After months of back and forth, Sen. Joe Manchin (D-WV) has found a version of Build Back Better he likes.
On Wednesday, Manchin put out a statement in support of a new compromise, the Inflation Reduction Act of 2022, which addresses everything from prescription drug costs to corporate taxes to the climate. The new bill, which Democrats released a one-page factsheet for, contains significantly less than what the party previously pushed for in Build Back Better, but is far more expansive than the reconciliation package Manchin signed onto a few weeks ago.
As of earlier this month, Manchin was only on board for a bill that would lower prescription drug costs and extend ACA subsidies. He’d argued that doing anything more would increase inflation and hurt the economy.
Now, Manchin says, he has found a way to decrease inflation (whether that’s correct is unclear) and advance Democrats’ legislative agenda.
What’s in the Inflation Reduction Act of 2022
The latest compromise includes the previously agreed upon health care provisions as well as a 15 percent corporate minimum tax, a proposal to close the carried interest tax loophole, and a provision for IRS enforcement. Additionally, it contains spending for “energy security and climate change” with few specifics about what that entails. Manchin, in his statement, alluded to investments that help the US “decarbonize” and new funding for multiple energy sources including fossil fuels and renewable energy.
All told, Democrats estimate the bill will bring in $739 billion in revenue and will invest $433 billion in spending. It also addresses Manchin’s goal of reducing the deficit and would do so by $300 billion or more.
Manchin made his announcement shortly after the CHIPS+ bill passed the Senate with bipartisan support. Senate Minority Leader Mitch McConnell had threatened to hold that bill hostage if Democrats pursued reconciliation. With CHIPS+ over to the House, Democrats seemingly became free to make progress and put forth this new version of Build Back Better.
For now, the agreement, as has been the case with several of Manchin’s statements during the reconciliation negotiation process, is still extremely vague. Schumer has confirmed, however, that Democrats intend to vote on the bill next week and will do so via the budget reconciliation process, which allows them to pass the legislation with just 51 votes. That would suggest Schumer believes all members of the caucus will be on board by then.
According to Schumer, Democrats are on track to submit this iteration of Build Back Better to the Senate parliamentarian, Elizabeth MacDonough, for review Wednesday evening. She’ll determine whether the policies in the bill have sufficient impacts on taxing and spending to qualify for a vote via budget reconciliation.
This latest deal comes more than a year after Senate Democrats first reached a $3.5 trillion agreement on a reconciliation package. Several false starts later, they now seem ready to bring a much skinnier version of that bill to fruition.