House Dems Send Sweeping Spending Bill to Biden's Desk

·4 min read
REUTERS/Kevin Lamarque
REUTERS/Kevin Lamarque

The most ambitious Democratic legislation since the Affordable Care Act is now officially on its way to President Joe Biden’s desk.

On Friday afternoon, the U.S. House passed a $430 billion bill focused on climate change, health care, and tax reform by a margin of 220 to 207, with all Democrats voting for the bill and all Republicans voting against it.

With the U.S. Senate having approved the bill on a party-line margin on Sunday, Democrats are heading into the August recess—and the heart of the 2022 campaign season—invigorated, having finally notched a legislative win that had escaped them for over a year.

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The bill with the midterm-focused name of the “Inflation Reduction Act” is the culmination of Democrats’ tortured quest to see how much of their agenda they could stuff into a bill without losing a single vote in the Senate and more than a handful of votes in the House.

The legislation heading to the White House now does not, contrary to its name, do much to directly fight inflation. Instead, it addresses three key priorities that are broadly held by Democrats. Most crucially for many in the party, it contains $300 billion in investments to fight climate change with a goal of slashing U.S. greenhouse gas emissions by 40 percent by 2030—the most significant climate reforms ever.

In addition, Democrats will at long last fulfill their campaign promise to lower the cost of prescription drugs. The IRA allows Medicare to directly negotiate lower prices on 100 medications—a change projected to save consumers and taxpayers hundreds of billions of dollars. It also marks a major defeat for the pharmaceutical lobby, which has fought for years against this reform.

The legislation is projected to, on net, reduce the federal deficit by including new tax hikes on corporations. The 15 percent corporate minimum tax, for one, is designed to stop huge corporations like Amazon from collecting tax breaks to soften their federal tax burden.

For Democrats, the legislation represents the missing piece of what they believe could be a compelling midterm case. In the last year, Biden and Democratic majorities in Congress have enacted a $1 trillion bipartisan infrastructure law, a historic high-tech manufacturing bill, and the first significant gun safety reforms in decades, among other things.

Senate Dems Finally Pass Sweeping Spending Bill After Chaotic ‘Vote-a-Rama’

Republicans, however, are ready to use the bill as a cudgel. In particular, they have homed in on its provisions to increase IRS enforcement of tax law, conjuring images of an army of bureaucrats who will be knocking on doors nationwide for invasive audits.

More problematically for Democrats, the GOP is highlighting ambiguity about whether the legislation would break Biden’s repeated promise not to raise taxes on people making under $400,000 per year. Biden may have directly kept his promise when it comes to direct tax rates, but analyses have been mixed around whether taxpayers will feel an additional burden in other ways.

The legislation heading to the White House today is far less sweeping than the plans Democrats pushed last year after winning the presidency and both chambers of Congress. Initially, they outlined a multi-trillion dollar package that would have significantly expanded the U.S. social safety net by instituting paid leave and universal pre-K, along with historic funding for fighting climate change.

But Democrats’ two key centrists—Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ)—objected to a number of aspects of the so-called Build Back Better Act. In December 2021, as Democrats seriously considered a $3 trillion version of the plan, Manchin announced he couldn’t support the bill on principle, killing it.

However, talks over using the fast-track process known as reconciliation to pass something never died in 2022. In July, Manchin and Majority Leader Chuck Schumer (D-NY) announced they’d struck a deal and outlined the package. After some small changes forced by some members—notably, Sinema—the process of passage had barely taken more than a week.

There was never any serious doubt that House Democrats would swallow whatever deal that Manchin and Sinema could agree to. A clutch of lawmakers who had previously threatened to tank the package unless it had tax reforms that benefited upper-class earners in high-tax states reneged on those demands once it became clear Democrats had a shot to pass something.

While many were disappointed with the missed possibilities, Democrats are emphasizing that something is far better than nothing. Already, leaders like Schumer and House Majority Leader Steny Hoyer (D-MD) are outlining areas—like capping the cost of insulin further—where they could make progress through reconciliation if they retain control of Congress next year.

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