By Clare Foran and Kristin Wilson, CNN
The House of Representatives is set to vote on Friday to pass a $750 billion health care, energy and climate bill from Democrats, in a significant victory for President Joe Biden and his party.
Once the Democratic-controlled House approves the bill, it would then go to Biden to sign into law.
Final passage of the bill would give Democrats a chance to achieve major policy goals ahead of the upcoming midterm elections, at a critical time when the party is battling to retain control of its narrow majorities in Congress.
The sweeping bill – named the Inflation Reduction Act – would represent the largest climate investment in US history and make major changes to health policy by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extending health care subsidies expiring for three years. The legislation would reduce the deficit, be paid for by new taxes – including a minimum 15% tax on large corporations and a 1% tax on stock buybacks – and strengthen the collection capacity of the Internal Revenue Service. .
It would generate more than $700 billion in government revenue over 10 years and spend more than $430 billion to reduce carbon emissions and expand health insurance subsidies under the Affordable Care Act and use the rest new revenue to reduce the deficit.
Speaker Nancy Pelosi promised to push the bill through the House in a recent letter to fellow Democrats.
“On Friday, House Democrats will pass and send to the President the historic Cut Inflation Act,” Pelosi wrote. “This life-changing legislation increases the leverage of the people’s interest over the special interest.”
House to act after Senate Democrats pass bill
The House is considering the bill after it passed the Senate following a marathon, overnight session of contentious amendment votes.
In the Senate, the bill passed by a final vote of 51 to 50, with Vice President Kamala Harris breaking the tie.
Senate Democrats, who control only a narrow 50-seat majority, ultimately stuck together to pass the legislation. And they used a special, filibuster-proof process known as reconciliation to approve the measure without a Republican vote.
The bill’s approval in the House marked an important milestone for Senate Democrats, who had long hoped to pass a signature legislative package but had struggled for months to reach a deal that had the full support of their huddle.
Sen. Joe Manchin played a key role in crafting the legislation – which only moved forward after West Virginia Democrat and Senate Majority Leader Chuck Schumer announced a deal in late July, a key breakthrough for Democrats after previous negotiations failed.
Arizona Democratic Senator Kyrsten Sinema was also at the center of efforts to pass the bill — and Sinema, Manchin and other senators worked all weekend to make changes to the bill.
The passage in the Senate came after a long series of amendment votes known as “vote-a-rama” that lasted nearly 4 p.m. from Saturday evening until Sunday afternoon.
Republicans used the “vote-a-rama” weekend to put Democrats on the spot and force politically difficult votes. They also succeeded in removing a key provision aimed at capping the price of insulin at $35 per month in the private insurance market, which the Senate parliamentarian found inconsistent with Senate reconciliation rules. The $35 insulin cap for Medicare beneficiaries remains in place.
Ultimately, Republicans lined up to oppose the bill. Senate Minority Leader Mitch McConnell said in a statement that the bill includes “massive job-killing tax hikes” and amounts to “a war on American fossil fuels.” The Kentucky Republican said Democrats “don’t care about the priorities of middle-class families.”
How the bill addresses the climate crisis
While economists disagree on whether the package would, in fact, live up to its name and reduce inflation, especially in the short term, the bill would have a crucial impact on reducing carbon emissions.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history and the environmental movement’s biggest victory since the historic Clean Air Act.
Analysis from Schumer’s office — along with multiple independent analyzes — suggests the measure would reduce U.S. carbon emissions by up to 40% by 2030. Tough climate regulation from the Biden administration and action by states would be needed to meet Biden’s goal to cut emissions. 50% by 2030.
The bill also contains numerous tax incentives intended to reduce the cost of electricity with more renewable energy and encourage more American consumers to switch to electricity to power their homes and vehicles.
Key Health Care and Tax Policies in the Bill
The bill would empower Medicare to negotiate the prices of certain expensive drugs administered in doctors’ offices or purchased at pharmacies. The Secretary of Health and Human Services would negotiate prices for 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number would increase to 20 drugs per year for 2029 and beyond.
The controversial provision is far more limited than one that House Democratic leaders have supported in the past. But it would open the door to achieving a long-standing party goal of allowing Medicare to use its weight to cut drug costs.
Democrats also plan to extend enhanced federal grants for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they wouldn’t expire right after the 2024 presidential election.
To boost revenue, the bill would impose a minimum tax of 15% on income large corporations return to shareholders, known as accounting income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies whose profits exceed $1 billion.
Concerned about how the provision would affect some businesses, particularly manufacturers, Sinema suggested she had secured changes to the Democrats’ plan to reduce how businesses can deduct impaired assets from their taxes. The details remain unclear.
However, Sinema reversed his party’s efforts to tighten the deferred interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a capital gains tax rate. long-term capital of 20% instead of income tax rates of up to 37%.
The provision would have extended from three to five years the length of time that investment managers’ profit shares must be held to take advantage of the reduced tax rate. Closing that loophole, which reportedly raised $14 billion over a decade, was a longtime goal of congressional Democrats.
In its place, a 1% excise tax on corporate stock buybacks was added, bringing in an additional $74 billion, according to a Democratic aide.
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CNN’s Alex Rogers, Ella Nilsen, Tami Luhby, Katie Lobosco and Matt Egan contributed to this report.