WASHINGTON — Sen. Joe Manchin III of West Virginia, a leading centrist Democrat, announced Wednesday that he has agreed to include hundreds of billions of dollars for climate and energy programs and tax increases. . He came less than two weeks after his hopes for such a deal were suddenly overturned this summer.
the package This would secure $369 billion for climate and energy proposals, the most ambitious climate action Congress has ever taken, and generate an estimated $451 billion in new tax revenue over a decade, while Reduce federal spending on prescription drugs by $288 billion. According to a summary circulated Wednesday evening..
The result of a deal announced by Manchin and New York Democrat Majority Senator Chuck Schumer that would cut the federal deficit by about $300 billion while lowering the cost of health care, prescription drugs and electricity. I’m doing it. ..
While the plan is nowhere near the ambitious domestic policies and tax measures President Biden proposed last year, Democrats are phasing ahead of the midterm elections, which are likely to be shaped by voter concerns about rising costs. The highest level of inflation in 40 years has cracked U.S. consumers’ wallets this year.
The announcement suggested that Democrats could move to salvage key pieces of the domestic agenda in the coming days.Top Democrats released law We are aiming to vote as early as next week on Wednesday night.
“This is the action the American people have been waiting for,” Biden said in a statement, calling for early passage of the bill in both houses. “This not only addresses today’s issues – high health care costs and overall inflation – but it also addresses investments in energy security for the future.”
It’s not clear why Manchin changed his mind, as he had said two weeks ago that he could not support such a package until he saw July inflation. But in recent days, quiet talks have resumed between Manchin, Schumer and their staff, according to people familiar with the matter.
The sudden announcement came just hours after the passage of a gigantic industrial policy bill aimed at boosting US competitiveness against China’s marquee domestic policy bill against Republican opposition. However, the bill still has to pass through the House, and Republican leaders in the House said after news of the deal they would instruct their peers to oppose it.
With the Senate split 50-50 and Republicans uniformly opposed, Democrats sought unanimous support within their party to pass the plan under special rules that shielded certain budget bills from filibusters. and Vice President Kamala Harris need a tie-breaking vote. Mr. Manchin’s resistance has always been the main obstacle to doing so, giving him an effective veto over its content and giving him the final say on whether any bill can pass the Senate. giving to him
Just because he accepted the plan there was no guarantee that it would move forward. Several senators declined to comment until they learned more about it when they heard it Wednesday night. opposition to domestic policy measures. (A spokeswoman said senators need to review the bill.)
By evening, however, several liberal Democrats had rallied in support of the plan.
In a separate statement, Schumer declared, “This bill will be the largest climate protection bill ever passed by Congress,” adding that Manchin’s “willingness to get involved and commitment to achieving the goals.” Thank you. agreement. “
The tax increases included in the deal will apply primarily to multinationals and private equity firms, with a crackdown on high-income individuals and companies trying to avoid paying taxes.
One clue to Manchin’s possible change of heart was securing promises from both Biden and California House Speaker Nancy Pelosi that Congress would approve another measure to address the permit, the people said. It was on the line of a joint announcement with Mr. Schumer. of energy infrastructure, potentially including natural gas pipelines, by the end of the September 30 fiscal year.
This could pave the way for Manchin’s personal interest in a project, the Mountain Valley Pipeline, which will transport Appalachian shale gas from West Virginia to Virginia.
Democrats said the Senate could take up the bill by next week, but many legislative and procedural hurdles remain. As we plan to move it under an arcane budgeting process known as , we have to adhere to strict budgeting rules.
In a joint statement, Manchin and Schumer said the bill would “make a historic advance in deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by about 40% by 2030.” will do,” he said. The two senators added, “I urge every member of the United States Senate to support this important piece of legislation.”
Republicans slammed the announcement and reiterated their opposition to the Democrats’ plan.
“Democrats are already crushing American families with historic inflation,” McConnell said on Twitter. “They now want to mount a huge tax increase that will hit workers and take away thousands of U.S. jobs. First, they ruined your family’s budget. wants to kill your job too.”
