US Economic Policy | August 10, 2022:
Democrats savor spending bill — and some tell voters they want to do more
As Democrats prepare to cast their final vote on President Biden’s economic agenda, some party lawmakers are steeling themselves for the next fight: trying to persuade voters to let them finish what they started.
The bill that is expected to be approved in the House on Friday clinches only some of Democrats’ long-delayed plans. It aims to combat climate change, lower health-care costs, revise the tax code and reduce the deficit, after party leaders jettisoned earlier, more ambitious spending proposals in pursuit of a deal that could win over moderates in their ranks.
The political trade-offs have informed Democrats’ retooled pitch to voters this week, as they fan out across the country fresh off a successful Senate vote. With control of Congress on the line in November’s midterm elections, party lawmakers have tried to strike a political balance, eagerly touting their early victories while signaling they are committed to making another run at the ideas they had to abandon.
“The fact that we can show we’re actually getting something done, that people care about, that doesn’t take difficult explanation,” Senate Majority Leader Charles E. Schumer (D-N.Y.) said in a recent interview, describing the bill as “one of the most significant pieces of legislation passed in decades.”
But Schumer said their work isn’t finished, especially if Democrats “pick up a few more seats” in the midterm elections. Only months ago, the majority leader had tried to move a more sprawling package that aimed to expand Medicare, invest in affordable housing, improve child care, offer free prekindergarten and provide a host of new benefits to low-income Americans. That push ultimately faltered after Sen. Joe Manchin III (D-W.Va.) raised concerns about its price tag and policy scope, though he and Schumer eventually worked out a compromise.
“If we win, we’re going to have to do a reconciliation bill that will take care of a lot of the things that we couldn’t do,” Schumer said, referring to the legislative process that allows his party to override Republican opposition.
For Democrats, the Inflation Reduction Act amounts to a major political achievement in its own right. The bill delivers the largest-ever single burst of federal spending to tackle global warming — roughly $370 billion — with new programs to cut back on greenhouse gas emissions and boost clean-energy technologies including electric vehicles.
With it, Democrats also delivered new initiatives to cap and cut drug costs for seniors on Medicare and spare about 13 million low- and middle-income Americans from insurance premium spikes next year. Lawmakers paid for their package — while generating new money for deficit reduction — through proposals that target some billion-dollar corporations and tax cheats.
Democrats forged the measure in the Senate, after months of tumultuous negotiations between Schumer and Manchin, the party’s chief moderate holdout. Talks at one point last month appeared on the verge of full collapse, after Manchin grew concerned over Democrats’ proposed spending as inflation threatened the economy.
But the duo continued to toil, largely out of sight of their party’s members, before brokering a surprise summer deal. After another round of tweaks — this time to satisfy Sen. Kyrsten Sinema (D-Ariz.), another key moderate — Democrats shepherded the bill through a marathon overnight debate and adopted it Sunday over unanimous Republican opposition.
The successful outcome has teed up the bill for the House, where lawmakers set in motion a plan to bring it to the floor Friday. A final vote would then send the bill to Biden’s desk, solidifying a package more than a year in the making.
To prevail, Democrats must stay almost completely united — House Speaker Nancy Pelosi (Calif.) has only four votes to spare in the narrowly divided chamber. And they must weather an intensifying barrage of stall tactics and political attacks from Republicans, who have argued that the bill would worsen families’ finances.
“This is going to mean higher taxes for hard-working families and higher costs due to more inflation,” said Rep. Steve Scalise (R-La.), the House minority whip.
In the coming weeks, Scalise said, Republicans would be “rolling out an [economic] agenda that will reverse it,” referring to the Inflation Reduction Act. But for now, he said, GOP lawmakers aim to focus on “letting the country know every dirty, rotten piece of this bill.”
Even before the House debate began, many Democrats in the chamber had started touting the bill’s benefits to voters. For some in the party, the electoral map is a difficult one amid conflicting economic indicators and mixed opinion polling on their majority and Biden’s popularity. But Schumer in recent days has cast the package as a set of “things Americans have longed for and couldn’t get done,” one that offers contrast with Republicans, who voted against it.
In Virginia, for example, Rep. Abigail Spanberger touted a new program that would cap seniors’ yearly drug costs and allow Medicare to negotiate the price of some medicines.
