President Joe Biden on Thursday touted Democrats’ new package of climate, tax and health care measures — now dubbed the Inflation Reduction Act of 2022 — and urged Congress to quickly pass the deal unveiled Wednesday in a surprise announcement by Sens. Joe Manchin (D-WV) and Chuck Schumer (D-NY).
“Look, this bill is far from perfect,” Biden said. “It’s a compromise. But it’s often how progress is made: by compromises. And the fact is that my message to Congress is this: This is the strongest bill you can pass to lower inflation, cut the deficit, reduce health care costs, tackle the climate crisis, and promote energy security, all the time while reducing the burdens facing working-class and middle-class families. So, pass it. Pass it for the American people.”
Here, a few takeaways on the bill — click here for more on what’s in it — and the path it faces.
It would reduce inflation, and the deficit: Manchin had previously balked at Democrats’ climate and tax measures, but he told reporters Thursday that he came around on the deal after concluding that it would help lower inflation. Manchin reportedly reached that conclusion with some help from Larry Summers, the former Treasury secretary who had been vocal in opposing last year’s $1.9 trillion stimulus act and warning that it would fuel inflation.
And the fiscal watchdogs at the Committee for a Responsible Federal Budget say that the bill’s $305 billion in deficit cuts represent “the first meaningful deficit reduction in a decade,” adding that those budgetary effects, along with some of the policies in the bill, will help fight inflation and lower the risk of a recession.
“The Most Ambitious Climate Action Undertaken by U.S.”: The Democratic package includes $385 billion in energy and climate provisions, and while the funding for such measures is less than the $550 billion Democrats sought under the failed Build Back Better Act, the new deal still represents “the most ambitious action ever taken by the United States to try to stop the planet from catastrophically overheating,” as Lisa Friedman and Brad Plumer report in The New York Times. Senate Democrats reportedly estimate that the legislation will enable the country to cut greenhouse gas emissions from 2005 levels by 40% by the end of the decade, close to the 50% goal set by Biden in accordance with scientific guidance.
Manchin won more concessions: Emily Cochrane of the Times reports that Manchin ultimately agreed to the deal after getting Democrats to make some more changes. “The critical concessions that ultimately won Mr. Manchin’s support included jettisoning billions of dollars’ worth of tax increases he opposed and winning a commitment from President Biden and Democratic leaders to enact legislation to streamline the permitting of energy infrastructure,” Cochrane writes. “That could ease the way for a shale gas pipeline project in West Virginia in which Mr. Manchin has taken a personal interest.”
It’s not a done deal: Democrats could still snatch defeat from the jaws of victory ... again. Most notably, Sen. Kyrsten Sinema (D-AZ) has yet to sign off on the deal and had previously opposed some elements included in the new package. Analyst Chris Krueger of the Cowen Washington Research Group suggests that the proposed reforms to the carried interest tax law might get cut to win Sinema’s support, calling it “classic DC negotiation-style to put something in a bill only to have it removed later so that a lawmaker (see: Sinema, Kyrsten) can claim a ‘win’.”