Senate Democrats send their big tax, climate package to House: 5 takeaways
(The Hill) — Senate Democrats after a very long series of votes have approved a massive $740 billion bill that will make significant investments in climate change while lowering the price of prescription drugs and taking steps toward a more equitable tax code.
That the Senate was able to get the bill done is somewhat of a surprise if you look back to December 2021, when Sen. Joe Manchin (D-W.Va.) appeared to torpedo the efforts with an announcement on Fox News that he could not support the measure because of inflation.
It was just the first time Manchin appeared to kill the bill, only for him to save it with a last-minute deal with Senate Majority Leader Charles Schumer (D-N.Y.) late last month that caught most of Washington and the nation by surprise.
The package now moves to the House, where it is expected to be approved despite opposition from Republicans and some disappointment from Democrats about its size.
Here are five takeaways.
Senate Democrats stuck together
The Senate was in session Saturday, beginning a vote-a-rama at 11:30 p.m. Saturday that continued through Sunday in which Democrats blocked GOP amendment after GOP amendment.
Republicans had a few goals with their amendment strategy.
One was to force Democrats into tough votes ahead of the midterm elections on gas prices, taxes, immigration and other issues.
Another aim was to add a “poison pill” amendment to the package that might weaken its support in the House and force the whole enterprise to collapse.
None of these amendments were added to the package — at least for the first 14 or 15 hours of the marathon because Democrats were able to stick together to fight them off.
That changed after 2 p.m. Sunday, when Sen. Kyrsten Sinema (Ariz.) and six other Democrats backed a measure that raised revenue by extending for one year the cap on state and local tax (SALT) deductions that was a key feature of the 2017 Trump tax cut bill.
Democrats initially worried passage of that amendment could hurt the bill, but after its passage, they offered another amendment that replaced the SALT cap extension with a different tax provision.
It was somewhat predictable that Democrats stuck together since it was a necessity for final passage. However, it was still notable given the stark differences between centrists like Manchin and Sinema and progressive voices such as Sen. Bernie Sanders (I-Vt.).
During the final vote, several Democrats offered hugs to Sinema. The relief on members’ faces as they said goodbye ahead of the August recess was clear.
Sanders, Dems both showed some frustration
It wasn’t all love and roses for Democrats during the marathon night of votes.
While the larger story was Democrats battling off GOP amendments, Democrats also killed off multiple amendments from one of their own caucus members: Sanders, the two-time presidential candidate.
In one of the night’s most heated moments on the floor, Sanders offered an amendment to revive the expanded child tax credit, which lapsed late last year, as part of the Democrats’ sprawling package.
“Pathetically, the United States has the highest child poverty rate of almost any major country on Earth, and it is especially high among young people of color,” Sanders said. “This is the wealthiest nation on Earth, we should not have the highest rate of childhood poverty of almost any country.”
The Sanders measure would have restored an expanded $300 credit for four years and would have been paid for by raising the corporate tax rate to 28 percent from 21 percent.
Democrats argued that while much of the party agreed with the Sanders proposal if added it would have sunk the entire package.
“Sen. Sanders is right, the child tax credit is one of the most important things this body did. It brought down the child poverty rate by 40 percent almost immediately,” said Sen. Sherrod Brown (D-Ohio), who nonetheless urged colleagues against voting for the amendment to avoid bringing “the bill down.”
As the debate continued and Sanders pushed back at Brown, asking what harm there would be in at least forcing those Democrats opposed to the tax credit from killing it while the rest of the caucus— 48 senators in all — voted for it, Brown could be heard saying “come on, Bernie.”
In the end, Democrats did stick together — with Republicans but without Sanders — voting down the amendment 1-99.
One senator has a lot of power in the 50-50 Senate
At one time the package House and Senate Democrats envisioned would have included the child tax credit and a lot more.
The package being considered last fall would have topped $3 trillion, representing one of the most ambitious legislative plans in U.S. history.
What ended up passing is a lot smaller — mostly because of Manchin and Sinema, who both opposed various parts of the initial plan.
