Sen. Joe Manchin (D-W.Va.) announced on Wednesday that he has struck a deal with Senate Majority Leader Charles Schumer (D-N.Y.) on legislation aimed at advancing key pieces of President Biden’s agenda, including measures that target taxes, lowering drug prices and combating climate change.
“I strongly support the passage of commonsense policies that reduce inflation and focus on the major challenges confronting America today and in the future,” Manchin said in a statement.
“I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” he added.
The announcement comes after Manchin had previously backed away from talks relating to climate and tax provisions, saying he’d rather focus on lowering drug costs.
A joint statement from the two offices said they finalized a legislative text that will invest about $300 billion in deficit reduction and $369.75 billion in energy security and climate change programs over 10 years.
This is scaled down from a previous Democratic proposal which would have invested more than $500 billion in combating climate change, but Schumer and Manchin said their legislation is expected to cut carbon emissions by about 40 percent by 2030.
A more detailed estimate says that the package would raise a total of $739 billion in revenue through programs including a 15 percent corporate minimum tax, prescription drug pricing reform and IRS tax enforcement.
In addition to climate spending, the bill will also spend 64 billion on extending the Affordable Care Act.
Manchin’s statement said that the deal invests in technologies that would bolster various types of energy including fossil fuels, renewables, nuclear hydrogen and energy storage.
He added that it also invests in reducing both domestic emissions of planet-warming carbon and methane, and in global emissions reductions.
Manchin’s initial statement did not include policy specifics on how this would be achieved, but many of the objectives he laid out appear to be in line with previously proposed clean energy tax credits.
On the tax side, Manchin said he’d adopt a policy that “protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share.”
Democrats are aiming to pass the bill through a process known as budget reconciliation, which will allow the party to act without Republican buy-in, bypassing a likely GOP filibuster. But to pass the bill, Democrats will need the support of all their members in the 50-50 Senate.
Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee and a key player in tax negotiations for the plan, wouldn’t say on Wednesday whether all Democrats were on board with proposed expansions.
“Almost two weeks ago, I said that I believe we’re basically there on clean energy tax credits, and I still feel that way,” he said. However, he declined to comment further on party support for the tax measures amid questions over where Sen. Kyrsten Sinema (D-Ariz.), a key centrist, stands on the proposals.
President Biden said in a statement that he supports the agreement and called for its passage.
“This is the action the American people have been waiting for. This addresses the problems of today — high health care costs and overall inflation — as well as investments in our energy security for the future,” he said.
“If enacted, this legislation will be historic, and I urge the Senate to move on this bill as soon as possible, and for the House to follow as well,” Biden added.
Some Democrats were encouraged by the news, though others have been hesitant to comment on the deal until more details emerge.
“Once I see the details, I’ll be able to let you know,” Sen. Ed Markey (D-Mass.) told reporters when asked if he was encouraged by the news shortly after passage.
“Last I heard Manchin wasn’t a majority leader, despite what you may think,” Sen. Bernie Sanders (I-Vt.) told reporters. “Last I heard he’s not the only member of the Democratic caucus. I will look at it. We’ll go from there.”
Senate Republicans were pressed by reporters about the timing of the announcement, which came after the upper chamber passed a scaled-down bill aimed at boosting U.S. competitiveness against China.
“You think we got sucker-punched?” Sen. John Cornyn (R-Texas) joked in remarks to reporters. He added to The Hill later on that he doesn’t believe the two bills “were connected.”
The China competitiveness bill passed with bipartisan support in a 64-33 vote.
However, the Senate abandoned plans to move forward with an earlier, expanded version, after Republicans opposed the larger measure due to Democratic efforts to pass a partisan spending bill through reconciliation.
Manchin had previously indicated that he wasn’t ready to move forward with the climate and tax provisions right away after viewing the latest statistics on inflation. He said at the time that it was “not prudent” to move ahead.
Democrats told reporters they plan to find out more about the forthcoming plan at a caucus meeting later on Wednesday.
With a nearly month-long recess scheduled in August, timing around potential passage remains unclear. Democrats are also facing a crunch on legislative time, as the critical midterm elections approach and a government funding deadline looms in late September.
“I think the parliamentarian can work overtime to review this quickly,” Sen. Chris Van Hollen (D-Md.) told reporters, adding that he thinks “people are prepared to stay here as long as it takes.”
Updated: 7:24 p.m.