While $369 billion of the plan would be allocated to energy and climate initiatives, $64 billion would go to extending expiring federal subsidies for people buying health insurance, the Associated Press reported.
The package will be debated on the Senate floor next week, Senate Majority Leader Chuck Schumer and Manchin confirmed. The pair’s talks had been ongoing for two months but were believed to have stalled before Wednesday’s development. Manchin’s turnaround comes after he reported to Democrat leaders in mid July that he “unequivocally” would refuse to support new spending on climate change or new tax increases for wealthy individuals and corporations, dealing a death blow to their plans by withholding his crucial swing vote in the evenly divided chamber.
Included in the package revealed Wednesday, however, is a 15 percent corporate minimum tax, AP noted, which Schumer and Manchin claimed will curb the skyrocketing size of the federal debt by collecting $739 billion in government revenue over ten years.
The legislation appears to be a significantly shrunken version of President Biden’s original Build Back Better agenda, which included sweeping social spending on climate, child care, health care, and other domestic policy priorities of the administration. Manchin declared and repeatedly reaffirmed his opposition to the gargantuan $3.5 trillion spending bill after the House of Representatives passed it in December, citing worries about inflationary effects, but signaled he might reengage on the matter down the line.
When asked by CNN in February whether he had revisited Build Back Better since December, Manchin said, “No, no, no, no. It’s dead.”
Democrats have coined their new bill, “The Inflation Reduction Act of 2022,” a more palatable framing for Manchin, who had long expressed fears about the inflationary impact of Biden’s larger package. As inflation rages on, clocking in at 9.1 percent for the twelve months ending in June, Americans are struggling to afford household commodities such as food and gas, let alone luxury items or recreation.
Last week, Manchin said he would be amenable to a smaller bill aimed at reducing costs for prescription drugs and extending federal subsidies for health insurance. Wednesday’s deal seems to be a larger package than Manchin said he would be willing to entertain; so some are surprised that he’s on board with it. Manchin also suggested he liked the new bill because hiking taxes for top earners would, in his view, help balance the budget.
The new agreement, Manchin said in a statement, “would dedicate hundreds of billions of dollars to deficit reduction by adopting a tax policy that protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.” ✪