The House passed Democrats’ massive spending package on Friday in a 220-207 vote.
The bill, which received support from every House Democrat, comes nearly one week after Senate Democrats passed the so-called “Inflation Reduction Act” on Sunday in a party-line vote using budget reconciliation, which allows a measure to pass with a simple majority rather than needing to meet a 60-vote threshold.
The bill now heads to President Biden’s desk for final approval.
The legislation is essentially a pared down version of President Biden’s Build Back Better package that was put to rest last year when Senator Joe Manchin (D., W.Va.) pulled his support.
The plan would allocate $369 billion for energy and climate initiatives, while another $64 billion would be used to extend expiring federal subsidies for people buying health insurance for another three years. The bill would impose new taxes to pay for it.
Despite its name, the bill’s impact on inflation is “expected to be statistically indistinguishable from zero,” according to an independent analysis performed by the University of Pennsylvania Wharton School.
Republicans have been outspoken against the legislation.
“It does nothing to bring the economy out of stagnation and recession, but rather, the Inflation Reduction Act of 2022 gives us higher taxes, more spending, higher prices and an army of IRS agents,” said Senator Mike Crapo of Idaho, the top Republican on the Senate Finance Committee.
Schumer chose to quickly advance the measure after reaching an agreement with Senator Kyrsten Sinema (D., Ariz.) earlier this month. Sinema, who had been a holdout and whose vote was needed for Democrats to reach a simple majority, announced that she would support the Democrat-only spending package after party leaders agreed to make tweaks to several new tax proposals.
Sinema said last week that she was willing to support the bill after several changes had been made to its tax provisions, including removing the tax on carried interest. The tax would have impacted hedge-fund managers and private equity and would have raised $14 billion, according to CNN.
Instead, the bill would include a 1 percent excise tax on companies’ stock buybacks, which is expected to raise $73 billion, a Democratic aide told CNN.
“We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said in her statement on Thursday.
The bill passed the Senate after a marathon session which included hours of debate and a “vote-a-rama” in which senators voted on a series of amendments throughout Saturday night and into Sunday afternoon.
The vote-a-rama period was lengthened by last minute negotiations after Sinema expressed support for an amendment proposed by Senator John Thune (R., S.D.) that would have carved out private equity subsidiaries from the 15 percent corporate minimum tax and added a one-year extension of the State and Local Tax (SALT) cap to make up for the lost revenue from the corporate tax change.
Thune’s amendment passed, after which Senate Democrats approved an amendment by Senator Mark Warner (D., Va.) that supersedes the Thune amendment and replaces the SALT cap extension with a two-year loss limitation extension for some businesses.
Senate Republicans eliminated a $35 cap on insulin in the private market place that Democrats had proposed as part of the spending bill. GOP senators noted the cap violated budget rules and Democrats fell three votes short of the 60 needed to keep the provision in the legislation.
The final vote on the insulin cap provision was 57-43 with Senators Bill Cassidy and John Kennedy of Louisiana, Susan Collins of Maine, Josh Hawley of Missouri, Cindy Hyde-Smith of Mississippi, and Lisa Murkowski and Dan Sullivan of Alaska voting with Democrats in favor of the cap.