R-S.D., called it "Democrats' grab bag of bad ideas." Others said the hundreds of billions in tax hikes on corporations would propel the country into a recession.
“I think we’re in the early stages of stagflation. And the worst thing you can do in the early stage of stagflation is to slow the economy even more which … new taxes will do,” said Sen. John Kennedy, R-La.
“If they want to celebrate a tax-and-spend, jobs-killing, wasteful bill at a time when inflation is high, I think their celebration is misplaced,” Sen. Cynthia Lummis, R-Wyo., said, adding that she was "disappointed" her moderate Democratic colleagues got on board while recognizing that Americans are struggling with high prices for gas, groceries and travel.
Some criticism came from within Democrats' own caucus as well. Sen. Bernie Sanders, I-Vt., the progressive icon who caucuses with Democrats, ripped the package for not going far enough. Unlike Biden's original Build Back Better package, the slimmed-down inflation bill had no child tax credits, universal preschool, free community college or Medicare expansion.
"There is nobody who can deny that this legislation does not address the major crises facing working families," Sanders told reporters. "This bill has nothing to say about the housing crisis, the child care crisis, the crisis of higher education, the crisis of millions of Americans. Older Americans don’t have any teeth in their mouth because we haven’t expanded Medicare."