• Mon. May 20th, 2024

US Senate passes Biden’s flagship economic package


Aug 7, 2022
US Senate passes Biden’s flagship economic package


The US Senate has passed president Joe Biden’s flagship economic package after a marathon overnight voting session that handed the president a major political victory just months before the midterm elections.

The climate, tax and healthcare bill, known as the Inflation Reduction Act, passed by 51 votes to 50, with voting split along party lines and vice-president Kamala Harris casting the deciding vote in an evenly divided Senate.

The bill still needs to pass the House of Representatives and be signed by the president before it becomes law, but its passage through the Senate marks the biggest in a string of recent wins for Biden as he aims to defend slim majorities in both chambers in November.

Earlier in the summer, lawmakers voted through bills providing new subsidies for US chip manufacturing and agreed on bipartisan gun control legislation following deadly shootings in Texas and New York.

The Inflation Reduction Act includes some of the most significant climate legislation enacted in the US, with $369bn dedicated to climate and clean energy programmes. It also includes new measures allowing the government to negotiate to lower prescription drug prices, a provision to apply a minimum 15 per cent tax on large corporations, and a new 1 per cent tax on share buybacks.

However, Kyrsten Sinema, the centrist Senator from Arizona, and six other Democrats joined with Republicans to vote through a last-minute amendment that would create a carve-out for private equity from the proposed minimum corporate tax.

Business groups and Republicans have fiercely opposed the imposition of the 15 per cent minimum tax, arguing that it would suppress business investment and harm US exporters.

Although most Republican efforts to amend the bill over the long legislative session failed, GOP lawmakers on Sunday morning successfully stripped a price cap of $35 for insulin from the package. The cap will still apply for Medicare patients.

The passage of the final bill follows weeks of dramatic intraparty negotiations among Democrats, including a surprising reversal by West Virginia senator Joe Manchin.

Manchin had refused to back previous versions of the package on the grounds that it would fuel inflation, nixing the Democrats’ chances of passing the bill in a narrowly divided chamber.

However, Manchin and Senate Democratic leader Chuck Schumer negotiated an agreed bill late last month, before last week winning Sinema’s support.

She gave her backing to the bill after Democrats agreed to remove a provision altering the preferential treatment of private equity and hedge fund profits known as “carried interest”.


Image and article originally from www.ft.com. Read the original article here.