The estimated $740 billion package next goes to the House for consideration.
“It’s been a long, tough and winding road, but at last, at last we have arrived,” said Senate Majority Leader Chuck Schumer (D-N.Y.) said. “The Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative measures of the 21st century.”
Senators engaged in a round-the-clock marathon of voting that began on Aug. 6 and stretched into the afternoon of Aug. 7. Democrats voted against some three dozen Republican amendments to the legislation.
The bill ran into trouble midday over objections to a 15 percent corporate minimum tax that was disliked by private equity firms and other industries, forcing last-minute changes.
“It will close tax loopholes and it will reduce and reduce the deficit,” Schumer claimed. “It will help every citizen in this country and make America a much better place.”
Americans for Tax Reform (ATR), a U.S. advocacy group, stated that the measure will increase taxes on thousands of mid-sized small businesses across the United States.
“Any business that has [private equity] in its capital structure is now considered a subsidiary of that firm and thus subject to 15 percent book tax,” John Kartch, a spokesman for ATR, wrote on Twitter.
“As written, the provision now appears restructured to define any company with private equity in its capital structure to be considered a subsidiary of that private equity firm for purposes of the tax,” the group said in a statement. “This means that these companies would now be swept up in the new 15 percent tax on book income. This provision would greatly expand the reach of the book minimum tax to apply to small and midsize companies that require capital investment to grow their business.”
Concerns over objections to the corporate minimum tax on private equity firms and other industries threatened to slow the progress.
Republicans said the measure would undermine an economy that policymakers are struggling to keep from plummeting into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, making it harder for people to cope with the nation’s worst inflation since the 1980s.
“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” Senate Minority Leader Mitch McConnell (R-Ky.) said on the floor.
Spending and tax increases in the legislation would eliminate jobs while having an insignificant impact on inflation and climate change, the Kentucky Republican said.
Starting late on Aug. 6, the Senate began its so-called “vote-a-rama” that comes before the final passage in the Senate’s budget reconciliation process. Democrats used the process to pass the bill along party lines so as to avoid the 60-vote filibuster, and Vice President Harris served as a tiebreaker on several amendments in the 50–50 Senate.
The bill came to the floor about a week after Manchin announced he came to an agreement with Schumer in what is believed to be an attempt to boost Democrats’ and Biden’s chances during the 2022 midterms amid months of negative polling. Biden’s original climate and social measure collapsed after it was opposed by Manchin, who said it was too costly and would fuel inflation.
“The Inflation Reduction Act is the product of years of bipartisan conversations about the most impactful ways to produce more energy domestically, bring down energy and healthcare costs and pay down our debt. The IRA achieves this without raising taxes,” Manchin wrote on Twitter.
Around the same time, the West Virginia Democrat said he would vote down GOP amendments.
“Despite this, my [Republican] friends have made clear they’re completely unwilling to support this bill under any condition. None of their amendments would change that,” Manchin said.
Meanwhile, Sen. Bernie Sanders (I-Vt.) offered amendments to further expand the legislation’s health benefits, and those efforts were defeated. Most votes were forced by Republicans and many were designed to make Democrats look soft on issues such as U.S.–Mexico border security, gasoline and energy costs, and like bullies for wanting to strengthen IRS tax law enforcement.
Late on Aug. 6, Sanders said the measure won’t reduce inflation and said it also doesn’t go far enough with its climate-related measures.
“I want to take a moment to say a few words about the so-called Inflation Reduction Act’ that we are debating this evening,” he said from the Senate floor. “And I say so-called, by the way, because according to the [Congressional Budget Office], and other economic organizations that study this bill, it will, in fact, have a minimal impact on inflation.
“At a time when the drug companies are enjoying huge profits, the pharmaceutical industry will still be allowed to charge the American people by far the highest prices in the world for prescription drugs.”
The Associated Press contributed to this report.