House passes Democrats' climate and health care bill, sending it to Biden's desk

Washington — Democrats in the House on Friday pushed their more than $700 billion domestic policy package across the finish line, sending to President Biden for his signature their long-negotiated plan to address drug costs, raise taxes on large corporations and combat global warming. 

Passage of the proposal, now by both chambers of Congress, marks the end of a long-fought effort by Democrats to approve legislation that addresses Mr. Biden's top domestic and great economic priorities. While the package is the result of a compromise that yielded a measure more narrow than the initial sprawling social spending plan put forth by the president last year, its approval gives Democrats a crucial legislative win ahead of the November midterm elections.

Called the Inflation Reduction Act, the bill passed the House in a 220 to 207 party-line vote, days after it cleared the Senate in 51 to 50. Vice President Kamala Harris cast the tie-breaking vote in the evenly-divided Senate, where Democrats used a legislative process called budget reconciliation to pass the bill without needing Republican support.

The White House said Friday that Mr. Biden will sign it sometime next week. He is currently on vacation in South Carolina.

"It's a kitchen table issue," House Speaker Nancy Pelosi said of the legislation in a Friday morning news conference. "If you are sitting at your kitchen table and wonder how you're going to pay the bills. Your health care bills, your prescription drug bills, this bill's for you."

While the House is on its weeklong summer recess, which stretches to mid-September, lawmakers were summoned back to Washington on Friday to vote on the plan. Many members filed letters with the House clerk to vote-by-proxy, a process that allows them to designate another member present for the proceedings to cast a vote for them. 

Its passage by the House caps a string of summer achievements for the president and his party, including passage of a bipartisan gun reform and mental health bill, bipartisan legislation to spur U.S. manufacturing of semiconductor computer chips, a bipartisan plan to expand health care benefits for veterans who developed illnesses because of their exposure to toxic substances from burn pits, and the killing of al Qaeda leader Ayman al-Zawahiri in a drone strike.

While the spending plan approved by Congress does not include Democrats' priorities such as paid family leave and universal pre-K, it makes the largest investment by the federal government in fighting climate change — $369 billion for clean energy and climate initiatives. The package also allows Medicare to negotiate prescription drug prices, extends enhanced health care subsidies under the Affordable Care Act through 2025 and imposes an annual cap of $2,000 on out-of-pocket drug costs and a monthly cap of $35 on insulin for Medicare enrollees.

The tax revenue component of the legislation includes a 15% corporate minimum tax for corporations that make more than $1 billion each year, and stricter tax enforcement and compliance by the Internal Revenue Service, which the Congressional Budget Office estimates will bring in an additional $204 billion in revenue over a decade.

Democrats' legislative package will reduce federal budget deficits by $102 billion over 10 years, according to the budget office, though the estimate did not factor in new revenue from harsher tax enforcement.

The $740 billion bill falls far short of the sweeping, $3.5 trillion social spending plan, dubbed Build Back Better, that Mr. Biden proposed to Congress last year. The wide-ranging plan quickly ran into headwinds in the Senate, where Sen. Joe Manchin, a moderate Democrat from West Virginia, raised concerns about new federal spending driving inflation.

The White House engaged in months of negotiations with Manchin throughout 2021, though talks collapsed in December. 

But Senate Majority Leader Chuck Schumer forged ahead with efforts to reach a compromise on the proposal, and after negotiations derailed and again resurrected, brokered a surprise deal with Manchin late last month.

The legislation also garnered support from Sen. Kyrsten Sinema, a moderate Democrat from Arizona who is another crucial vote, though she had Democrats remove a provision raising taxes on "carried interest," or profits that go to executives of private equity firms. She and other western senators also pushed for $4 billion for drought relief.

The bill underwent more changes by the Senate after it was reviewed by parliamentarian Elizabeth MacDonough to ensure compliance with the reconciliation rules, who said a piece of Democrats' drug-pricing plan that imposed penalties on drug manufacturers that raised prices beyond inflation on private insurers had to be removed. Her green-light of the rest of the legislation, though, cleared the way for the upper chamber to take it up. 

Democrats said the bill will maintain Mr. Biden's campaign-trail promise not to raise taxes on Americans earning less than $400,000 per year and have argued it will help address rising consumer prices. But Republicans argued the plan will instead fuel inflation and harm job creation with its taxes on large companies, while its drug-pricing provisions will cause pharmaceutical companies to cut back on research and development.

"Senate Democrats are misreading the American people's outrage as a mandate for yet another reckless taxing and spending spree," Senate Minority Leader Mitch McConnell said last week. "Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time."