The Archive

THE TOP

Happy Monday morning.

The Senate passed the $700 billion-plus Inflation Reduction Act on Sunday afternoon, with Vice President Kamala Harris breaking the tie. It was the 26th time Harris has done so since becoming VP. That’s the most in nearly 200 years (31 by John Calhoun) thanks to the unprecedented 50-50 split in the Senate this Congress.

Despite this historic divide – or maybe, in fact, because of it – Senate Democrats have put together an impressive resume this summer, most especially during the last two months. The CHIPS Plus Act, PACT Act, Sweden and Finland’s accession to NATO, gun control and reconciliation were all passed in this period, a number of them with big bipartisan majorities. All in a 50-50 Senate.

President Joe Biden – just released from Covid-19 quarantine – will sign the CHIPS and PACT bills into law at events on Tuesday and Wednesday, the White House announced.

Senate Majority Leader Chuck Schumer spoke about his summer following Sunday’s vote, which capped off a nearly 16-hour vote-a-rama on the floor:

We’ll give it to him on this. It wasn’t easy. Yet this has been a period in the Senate without much recent precedent. In fact, we’ve seen larger majorities struggle with far more modest agendas.

This legislative program has been driven in large part by Capitol Hill, not the White House. Yes, Biden and other top administration officials played critical roles at key moments, both in public and behind the scenes. The list includes Commerce Secretary Gina Raimondo, Veterans Affairs Secretary Denis McDonough, Secretary of State Antony Blinken, NEC Director Brian Deese and White House counselor Steve Ricchetti, among others.

But much of the momentum came from Schumer and different groups of senators with diverse political priorities, including Republicans in several cases. Minority Leader Mitch McConnell and Sen. Jim Risch (Idaho), ranking Republican on the Senate Foreign Relations Committee, joined the panel’s chair, Sen. Robert Menendez (D-N.J.), in pushing hard for the NATO vote before the August recess. Sens. Jon Tester (D-Mont.) and Jerry Moran (R-Kan.), the chair and ranking Republican on the Veterans Affairs Committee, were very vocal in supporting the PACT Act – and got a big assist from Jon Stewart and veterans groups. Without Sen. John Cornyn’s (R-Texas) involvement, neither CHIPS Plus nor gun control could’ve passed.

Schumer deserves a lot of credit here too. He was able to cut a deal with Manchin on reconciliation – and keep it secret – after it looked like the West Virginia Democrat had shut down all but a much narrower bill. Schumer then made another deal with Sen. Kyrsten Sinema (D-Ariz.), who had concerns about the “carried interest” and accelerated depreciation provisions in the tax portion of reconciliation. This smoothed the way toward final passage on Sunday. After unveiling his agreement with Manchin, Schumer also was able to push through the $280 billion PACT Act, despite Republicans trying to block it. This was a gamble for Schumer, and it paid off.

The big question for Democrats is whether any of this legislation will help them in November. It’s true that many of the priorities in the reconciliation bill have shown to be popular in the polls. Here’s Schumer’s take:

To review, this bill includes: Allowing Medicare to negotiate on prescription drugs, including a $2000 limit on out-of-pocket costsl capping insulin at $35 per month for Medicare enrollees; setting a corporate minimum tax rate of 15%; a 1% excise tax on stock buybacks; more than $370 billion to fight climate change while also opening millions of acres in federal property to oil and gas drilling; a three-year extension of Obamacare premium subsidies. All while cutting the deficit by several hundred billion dollars.

Republicans succeeded in knocking out a $35 cap on insulin for private insurance plans. But Democrats were able to protect the cap for Medicare recipients – a big victory.

Vulnerable 2022 Senate Democrats have racked up some wins this summer as well. The Medicare prescription drug provision is something all Democrats have wanted to implement for years. Sen. Raphael Warnock (D-Ga.) is one of the leaders on the insulin price cap, which will impact millions of Medicare enrollees. Sen. Mark Kelly (D-Ariz.) played a key role in helping pass the CHIPS Act; Arizona’s semiconductor industry has seen billions of dollars in new investments in recent years. Kelly joined with Sens. Catherine Cortez Masto (D-Nev.) and Michael Bennet (D-Colo.) – both facing GOP challengers in November – announcing $4 billion in new drought funding will be included in the reconciliation package. Sinema helped make this happen.

There are also risks. Nothing in any of these bills will reduce inflation or boost the economy before Election Day. The latest inflation data for July will be released early Wednesday morning, days before the House votes on the reconciliation package. If it’s as bad as June’s numbers, that suddenly may turn into a tougher vote.

Republicans also have hammered vulnerable Senate Democrats for raising taxes as a recession looms. Industry groups including PhRMA, the Business Roundtable and the National Association of Manufacturers are slamming the bill, with drug makers pumping millions of dollars into ads designed to derail the legislation.

During the marathon vote-a-rama – the fourth this Congress – GOP senators offered amendments on a range of tough issues for vulnerable Democrats, including securing the U.S.-Mexico border, boosting police funding and slashing the billions of dollars in new IRS money. All were defeated by Democrats.

Here’s Sen. Marco Rubio (R-Fla.), who’s running for reelection in November:

So pain, and maybe some gain. We’ll know soon.

The Coverage

→	NYT: “Chuck Schumer, the ‘Happy Worrier,’ Delivers,” by Carl Hulse

→	Politico: “The Sinema-Manchin split that shaped Dems’ deal,” by Burgess Everett and Marianne LeVine

→	WSJ: “How the Private-Equity Lobby Won – Again,” by Julie Bykowicz and Miriam Gottfried

→	Bloomberg: “Winners and Losers in Democrats’ Signature Tax and Energy Bill,” by Laura Davison, Erik Wasson, and Ari Natter

– Jake Sherman, Heather Caygle and John Bresnahan

---