The Dems appear to be headed for climate and health ups and downs

WASHINGTON– It took more than a year and experienced many ups and downs. Now, a Democratic economic package focused on climate and health care faces hurdles but appears headed for the party line to be passed by Congress next month.

Approval would allow President Joe Biden and his party to claim a triumph at the top priorities as November’s election draws closer. They haven’t forgotten that last year they almost passed a much grander version of the bill, only to see Sen. Joe Manchin, DW.Va., one of their most conservative and contrarian members, torpedo it at the eleventh hour.

This time, to everyone’s surprise, Senate Majority Leader Chuck Schumer, DN.Y., struck a compromise deal with Manchin, turning the West Virginian from pariah to partner. The measure is more modest than previous versions but still ticks boxes on issues that make Democrats dizzy.

Here’s what they face:

WHAT IS INSIDE?

The measure would generate $739 billion in revenue and spend $433 billion over 10 years. More than $300 billion would be left to cut government deficits.

Those are sensible cuts in red ink. But they are tiny compared to the $16 trillion in new debt that the independent Congressional Budget Office will accumulate over the next decade.

The package would save consumers and the government money by driving down prescription drug prices, and it would subsidize private health insurance for millions of people. It would bolster the IRS budget to allow the tax agency to collect more unpaid taxes.

The plan would promote clean energy and offshore energy drilling, a balance called for by Manchin, a fossil fuel advocate. It would also impose new taxes on the largest corporations and wealthy hedge fund owners.

It’s a fraction of the $3.5 trillion package Biden proposed early in his presidency, which also included sums for initiatives like paid family leave and universal preschool. It’s also smaller than the roughly $2 trillion alternative that the House of Representatives passed last November after Manchin called for cuts and scuttled the deal anyway, citing inflation fears.

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IT’S NOW THE INFLATION REDUCTION ACT, BUT…

… will it do that? It certainly could, but there are dissenters.

First some context.

According to an inflation measure closely scrutinized by the Federal Reserve, prices rose 6.8% year over year in June, the biggest rise in four decades. This was followed by government figures showing that the economy had contracted again in the last quarter, fueling fears of a recession.

“Improved tax collection, drug savings and deficit reduction would put pressure on inflation,” the Federal Budget Committee said on Friday. In an enthusiastic review, the bipartisan fiscal watch group called the legislation “exactly the kind of package lawmakers should put together to help the economy in many ways.”

“Deficit reduction is almost always inflation-reducing,” Jason Furman, an economics professor at Harvard University and a top economic adviser to President Barack Obama, wrote in the Wall Street Journal on Friday. He said the measure would also “reduce inflation by slowing growth in prescription drug prices.”

A more sobering assessment came from the University of Pennsylvania’s Penn Wharton Budget Model, which analyzes economic issues.

“The law would increase inflation very slightly until 2024 and then decrease it thereafter,” the group wrote on Friday. “These point estimates are statistically indistinguishable from zero, indicating low confidence that the legislation will have any impact on inflation.”

A chorus of Republicans say the Democrats’ bill would be largely damaging. Senate Minority Leader Mitch McConnell, R-Ky., calls it “a huge package of huge new job-killing tax increases, the Green New Deal madness that will destroy American energy, and prescription-drug socialism that will give us fewer new ones.” will provide life-saving medicines.”

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CHANGES AHEAD

The 725-page dimension will probably change a bit.

Schumer said last week that Democrats planned to add language aimed at driving down patients’ costs for insulin, the diabetes drug that can cost hundreds of dollars a month.

The insulin price cut was a culmination of Democrats’ larger package last year, including a $35 monthly cap for patients receiving the drug through Medicare or private insurers. But that fell out this year when the measure was slashed.

Sens. Jeanne Shaheen, DN.H., and Susan Collins, R-Maine, have presented a bill capping the price of insulin. The prospects of that measure dimmed after the bipartisan Congressional Budget Office estimated it would cost about $23 billion and actually increase the price of insulin. The two legislatures also didn’t produce the 10 Republicans needed to succeed in the 50-50 Senate, where most bills require 60 votes.

It’s unclear what the Democrats’ new insulin language would do. Previous wording that required private insurers to set a monthly insulin cap of $35 could violate the board’s rules, which only allow provisions that primarily affect the federal budget.

Additionally, as part of the process Democrats are using to get the measure through the chamber by a simple majority, with Vice President Kamala Harris’ tied vote, it would face multiple amendments in a voting session that can last all night, and it there is no telling if some will happen.

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PERSPECTIVES

Every Republican seems willing to vote no.

Democrats will need all 50 of their own votes in the Senate, where the unpredictable Sen. Kyrsten Sinema, D-Ariz., has yet to voice her opinion.

The Democrats can’t lose more than four votes in the House of Representatives to be successful there. Spokeswoman Nancy Pelosi, D-Calif., said Friday if the Senate approves the package, “we will pass it.”

Schumer wants the Senate to pass it next week. He acknowledged that the timeline “will be difficult” as it will take the chamber’s lawmaker some time to ensure the bill conforms to Senate rules.

You also need luck for that. All 50 Democrats, including the two independents who support them, must be healthy enough to show up and vote.

This is not guaranteed. The latest, extremely contagious variant of COVID-19 is spreading across the country. And the chamber has 33 senators age 70 or older, including 19 Democrats.

Sen. Richard Durbin, D-Ill., 77, was the last senator to announce he had contracted the disease. Sen. Patrick Leahy, D-Vt., 82, is out after hip surgery. Both are expected again next week.

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