Sen. Joe Manchin of West Virginia made a shocking announcement on Wednesday that he had not only struck an agreement with Majority Leader Chuck Schumer on a huge spending plan that was focused on health care but that he had also signed onto elements related to climate change and energy.
It was something of a U-turn for the conservative Democrat, who just two weeks ago backed away from climate measures being included in any spending bill, telling a radio host that inflation was “absolutely killing many, many people” and that he would have to wait until July inflation numbers were out before considering such measures.
This was something of a reversal for the conservative Democrat, who just two weeks ago backed away from climate measures being included in any spending bill.
The Democrats were certain at the time that they would be left with a package that just addressed health care. A few other senators have publicly admitted that they were coming to terms with it.
On Wednesday, it was not obvious why Manchin had decided to go a different path.
Following what was described as “several months of negotiations,” Manchin and Schumer stated in a joint statement that they were “pleased to announce an agreement” today.
The two individuals stated that they had “finalised legislation text” that, if passed, would cut the deficit by approximately $300 billion while also investing $369.75 billion in “energy security and climate change projects” over the following ten years.
“By eliminating tax breaks for corporations and rich individuals, the investments will be fully paid for.
In addition, the expanded programme under the Affordable Care Act will have its funding extended for an additional three years, through the year 2025 “the senators had to say.
With Manchin’s backing, Democratic leaders in the chamber are now working toward passing the bill by the end of the following week through a streamlined procedure known as reconciliation.
This process enables the passage of such legislation with only a simple majority vote (and Vice President Kamala Harris’ vote to break a tie), so they believe they have a good chance of succeeding.
After that, Speaker Nancy Pelosi stated that the House will meet again in August at some point to vote on and approve the proposal.
After speaking with both Manchin and Schumer, Vice President Joe Biden issued a statement on Wednesday evening announcing his support for the deal. Should the deal be approved, it would be a significant victory for Vice President Joe Biden.
Biden had attempted but been unsuccessful in getting his party to unify behind, a sweeping $2 trillion “Build Back Better” economic and social safety net bill.
This bill would have included provisions such as universal pre-K, Medicaid expansion, and paid family leave. However, Manchin had previously baulked at the price tag in the face of rising inflation, which caused the bill to be scuttled.
Since then, there have been numerous proposals that are comparable, albeit scaled down, but they have all failed to garner sufficient support among Democrats. Republicans are opposed to these proposals.
Similarly, Senate Minority Leader Mitch McConnell (R-Kentucky) was quick to tweet his disapproval of the compromise that was reached on Wednesday “Already, Democrats have brought American families to their knees by causing unprecedented levels of inflation.
Now, they want to pour on massive tax increases, which will be a burden for people and will cause the loss of many thousands of jobs in the United States.
First, they destroyed the financial stability of your family. Now they want to eliminate your position as well.”
While Democrats wait for the rule-keeping parliamentarian in the Senate to scrub through the new arrangement to ensure that all elements fulfil the stringent criteria of reconciliation, specifics on what exactly is contained in the package are now unknown.
However, according to Schumer and Manchin’s interpretation of the plan, it “lowers energy costs, increases cleaner output, and cuts carbon emissions by nearly 40 per cent by 2030.”
These are all measures that the Democrats estimate will cost roughly $369 billion to implement.
In addition, Democrats intend to continue the subsidies that were put in place during the pandemic for those Americans with lower incomes who get health insurance through the Affordable Care Act for an additional three years.
They stated that it was essential for Democrats to push through those measures because August is traditionally the month when insurance companies announce hikes to their premiums.
According to Democrats, the pact, which is also known as the Inflation Reduction Act of 2022, brings in far more revenue — 739 billion dollars — than the government would spend if this legislation were enacted.
The provisions related to climate change and the Affordable Care Act will cost the government approximately $433 billion together, and Democrats intend to invest at least $300 billion of that amount toward deficit reduction.
That was at Manchin’s demand, and it was done to bring record inflation down to more manageable levels.
The Democrats have stated that to bring in the necessary funds, they intend to go after large corporations and the “ultra-wealthy” by enacting a corporate minimum tax of 15 per cent and collecting additional funds through increased IRS tax enforcement. Together, these two measures are expected to bring in close to $440 billion.
Sens. Manchin and Schumer insisted in their news release that under their plan, there will be “no new taxes on families making $400,000 or less and no new taxes on small businesses.” This was a key campaign promise made by President Biden.
Republicans have been warning for weeks that those tax hikes would hit small and mid-size businesses disproportionately.
“No matter how many times Senate Democrats change the name of Build Back Broke, it will not make the bill any less harmful to American families and small companies.
Raising taxes on those who create jobs, suffocating energy producers with new restrictions, and strangling innovators who are searching for new treatments won’t make this recession better; in fact, it will only make it worse “Sen. John Cornyn, a Republican from Texas, made this comment in a statement.
The majority of Democrats in the Senate have not yet seen the actual wording of the bill, but several have indicated their support for it.
Chris Coons, a representative from Delaware, stated that he felt “extremely encouraged.”
Brian Schatz, the representative for Hawaii, said, “I am thrilled to say that this will be, by far, the biggest climate action in the history of humankind.”
“This is a true climate measure because it includes about $370 billion in tax incentives, grants, and other types of investments in climate-friendly areas such as clean energy, climate-friendly transportation, energy storage, climate-smart agriculture, and clean manufacturing.
The planet is engulfed in flames. The most important thing right now is bringing down emissions. This is a tremendous step forward. Let’s get it done.”
On Thursday morning at nine o’clock, the entire Democratic caucus in the Senate is scheduled to get together for a meeting to discuss the specifics of the new proposal.
However, the agreement was not well received by all of the members of the caucus.
Bernie Sanders, an independent senator from Vermont who serves as the chairman of the Senate Committee on the Budget, reacted angrily by telling reporters on Wednesday:
“Despite what you might believe, Senator Manchin does not hold the position of majority leader, as far as I am aware. From what I’ve heard most recently, he is not the only person who belongs to the Democratic caucus. I’ll have a look at it, and then we’ll decide what to do next.”
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To successfully close the deal, the Democrats require each of their 50 votes to maintain their solidarity and good health. This will not be an easy task, considering that Manchin himself has been quarantined this week with COVID-19.