The result reflected the essential truth that Democrats couldn’t do much of anything without Manchin and Sinema since no Republicans were going to join them on their legislation. That meant they needed complete unity in their ranks in the Senate to get anything done.
Out went the elimination of the “carried interest loophole,” a casualty to Sinema that was meant to raise taxes on hedge fund money managers.
In came language to bolster oil and gas drilling in a package that overall is meant to steer the U.S. away from dependence on fossil fuels. That was a concession to Manchin, who also whittled the size of the bill down largely because he said he did not want it to increase inflation.
Democrats essentially had to buy off Manchin and then Sinema to get the bill through the Senate, and both used their leverage to get a lot of what they wanted.
It’s another lesson in the basic politics of the Senate. If your vote is needed, you can get paid in provisions for your state and interest, something both Manchin and Sinema got in spades.
Sinema flexed her political muscle early in the negotiations when she ruled out proposals to increase the corporate tax rate from 21 percent to 25 percent and to raise the top marginal income tax rate on wealthy individuals.
Democratic colleagues were stunned by her hard line as they assumed corporate and top-bracket income tax breaks would be at the core of any budget reconciliation package.
Some other Democrats tried to use their leverage as well by threatening to derail the package if it included language that would be unpalatable to their constituents.
Sen. Bob Menendez (D-N.J.) said he would vote against the final reconciliation bill if it included any Republican-sponsored amendments on immigration and some Western Democrats warned they might vote “no” if a drought relief provision sought by Sinema penalized their home states.
Democrats hope for some help in the midterms
The Democratic base has been down in the dumps for months — in part because of a sense that its political leaders were getting little done in Washington.
This feeling was always subjective and partly linked to expectations members of the party set.
In his first year in office, Biden saw Democratic majorities approve a massive coronavirus relief package months into his term, and later a trillion-dollar infrastructure bill that will make major investments in roads and bridges across the country.
But because the Build Back Better agenda was blocked — and because a fair number of Democrats identified that as their real top priority — there was a sense the party had accomplished close to nothing.
That feeling contributed to Biden’s negative polling numbers that were already down because of frustration over inflation and high gas prices.
The expectation for much of 2021 was that Democrats would not get much of Build Back Better done. Instead, they are on the verge of passing a $740 billion chunk of it.
The party hopes it will make the base feel a little more strongly about going to the polls to back Democratic House and Senate candidates in November.
Schumer showed his mettle as a leader
Schumer faced a lot of questions about his ability to lead a razor-thin 50-50 Senate majority when he took over control over the upper chamber in January of last year.
Progressives pressed him from the start to consider tossing out the Senate filibuster to pass big, bold proposals such as election reform despite the slim Democratic majority.
Democratic senators said if they failed to pass legislation to tackle climate change the session would have been something of a disappointment.
Prospects for climate change and tax reform legislation looked bleak after Schumer and Manchin blew up at each other in a July 14 meeting but Manchin came back to the leader a few days later looking to rekindle a deal.
Schumer declared the resulting compromise “one of the most comprehensive and impactful bills Congress has seen in decades.”
Getting Manchin to agree to the most sweeping climate bill ever passed by Congress despite the strong opposition of the West Virginia Coal Association will go down in the books as an impressive example of leadership and deal-making.
Getting Sinema to agree to give Medicare power to negotiate lower drug prices is another impressive accomplishment. Senate Finance Committee Chairman Ron Wyden (D-Ore.) hailed it as a “seismic shift” in power between the government and the pharmaceutical industry.
And Schumer kept Sanders, chair of the Senate Budget Committee, from defecting, despite his loud grumblings that the bill fell far short of what the American public needs to better afford health care, child care and housing.
Democrats voted en masse to defeat several attempts by Sanders to change the bill after Schumer urged them to keep the legislation free of changes. The Vermont senator still stuck with his leader to pass the Inflation Reduction Act Sunday afternoon.
Mychael Schnell contributed.