Sunday’s passage by the US Senate of legislation that envisages the most significant federal investment in history to counter climate change and reduce the cost of prescription drugs, is doubtless a watershed development. Democrats banded together to lend impetus to two major pieces of legislation, critical facets of President Biden’s domestic agenda, over unified Republican opposition. The measure, large elements of which appeared irrelevant just weeks ago in the midst of Republican divisions, would inject more than $370 billion into programmes relating to climate and energy. Overall, the bill could allow America to cut greenhouse gas emissions by about 40 per cent below the 2005 levels by the end of the decade. It would also achieve the Democrats’ objective of slashing prescription drug costs. For the first time, the bill will allow Medicare to negotiate prices of medicines directly and cap the amount recipients pay out of pocket for drugs each year at $2000.
The initiative will also extend larger premium subsidies for health coverage for the low and middle-income segments under the Affordable Care Act for three years. It would be paid for by substantial tax increases mostly on large corporations. This will mean a 15 per cent corporate minimum tax and the introduction of a new tax on company stock buybacks. Initially pitched as “Build Back Better”, it generally referred to a multi-trillion dollar “cradle-tograve” social safety net plan. The Democrats scaled back the legislation in recent months and renamed it as the Inflation Reduction Act. It was projected to reduce the federal deficit by as much as $300 billion over a decade. It is open to question though whether it will counter inflation or lower costs for Americans in the long term. Passage of the measure has been a major victory for President Biden and Democrats, who are struggling to maintain their slender House majorities in November’s midterm congressional elections.
Facing unanimous opposition from Republicans, who have used filibusters to block several elements of their domestic agenda, the Democrats took full advantage of the Senate’s special budget rules to force through as much as they could with the support of all 50 members of their caucus. The final tally was 51 to 50, with VicePresident Kamala Harris casting the vote to break the tie. The House planned to interrupt its summer break to reconvene briefly to clear the measure, and then advancing it to President Biden for his signature. The Senate vote was the culmination of more than a year of hard-fought negotiations between the party’s progressive core, which demanded a transformational plan that would touch every aspect of American life, and a conservative-leaning flank that sought a much narrower package. Those talks played out against the backdrop of a 50-50 Senate.