US Senate passes Biden’s flagship economic package

The US Senate passed Joe Biden’s flagship economic package after a marathon voting session that handed the president a major political victory just months before the midterm elections.

The climate, tax and health care bill, known as the Curbing Inflation Act, passed 51 to 50, with the vote split by party and vice versa. President Kamala Harris casting a deciding vote in an equally divided Senate.

The bill still needs to pass the House of Representatives and be signed by the president before becoming law, but its passage by the Senate marks the most significant in a string of recent victories for Biden as he aims to defend narrow majorities in both chambers in November. .

Earlier this summer, lawmakers passed bills providing for new subsidies for American chip manufacturing and agreed to bipartisan gun control legislation in the wake of deadly shootings in Texas and At New York.

The Cut Inflation Act includes some of the most significant climate legislation enacted in the United States, with $369 billion dedicated to climate and clean energy programs. It also includes new measures allowing the government to negotiate lower prices for prescription drugs, a provision for the imposition of a minimum tax of 15% on large corporations and a new 1% tax on buybacks. shares.

However, Kyrsten Sinema, the centrist senator from Arizona, and six other Democrats joined Republicans in passing a last-minute amendment that would create an exclusion for private equity from the proposed minimum corporate tax.

Business groups and Republicans have fiercely opposed imposing the minimum 15% tax, arguing it would suppress investment and hurt US exporters.

Although most Republican efforts to amend the bill during the long legislative session failed, GOP lawmakers succeeded Sunday morning in removing a $35 price cap for insulin from the package. The cap will still apply to Medicare patients.

In a statement, Biden said the bill would “get the government back to working for working families” by reducing the cost of prescription drugs, health insurance and daily energy costs while reducing the deficit. .

“It took a lot of compromises,” Biden said. “Doing important things almost always does.”

Chuck Schumer, the Senate’s top Democrat, hailed the bill as “one of the defining legislative feats of the 21st century.”

“Our bill cuts inflation, cuts costs, creates millions of well-paying jobs and is the boldest climate package in US history,” Schumer said, speaking in the Senate. “This bill will kick off the era of affordable clean energy in America. It’s a game changer. It’s a watershed moment. And it’s been a long time coming.

Climate advocates hailed the passage of the landmark bill. “The Senate just made climate history,” said Manish Bapna, chief executive of the National Resources Defense Council. “This is the single most important step the United States has ever taken to address climate change.”

“This bill isn’t perfect, but from a climate pollution perspective, the positives far outweigh the negatives – by a factor of 10,” Bapna said.

A separate analysis by Rhodium Group, a clean energy consultancy, estimated that the IRA could put the US on track to reduce emissions by 31-44% below 2005 levels by 2030. , compared to a reduction of 24 to 35% without the legislation.

Nancy Pelosi, the Democratic Speaker of the House of Representatives, said her chamber would “act quickly” to send the bill to the president’s office.

The Senate’s passage of the final bill follows weeks of dramatic intraparty negotiations among Democrats, including a surprising upset of West Virginia Sen. Joe Manchin.

Manchin had refused to back previous versions of the package on the grounds that it would fuel inflation, nullifying Democrats’ chances of pushing the bill through a tightly divided House.

However, Manchin and Senate Democratic Leader Chuck Schumer brokered an agreed-upon bill late last month, before winning Sinema’s support last week.

She gave her backing to the bill after Democrats agreed to remove a provision changing the preferential treatment of private equity and hedge fund profits known as “scope.”

Main climate measures in the bill

  • Methane penalty: $900 per metric ton of methane emissions that exceed federal limits in 2024, increasing to $1,500 per metric ton in 2026

  • Carbon capture and storage tax credit of $85 per metric ton, down from $50 previously

  • $30 billion for solar panels, wind turbines, batteries, geothermal power plants and advanced nuclear reactors, including tax credits over 10 years. Replaces short-term wind and solar loans

  • $27 billion for a “green bank” to support clean energy projects, especially in disadvantaged communities.

  • $20 billion to reduce emissions from the agricultural sector

  • $9 billion in rebates for Americans who buy and renovate homes with electrical and energy-efficient appliances.

  • $60 billion to support low-income communities and communities of color, including grants for zero-emission technology and vehicles, highway pollution mitigation, bus depots and other located infrastructure close to disadvantaged communities

  • $10 billion in investment tax credits to build manufacturing facilities for electric vehicles and renewable energy technologies

  • Tax credit of up to $7,500 for the purchase of clean new vehicles and offers for the first time a credit of $4,000 for used electric vehicles for households with a maximum income of $150,000 per year

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US Senate passes Biden’s flagship economic package

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