Those provisions wouldn’t take effect for some time, with Medicare negotiation in particular only beginning in 2026. But Spanberger, a member of the moderate Blue Dog Coalition who is running in a competitive race, said passing the bill would help her “look a retiree in the face and say we are capping your out-of-pocket costs,” even if the benefits aren’t immediate.
“I think [it] is understood that is not fast,” she said.
The expected House vote comes about nine months after Manchin’s opposition scuttled the larger, roughly $2 trillion Build Back Better Act that Democrats in the chamber adopted in November. When the bill faltered last year, some lawmakers were flustered and furious, fearing they had squandered a rare opportunity to deliver on their agenda.
But their mood has shifted considerably in recent days, as party leaders implore them to savor their current success — and start to set their sights on the future.
“As I say to the members, you cannot judge a bill for what it does not do,” Pelosi said Tuesday on MSNBC. “You respect it for what it does do. And what this bill does do is remarkable.”
“Do we want more? Of course,” she added. “Will we continue to work for more? Of course.”
Speaking from her home state of Washington, Rep. Pramila Jayapal said she had already started touting some provisions on climate change to local voters, stressing the fact that the spending could reduce emissions by 40 percent below 2005 levels by 2030.
Jayapal had been a major force in crafting the original Build Back Better Act on behalf of the Congressional Progressive Caucus, a powerful bloc of nearly 100 left-leaning lawmakers. The group had pushed Manchin repeatedly to back a bigger bill, at times blasting him for obstructing the will of most of his own party.
But Jayapal said liberals are ready to back the new bill, since it allows Democrats to achieve some of what they hoped — and positions them to try again if they preserve their majorities.
“We made the case to the country about the need for universal child care, universal pre-K, investments in housing, expanding Medicare,” she said. “All we need to do is get a couple more Democrats in the Senate and ideally expand our majority in the House and we can get the other pieces done.”
“We really could pass a reconciliation bill that has all the rest of it within the first few months of getting an expanded Senate majority,” she said. “That’s the pitch we’re making to voters, that I’m making to voters.”
Reflecting on his own work, Sen. Ron Wyden (D-Ore.), the leader of the tax-focused Finance Committee, said his panel had secured the sort of significant policy changes he’s pursued for years. Along with drug pricing, Wyden and his aides cobbled together the proposals to fund the bill, reduce the deficit and help deliver the climate-related spending.
This week, Wyden hit the road to tout the package in Oregon. Appearing at events in Wilsonville and Portland on Tuesday with Energy Secretary Jennifer Granholm, the senator said, he spoke with voters about the “transformational” spending Democrats approved on climate and health care.
But Wyden and Democratic leaders could not achieve everything they had hoped, including a more sweeping overhaul of the U.S. tax code that might have raised rates on wealthy individuals and corporations. The push, which aimed to unwind the tax cuts implemented under President Donald Trump in 2017, faltered along with a slew of other proposals as a result of Sinema’s opposition.
Wyden acknowledged the omission — and other cuts in areas like child care — as a reflection of “how challenging a 50-50 Senate is.” Still, the senator stressed in an interview: “There’s a lot to do; I’m not minimizing it. But when you thread the needle on big issues, it’s something to build on.”
In the face of those changes, one lawmaker — Sen. Bernie Sanders (I-Vt.) — labored to expand the Inflation Reduction Act in the final hours of debate. Targeting prescription drugs, climate change and a long-sought push to expand tax credits for parents with children, Sanders offered a series of amendments that would have restored some of the provisions trimmed to win Manchin’s support.
But Sanders repeatedly failed, stymied by opposition — from Republicans and even Democrats who felt they had to protect their delicate deal at all costs. The series of votes, in which Sanders found himself the lone aye in the chamber, often came after his Democratic peers promised to continue working on the policies they reluctantly cut.
Other key provisions did not survive debate as a result of rulings from the Senate’s parliamentarian, who was tasked with reviewing the legislation to ensure it complied with the rules of budget reconciliation — a process that allowed Democrats to advance their bill over GOP objections this weekend. The casualties included a proposal that would have penalized drug manufacturers that raise prices for patients covered by private insurance faster than the rate of inflation.
The cuts dismayed some Democrats, but many appeared emboldened anyway. Speaking to reporters this weekend, Sen. Elizabeth Warren (Mass.) said they needed “two more Democrats in the United States Senate, and hang on in the House,” and then they could shepherd their agenda through Congress with much less resistance.
“We have elections coming up in November,” she said.