Wed. Aug 10th, 2022

WASHINGTON – In an unexpected twist, Senate Majority Leader Chuck Schumer and Senator Joe Manchin announced Wednesday that they had struck an expansive deal that had eluded them for months on energy and climate issues, health care, higher income taxes and on corporations and federal debt relief.

For months, Manchin’s opposition had blocked a broader deal wanted by President Joe Biden and other Democrats, in part because it said it would fuel rather than fight inflation.

In an abrupt announcement, he and fellow Democrat Schumer said the measure would raise $ 739 billion over 10 years of revenue, the largest part coming from a minimum corporate tax of 15%.

It would spend $ 369 billion on energy and climate initiatives and $ 64 billion to extend expiring federal subsidies for people who buy health insurance. That would leave over $ 300 billion to reduce federal deficits over the decade.

The Senate will consider the large package next week, said Schumer, DN.Y., and Manchin, DW.Va., who had been negotiating for months and seemed stuck on everything but a much smaller measure.

The announcement suddenly presented President Joe Biden and the Democrats with the prospect of pushing a major result through Congress ahead of the November Congressional election in which Republicans seemed strongly positioned to seize control of the House and perhaps even a majority of the Senate.

Significantly, the Democrats called the measure “The Inflation Reduction Act of 2022”. Polls show that inflation, embodied by gasoline prices that surpassed $ 5 per gallon before easing, has been the primary concern of voters. For months, Manchin’s opposition to the proposal for larger packages has been partly based on his concern that it would fuel inflation.

Manchin’s resistance had long ago derailed extensive legislation on the issues of the proposal.

Manchin, one of the most conservative Democrats in Congress, just last week said he would only agree to much more limited legislation that limits the costs of prescription drugs and extends federal subsidies for health care costs.

He said he was willing to consider a broader compromise on environmental and tax issues after Congress returned from a summer recess in September, an offer that many Democrats have deemed dubious.

There was no immediate explanation as to why Manchin had suddenly accepted the much larger package. In December, his resistance derailed a $ 3.5 trillion, 10-year social and environmental bill that was Biden’s top domestic priority.

In his statement, Manchin said the new measure “will devote hundreds of billions of dollars to deficit reduction by adopting a fiscal policy that protects small businesses and the American working class while ensuring that large corporations and the ultra-rich pay their own. fair share of taxes. “

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