The first procedural vote to proceed to the bill succeeded by a 51-50 tally, with Vice President Kamala Harris breaking the tie.
The bill — named the Inflation Reduction Act — would represent the largest climate investment in US history and make major changes to health policy by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extending expiring health care subsidies for three years. The legislation would impose new taxes to pay for it.
The package is the product of painstaking negotiations and will give Democrats a chance to achieve major policy objectives ahead of the upcoming midterm elections. Senate Democrats are using a special process to pass the package without Republican votes.
Once the legislation has passed in the Senate, it would next need to be approved by the House of Representatives before President Joe Biden could sign it into law.
What happens next
Following the procedural vote to proceed to the bill, there will be up to 20 hours of debate evenly divided between the two parties, though some of that time could be yielded back to speed up the process.
It’s not yet clear how much of the allotted debate time each side will use, but some Republicans are signaling they won’t try to use all of it. And Democrats are expected to yield back some of their time.
When asked if he plans to use a lot of debate time, which could delay final Senate passage of the bill, GOP Sen. Rand Paul of Kentucky said, “Probably not.”
Another Republican senator, Wisconsin’s Ron Johnson, said Saturday that he wouldn’t force the Senate clerks to read the full bill, as any senator could request under the rules. Johnson forced a reading of the American Rescue Plan legislation during the budget process last year, which delayed the vote on the bill.
Following time for debate, there will be a process colloquially referred to on Capitol Hill as a “vote-a-rama” — a marathon series of amendment votes with no time limit that must run its course before a final vote can take place.
Republicans will be able to use the vote-a-rama to put Democrats on the spot and force politically tough votes. The process typically stretches overnight and into the early hours of the next morning.
It’s not yet clear exactly when the vote-a-rama will begin, but it could start as early as Saturday evening. If that happens, a final vote could potentially take place as soon as the early hours of Sunday morning.
Senators widely expect Republicans to try to kill insulin provisions included in Democrats’ climate and health care bill on the Senate floor during the vote-a-rama, which will also force the Senate parliamentarian in real time to rule on whether it’s in order to stay in the bill.
Those provisions would limit insulin prices to $35 in the private insurance market as well as through Medicare. According to a Democratic aide, the parliamentarian ruled that the cap on insulin in the private insurance market was not compliant with reconciliation. Democrats weren’t surprised by her ruling on the private market cap but are hoping the Medicare insulin cap stays in, according to the aide.
But either way, the aide said, Democrats will keep both insulin provisions in the bill as they proceed forward — daring the GOP to move and try to strike them on the Senate floor.
The House is poised to come back to take up the legislation on Friday, August 12, according to House Majority Leader Steny Hoyer’s office.
How Democrats plan to pass the sweeping legislation
Senate Democrats only need a simple majority for final passage of the bill since they are using a process known as reconciliation, which allows them to avoid a Republican filibuster and corresponding 60-vote threshold.
In order to pass a bill through the reconciliation process, however, the package must comply with a strict set of budget rules.
The Senate parliamentarian has to decide whether the provisions in the bill meet the rules to allow Democrats to use the filibuster-proof budget process to pass the legislation along straight party lines.
Schumer announced Saturday that after undergoing the parliamentarian’s review, the bill “remains largely intact.”
“The bill, when passed, will meet all of our goals — fighting climate change, lowering health care costs, closing tax loopholes abused by the wealthy and reducing the deficit,” the New York Democrat said.
In a key ruling, the parliamentarian, Elizabeth MacDonough, allowed a major component of the Democrats’ prescription drug pricing plans to move ahead — giving Medicare the power to negotiate the prices of certain prescription drugs for the first time.
But MacDonough narrowed another provision aimed at lowering drug prices — imposing penalties on drug companies if they increase their prices faster than inflation. Democrats had wanted the measure to apply both to Medicare and the private insurance market. But the parliamentarian ruled the inflation cap could only apply to Medicare, a Democratic aide said.
Meanwhile, MacDonough ruled to keep intact several climate measures from the Environment and Public Works Committee in the reconciliation bill, including a methane fee that would apply to oil and gas producers leaking the potent greenhouse gas methane above a certain threshold.
Earlier Saturday, Senate Finance Chair Ron Wyden of Oregon announced that the clean energy tax portion of the bill “adheres to Senate rules, and important provisions to ensure our clean energy future is built in America have been approved by the parliamentarian.”
How the bill addresses the climate crisis
For a party that failed to pass major climate legislation over 10 years ago, the reconciliation bill represents a major, long-fought victory for Democrats.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history, and the biggest victory for the environmental movement since the landmark Clean Air Act. It also comes at a critical time; this summer has seen punishing heat waves and deadly floods across the country, which scientists say are both linked to a warming planet.
Analysis from Schumer’s office — as well as multiple independent analyses — suggests the measures would reduce US carbon emissions by up to 40% by 2030. Strong climate regulations from the Biden administration and action from states would be needed to get to Biden’s goal of cutting emissions 50% by 2030.
The bill also contains many tax incentives meant to bring down the cost of electricity with more renewables, and spur more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is also just the start of what’s needed to combat the climate crisis.
“This isn’t about the laws of politics, this is about the laws of physics,” Democratic Sen. Brian Schatz of Hawaii told CNN. “We all knew coming into this effort that we had to do what the science tells us what we need to do.”
Key health care and tax policy in the bill
The bill would empower Medicare to negotiate prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary would negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number would rise to 20 drugs a year for 2029 and beyond.
This controversial provision is far more limited than the one House Democratic leaders have backed in the past. But it would open the door to fulfilling a longstanding party goal of allowing Medicare to use its heft to lower drug costs.
Democrats are also planning to extend the enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they wouldn’t expire just after the 2024 presidential election.
To boost revenue, the bill would impose a 15% minimum tax on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits over $1 billion.
Concerned about how this provision would affect certain businesses, particularly manufacturers, Sinema has suggested that she won changes to the Democrats’ plan to pare back how companies can deduct depreciated assets from their taxes. The details remain unclear.
However, Sinema nixed her party’s effort to tighten the carried interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a 20% long-term capital gains tax rate instead of income tax rates of up to 37%.
The provision would have lengthened the amount of time investment managers’ profit interest must be held from three years to five years to take advantage of the lower tax rate. Addressing this loophole, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.
In its place, a 1% excise tax on companies’ stock buybacks was added, raising another $74 billion, according to a Democratic aide.
This story has been updated with additional developments.