South Carolina Republican Senator Lindsey Graham expressed disbelief that Mr. Manchin “agreeed to massive tax increases in the name of climate change when the economy is in recession.” .
“I hope common sense will eventually prevail,” he added. “What I am hearing about the terms of this latest settlement agreement makes no sense.”
But in a separate statement, Manchin hailed the deal as good for the economy, the climate and people’s wallets.
“Instead of risking more inflation with trillions of new spending, this bill would cut the inflation tax Americans are paying, lower the cost of health insurance and prescription drugs, and keep us afloat. We will ensure that our country invests in the energy security and climate change solutions needed to become a global superpower through innovation, not exclusion,” Manchin said.
He said the bill, called the Inflation Reduction Act of 2022, would be sharply differentiated from Biden’s proposed multitrillion-dollar ambitious domestic policy plan, and Democrats in Congress passed most of last year. I worked hard to
“Build Back Better is dead. Instead, we have an opportunity to make our country stronger by uniting Americans,” he said.
Manchin also preemptively fought off lingering calls from some House Democrats to remove caps on state and local tax deductions as part of the final package, saying, “Our tax code is loopy. We should not give preferential treatment to the red state or blue state elites,” he added. like salt.
The deal is a far cry from Biden’s initial proposal to significantly expand the social safety net program and pay for it by taxing businesses and high-income earners. But I will not support any proposals on climate change or taxation in the short term, as Mr. Manchin personally to party leaders this month and Mr. Manchin personally to party leaders this month.
These two health plans will allow Medicare to directly regulate the price of prescription drugs for the first time. from 2023It will also extend the premium subsidy expansion, first pushed in 2021 by Democrats as part of the $1.9 trillion pandemic aid bill, through 2025 to prevent it from expiring at the end of the year.
The plan would raise most of the estimated $313 billion in new tax revenue by imposing a minimum tax on the so-called book income of large companies such as Amazon and FedEx, which currently have tax credits and other tax rate reduction measures. It will be. Below the US corporate tax rate of 21%.
Raise another $14 billion by easing tax breaks on income earned by venture capitalists and private equity firms. This has long been a goal of the Democratic Party.
We are investing $30 billion in production tax credits for solar panels, wind turbines, batteries and critical mineral processing. His $10 billion tax credit for building clean tech manufacturing facilities. $500 million goes to heat pumps and critical mineral processing through the Defense Production Act.
The deal also includes a $7,500 means-tested tax credit to make new electric vehicles more affordable, and a $4,000 tax credit for used electric vehicles, according to the package outline. Both credits are only offered to low- and middle-income consumers.
The measures also include methane tariffs starting in 2025.
$60 billion to address the disproportionate burden of pollution on low-income and communities of color; $27 billion to a “green bank” to finance clean energy projects; includes $20 billion in programs that can reduce emissions in agricultural sector.
The announcement of the deal surprised environmental advocates.
“Honestly, I don’t know what to say,” said Samuel Ricketts, co-founder and senior adviser to environmental group Evergreen Action. This is an opportunity for a major breakthrough in climate change progress.”
Manchin said the plan includes “realistic energy and climate policies” and “ensures that America’s energy is affordable, reliable, clean and safe while decommissioning.” It enables carbonization,” he said.
“As a global superpower, it is imperative that we do not undermine our superpower status by getting rid of reliable and affordable fossil fuel energy before new technologies are certainly ready to carry the load. It’s important,” Manchin said in a statement, emphasizing investments in fossil fuel energy and renewable energy.
Biden promised to cut US emissions by about 50% by the end of the century. Scientists say this is an important goal to limit global temperature rise to 1.5 degrees Celsius by the end of the century. Beyond that, scientists say the risk of devastating heatwaves, fires and floods increases significantly.
The package, if successful, could bring the United States closer to Biden’s goals, according to a synopsis of the deal released by Democrats.
Katie Edmondson When Stephanie Lai Contribution report.