Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.V.) announced an agreement on July 27 on a climate, tax, energy, and health care reconciliation bill, the Inflation Reduction Act of 2022. The agreement followed months of negotiations among Senate Democrats to develop reconciliation legislation after the House passed the Build Back Better Act (H.R. 5376) [refer to Washington Highlights, Dec. 17, 2021].
The agreement would generate about $739 billion in revenue through raising corporate minimum taxes, increased Internal Revenue Service enforcement, prescription drug pricing policy savings, and higher carried interest taxes. Of the revenue, $300 billion would be allocated to deficit reduction, with $433 billion being used for energy, climate, and health care policies.
The health care policies included an AAMC-supported three year continuation of the enhanced premium tax credits provided in the American Rescue Plan Act (P.L. 117-2) [refer to Washington Highlights, July 15]. The legislation also included a provision that would allow Medicare to negotiate with prescription drug companies for lower prices, a requirement that drug manufacturers rebate Medicare if they raise the prices of their drugs more than inflation, and a $2,000 annual cap on what seniors on Medicare pay for drugs.
Schumer has stated the Senate will consider the reconciliation language before lawmakers begin their August recess. The legislation will now be reviewed by the parliamentarian, Elizabeth MacDonough, to determine if it meets the requirements to be considered under the reconciliation process. Then the legislation will be brought to the floor, where all 50 Democratic Senators must vote in favor of its passage, given expressed opposition by Senate Republicans, with Vice President Kamala Harris expected to serve as the tie-breaking vote. The bill must then be considered by the House. President Biden has indicated support for the legislation and has urged both chambers to quickly pass it.
- Washington Highlights