WASHINGTON — After months of tortuous negotiations, Democrats are preparing to push a climate, tax and health care package that would salvage key elements of President Biden’s domestic agenda.
The legislation, while falling far short of the ambitious $2.2 trillion building law passed by the House in November, does achieve several long-standing Democratic goals, including tackling the effects of climate change on a rapidly warming planet, and taking steps to lower the cost of prescriptions. . Drugs are renewing parts of the tax code in an effort to make it more equitable.
Here’s what’s in the final package:
It’s the single largest US investment to slow global warming.
The bill includes the largest spending ever by the federal government to slow global warming and reduce demand for the fossil fuels primarily responsible for causing climate change.
It will invest nearly $400 billion over 10 years in tax credits intended to direct consumers to electric vehicles and urge electric utilities to renewable energy sources such as wind or solar power.
Energy experts said the measure would help the United States cut greenhouse gas emissions by about 40 percent below 2005 levels by the end of this decade. This puts the Biden administration a step closer to achieving its goal of nearly halving emissions by 2030. Scientists said more is needed to help prevent global warming to dangerously high temperatures, but Democrats saw it as a critical first step. Significance after decades of inaction.
Meanwhile, Democrats have approved a number of fossil fuel and exploration provisions as concessions for Senator Joe Manchin III of West Virginia, a stronghold of a conservative state that relies heavily on coal and gas.
This measure will secure new leases for oil exploration in the Gulf of Mexico and Cook Inlet in Alaska. It will expand tax credits for carbon capture technology that can allow coal or gas-fired power plants to continue operating with lower emissions. The Home Office will continue auctioning fossil fuel leases if it plans to approve new wind or solar projects on federal lands.
Tax credits include $30 billion to speed up production of solar panels, wind turbines, batteries and critical mineral processing. $10 billion to build facilities to manufacture things like electric cars and solar panels; and $500 million through the Defense Production Act for Heat Pumps and Critical Minerals Processing.
There is $60 billion to help disadvantaged regions disproportionately affected by climate change, including $27 billion to create what will be the first national “green bank” to help drive investments in clean energy projects — particularly in poor communities. The bill would also force oil and gas companies to pay fees of up to $1,500 per ton to address excess leaks of methane, a potent greenhouse gas, and rescind a 10-year moratorium on offshore wind leases put in place by President Donald J. Trump. .
Medicare can directly negotiate the price of prescription drugs, which lowers costs.
For the first time, it will allow Medicare to negotiate with drugmakers about the price of prescription drugs, a proposal expected to save the federal government billions of dollars. This will apply to 10 drugs initially, starting in 2026, and then expand to more drugs in the following years.
Opponents argue that the plan will stifle innovation and the development of new treatments by slashing the profits drug companies can spend on their businesses, while some liberals have expressed frustration that the policy will be too slow to take hold. If the package becomes law, as expected, it will be the largest expansion of federal health policy since the Affordable Care Act was passed.
The package will cap the annual costs seniors pay for prescription drugs at $2,000, and ensure that seniors get free vaccinations. Lawmakers also added a discount if price increases exceed the rate of inflation. (However, senior Senate officials said the penalty could only apply to Medicare, not private insurers.)
Republicans successfully challenged the inclusion of a $35 insulin price cap for patients under private insurance during a rapid series of voting on the amendments early Sunday morning, forcing them to remove it. But the separate proposal to cap the price of insulin at $35 a month for Medicare patients remained in place.
Extended healthcare support will be extended.
As part of the $1.9 trillion pandemic aid bill that Democrats managed to achieve last year, lawmakers agreed to expand the benefits available under the Affordable Care Act. That proposal lowered premiums for nearly every American dependent on the program’s market, either making some plans free for people on low incomes or offering some subsidies to high-income people who previously received no help.
The package, which can be approved by the Senate on Sunday, will extend those benefits, which are now set to expire at the end of the year, for an additional three years. Democrats fear a backlash in the November midterm elections if they allow subsidies to be removed.
Wealthy businesses will see an increase in taxes, while the IRS will get a funding boost.
The tax proposals were drafted by Senator Kirsten Senema, D-Arizona, who resisted her party’s bid to raise tax rates on the nation’s wealthiest businesses and individuals.
To avoid the rate hike that Ms. Senema opposed, Democrats instead settled on a much more complex change to the tax code: a new 15 percent minimum tax on corporate earnings that reports to shareholders. It would apply to companies that report more than $1 billion in annual income in their financial statements but are also able to use credits, deductions, and other tax transactions to lower effective tax rates.
Ms Sinema has protected a deduction that would benefit manufacturers, a change she successfully claimed before committing on Thursday to move forward with the legislation. She joined six other Democrats and all Republicans in narrowing the corporate tax floor by supporting an amendment in the final hours of Sunday afternoon’s vote on Rama.
Democrats, to make up for the revenue loss imposed by this amendment, extended the limit on tax cuts for business losses that were enacted as part of Trump’s tax cuts in 2017.
It was also forced to rescind a proposal backed by Democrats and Republicans that would have narrowed the tax break used by both the hedge fund and the private equity industries to secure lower tax rates from their entry-level employees. It has committed to pursuing separate legislation outside the budget package, but that will require the support of at least 10 Republicans.
The legislation would also boost the IRS with an investment of about $80 billion, hoping to recover additional tax revenue by cracking down on wealthy corporations and wealthy tax evaders.
Republicans, who have historically opposed fund support for the agency, argued that this would increase scrutiny and scrutiny of low-income families. In turn, the IRS dismissed this concern, telling Congress that “these resources are absolutely not about increasing scrutiny of small businesses or middle-income Americans.”
Jim Tankersley Contribute to the preparation of reports.