According to recent reports, Senate Majority Leader Chuck Schumer (D–New York) has reached an agreement with Senator Joe Manchin (D–West Virginia) to enact a scaled-back version of President Joe Biden’s spending plan, which will now be presented as an effort to contain inflation.
The Inflation Reduction Act of 2022 was announced by Senator Joe Manchin in a statement released on Wednesday evening.
The bill, according to the senator known as the swing vote, will be built around “paying down our national debt, lowering energy costs, and lowering healthcare costs.”
The proposal was quickly fleshed out thanks to subsequent reporting by Politico and other outlets.
Even though Manchin’s statement is light on specifics about the bill, A linchpin of Biden’s Build Back Better plan through its many, many interactions over the past year, the bill will include $370 billion in new spending on climate change initiatives and green energy projects.
Additionally, the bill would dedicate approximately $300 billion of revenue toward reducing the deficit, which has been Manchin’s top priority.
A three-year extension of the expanded Affordable Care Act (ACA) subsidies was reportedly included in the bill.
These subsidies were initially passed as a temporary measure during the early days of the COVID-19 pandemic.
Additionally, the bill reportedly includes changes to how federal health insurance programmes price prescription drugs.
According to what Peter Suderman of Reason has explained, the extension of the ACA subsidies could potentially make inflation worse, even though they are being marketed as a way to reduce expenses for people.
Several different proposals for tax hikes are going to be used to finance the spending cuts and deficit reduction measures.
According to Politico, the bill would impose a corporate minimum tax of 15 per cent, expand the IRS’ enforcement division (which should be noted as a questionable means of generating revenue), and close a commonly used business tax break for carried interest.
All of these changes would be made to generate revenue.
According to The Washington Post, the proposed tax reforms would result in additional revenue of approximately $739 billion over the following ten years.
In his statement on the bill, Manchin said, “It is past time for the United States to begin paying down our $30 trillion national debt and getting serious about the record inflation that is crushing the wages of American workers.”
Manchin’s statement was in response to the fact that the bill had been introduced. He stated that the provisions of the measure will safeguard “small businesses and working-class Americans while also ensuring that giant corporations and the ultra-wealthy pay their fair share in taxes.” [citation needed]
At first glance, it appears as though Manchin’s opposition to the trillion-dollar price tag of the Build Back Better plan for several months has forced Schumer (and possibly the White House) to accept the West Virginia senator’s point of view.
Manchin is a senator from the state of West Virginia. Back when the Biden administration was still promising that price increases were transitory, Manchin was emphasising the need for deficit reduction as a way to cool inflation.
The intervening months have proven that Manchin was right to resist dumping even more money into an already overheated economy.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonprofit organisation that advocates for lower deficits, said in a statement that a plan to reduce the deficit and ease consumer costs “may be exactly what the doctor ordered” in light of the continued acceleration of inflation.
MacGuineas stated that she was “encouraged” by the framework that was presented on Wednesday night; nevertheless, she was waiting for details on the specifics of the plan before making a decision.
That makes a lot of sense. In earlier iterations of the Build Back Better plan, there was a heavy emphasis placed on gimmicks, some of which concealed as much as fifty per cent of the total cost of the package.
Since Manchin was not coy about the fact that his opposition to Biden’s proposal had a lot to do with those gimmicks, it is probably safe to assume that his support for this new deal is contingent on it being a clean bill.
Manchin was not shy about admitting that his opposition to Biden’s proposal had a lot to do with those gimmicks.
Despite this, it would be about running for the form for Congress to pass a package that was supposed to battle inflation and lower the deficit, but it didn’t do either of those things.
Politically speaking, the revelation of this new framework ushers in the next round of doubts over whether or not it is genuinely feasible to pass.
Manchin might finally get a break after being in the public eye for the past several months due to his opposition to the legislation proposed by his party.
Now, the focus will shift to the members of the Senate who lean to the left the most, such as Senators Bernie Sanders (Independent–Vermont) and Elizabeth Warren (Democrat–Massachusetts), who had previously championed the larger version of the bill that included enormous subsidies for child care and significantly more money for environmental programmes.
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There is also the question of whether Democrats have the intestinal fortitude to raise taxes — even if it isn’t on a broad scale — during a recessionary period, on the brink of a potential recession, and just a few months before a midterm election in which they already seem likely to lose seats.
This is a question that needs to be answered to determine whether or not Democrats have the guts to do so.
