The House is on track Friday to send President Joe Biden a roughly $437 billion tax, climate and drug price package for his signature, a hard-fought victory that follows a year of Democratic infighting and gives the party an achievement to campaign on ahead of November’s midterm elections.
House Democrats say they are confident they can pass the Inflation Reduction Act, though they can afford only four defections on a bill Republicans are united against. The bill passed the Senate on a 51 to 50 vote on Sunday with Vice President Kamala Harris breaking the tie in the evenly divided chamber.
Lawmakers are interrupting their August recess to return to Washington to pass the bill, although many House members are expected to take advantage of a Covid-era change in rules and vote by proxy.
The spending in the bill is far smaller than the $10 trillion measure progressives like New York’s Alexandria Ocasio-Cortez initially pushed. It also doesn’t raise the $10,000 limit on the deduction for state and local tax, or SALT, which moderates from high-tax states demanded.
Nonetheless, Democrats have become increasingly resolved that any deal was better than no deal. Leaders of the SALT caucus such as New Jersey’s Josh Gottheimer announced they will vote for the bill while the Congressional Progressive Caucus endorsed it.
Democrats will try to get unanimous support from their caucus. Only one member, Maine Representative Jared Golden, voted against the larger House version of the bill in November. His office did not respond to requests for comment on the bill.
Whether the bill helps Democrats retain their House majority remains to be seen. The party hopes the base is mobilized by the largest climate change bill in US history while seniors cheer the coming of lower drug costs.
“I’ve been prepared to win the midterms all along. It depends on getting out the vote. This probably could be helpful. I don’t know,” House Speaker Nancy Pelosi said this week. “But I do know it will be helpful to America’s working families and that’s our purpose.”
Independent studies project the bill would have a limited impact on inflation despite the name Democrats gave it. The Penn Wharton Budget Model deemed an earlier version of the bill to have a tiny inflation increase in the first two years with an equally small decrease in later years. For middle-class Obamacare enrollees and seniors with expensive prescription drugs the effect will be most immediate.
Republicans argue that imposing new taxes on business could worsen a looming recession likely to be provoked by the Federal Reserve raising interest rates to fight inflation. GOP lawmakers, who blame historic inflation on last year’s stimulus bill, argue the bill’s tax credits for pricey electric vehicles are a giveaway to the upper-middle class while the drug provision stifles innovation in the pharmaceutical industry.