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In turnabout, Sen. Joe Manchin, Senate Leader Schumer reach deal on energy, drug prices, taxes

  • July 28, 2022

President Joe Biden’s stalled domestic agenda. It was an unexpected turnabout after negotiations hit a setback earlier this month.  

Manchin’s support was key given his steady opposition to large government spending bills and any energy proposals that would dramatically cut back on the fossil fuel industry crucial to his state’s economy.

Chief among its components is allowing Medicare to negotiate prescription drug prices – long opposed by the pharmaceutical industry – and investing in clean energy transmission that would help Biden’s goal of significant cabin emissions reduction over the decade.

Biden promises ‘strong executive action’ on climate change after Sen. Manchin dooms domestic agenda

More:Sen. Joe Manchin cools on spending negotiations, citing fears of an ‘inflation fire’

“This bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” Manchin said in a statement.

The Inflation Reduction Act of 2022 would:

  • Invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030.
  • Allow Medicare to negotiate for prescription drug prices.
  • Extend the expanded Affordable Care Act program through 2025.
  • Cut the federal deficit by approximately $300 billion over the next ten years.
  • Reform environmental permitting to speed up domestic energy production and transmission projects.

The senators project the proposal will raise $739 billion in revenue over 10 years, with nearly half coming from a 15% corporate minimum tax. The measure is meant to close a loophole that has allowed large companies from avoiding paying income tax.

An additional $124 billion in revenue would be generated by ramping up enforcement by the Internal Revenue Service.

In a joint statement, Manchin and Schumer called the deal a “historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing and reduce carbon emissions.”

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It’s unlikely to receive much – if any – GOP support so Schumer said Democrats (who only control 50 seats) will try to pass the measure through a Senate rule that bypasses a potential 60-vote filibuster and only requires a simple majority to pass.

Biden took a backseat during talks, letting Schumer take the lead after the president’s negotiations for a trimmed-down $2.2 trillion Build Back Better bill was thwarted because of Manchin’s opposition last year.

The deal was announced only hours after the Senate approved a bipartisan bill designed to boost the computer chips industry and high-tech research in the U.S.

Senate Minority Leader Mitch McConnell, R-Ky., had vowed to block the CHIPs bill if Democrats tried to ram through a separate tax and spending package.

Oklahoma GOP Rep. Kevin Hern urged his fellow Republicans to block the CHIPs bill “in light of this deal.”

“Whether Republican Members support CHIPS or not (I don’t), we must ALL vote no. Passing CHIPS will pave the way for the radical Build Back Broke plan,” he tweeted minutes after the Schumer-Manchin agreement was announced. “The time to fight is now.”

Advocates praised the deal even as many of its detail were still not released.

“This is the best development on health care for the American people in years,” said Sara Lonardo, spokesperson for the progressive group Families USA. “It promises lower drug costs and wider health care access.”

American Clean Power CEO Heather Zichal was equally effusive.

“The entire clean energy industry just breathed an enormous sigh of relief,” she said in a statement. “This is an 11th hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy.”

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