- Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., announced that they have struck a deal on legislation that aims to reform the tax code, fight climate change and cut health-care costs.
- The reconciliation bill would invest more than $400 billion over 10 years, to be fully paid for by closing tax loopholes on the richest Americans and corporations, the senators said.
- It would reduce deficits by $300 billion over that decade, the senators said, citing estimates from nonpartisan congressional tax and budget offices.
Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., on Wednesday announced that they have struck a long-awaited deal on legislation that aims to reform the tax code, fight climate change and cut health-care costs.
The reconciliation bill would invest more than $400 billion over 10 years, to be fully paid for by closing tax loopholes on the richest Americans and corporations, the senators said in a joint statement. It would reduce deficits by $300 billion over that decade, the senators said, citing estimates from nonpartisan congressional tax and budget offices.
The package would raise an estimated $739 billion, including:
- $313 billion through a 15% corporate minimum tax
- $288 billion through prescription drug pricing reforms, including measures to allow Medicare to negotiate drug prices and cap out-of-pocket costs to $2,000
- $124 billion through the IRS enforcement of a reformed tax code
- $14 billion through closing the carried interest loophole
The bill would also invest a total of $433 billion:
- $369 billion from a suite of energy and climate-related programs
- $64 billion from extending an expanded Affordable Care Act program for three years, through 2025
The full Senate will consider the bill next week, Schumer and Manchin said. They hope that the legislation will meet the Senate Parliamentarian's budget reconciliation rules, allowing Democrats to pass it without needing GOP votes.
The Democrats' razor-thin majority in the Senate includes Sen. Bernie Sanders, I-Vt., who caucuses with the Democrats, and Vice President Kamala Harris' ability to cast the tie-breaking vote. With a single defection, Democrats' hopes to pass any legislation strictly along party lines fall apart.
Manchin has flexed that power before: In December, he announced he would refuse to back President Joe Biden's sweeping $1.75 trillion plan to fund a range of social and climate issues. The White House at the time accused him of breaking his promises to the Biden administration.
Biden, who made a similar but more sweeping proposal the centerpiece of his first-term domestic agenda, lauded the senators' agreement Wednesday.
"This is the action the American people have been waiting for," said in a statement of support.
"This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future," the president said.
Schumer and Manchin billed the package as a way to fight runaway inflation while addressing other Democratic agenda items, including cutting down on carbon emissions by 40% by 2030.
The package was revealed hours after the Senate passed a bipartisan bill aimed at boosting U.S. competitiveness with China by subsidizing the domestic production of semiconductors.
Senate Minority Leader Mitch McConnell, R-Ky., had previously warned that Republicans would not back that China competition bill if Democrats continued to pursue unrelated reconciliation legislation.
Spokesmen for McConnell did not immediately respond to CNBC's request for comment.
The provisions of the deal came as a surprise to many after Manchin, just weeks earlier, signaled reluctance to quickly pass the Biden administration's climate agenda due to his concerns about inflation. Manchin's stance infuriated some of his colleagues who have vented frustration about the conservative Democrat's outsize power in the Senate, which is split 50-50 with Republicans.
Schumer had said earlier this month that Democrats would instead work toward a slimmer bill that addressed drug pricing and health care funding.
This is breaking news. Please check back for updates.