The Senate is expected to begin consideration of Democrats’ climate, tax and health care package on Saturday, leaving about two days for the party to shore up support for the bill.
Senate Majority Leader Charles E. Schumer said Thursday that he’s expecting a vote on the motion to proceed Saturday afternoon, which would follow a nomination vote he scheduled for 12:30 p.m.
The motion to proceed is a simple majority threshold; no Republicans are expected to back it.
If Democrats can secure the votes to move forward, it would trigger up to 20 hours of debate before a “vote-a-rama,” when senators can offer unlimited amendments and motions to delay the process. The debate time is equally divided between the parties and senators on either side can choose to yield back time in order to get to the vote-a-rama quicker.
It remained unclear Thursday afternoon whether party leaders had secured crucial backing from Sen. Kyrsten Sinema. The Arizona Democrat has sought to nix a $13 billion tax increase on investment fund managers, which would hit earnings they get, known as “carried interest.” Sen. Joe Manchin III, D-W.Va., struck the deal with Schumer for the package after months of talks, and he’s emphasized he wants to address the carried interest “loophole.”
Sinema is also asking for roughly $5 billion in drought resilience funding to be added to the package, Politico reported. Sen. John Hickenlooper, D-Colo., who like Sinema hails from a Western state that’s been suffering from drought, said “it’s on the table,” but he didn’t know how much funding was under discussion or if it had been added to the package yet.
Sinema has also reportedly raised concerns about a 15 percent corporate minimum tax that would be based on earnings large companies report to shareholders. It’s estimated to raise $313 billion, but any changes Sinema proposes are likely to lower the revenue intake.
The tax’s proponents have pushed back on Republican criticisms that it would largely hit manufacturers. Senate Finance Chair Ron Wyden released a Joint Committee on Taxation analysis Thursday that found between 175 and 200 corporations would have fallen under the 15 percent minimum in 2019.
Those companies reported an average of $8.2 billion income on their financial statements, paying a 4.5 percent average tax rate. A subset of companies totaling between 100 and 125, reporting an average of $8.9 billion income each, paid an average tax rate of 1.1 percent, the JCT said.
Parliamentarian review
Democrats are also working to wrap up the “Byrd bath,” in which the Senate parliamentarian hears arguments from both parties and issues opinions on whether provisions meet conditions of the budget reconciliation rules. Reconciliation allows the bill to avoid a filibuster and pass with only Democrats’ votes in the 50-50 Senate.
Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said Republicans “are basically challenging pretty much every line” in her panel’s portion of the package.
“We feel good about it, but we still have some work to do,” she said.
Sinema is expected to wait for the process to play out before making her position on the package known.
“What a number of my colleagues said is they’re waiting for the parliamentarian scrub, and I’ll take them at their word,” Wyden, D-Ore., said.
Democrats chose to edit the portion of the bill allowing Medicare to negotiate prescription drug prices in response to that scrubbing. Wyden said Thursday that “we believe we’re going to meet the challenge of the Byrd rule,” which requires provisions in reconciliation bills to have a more than “merely incidental” impact on spending or revenue.
Another piece under review by the parliamentarian is a bill from Sen. Raphael Warnock, D-Ga., that would cap insulin copays for both Medicare and the private market at $35 per month, which he said has been added to Democrats’ package. There is some speculation the parliamentarian may claim the provisions capping insulin copays for private insurance run afoul of the Byrd rule.
But Warnock argues Democrats should keep the language in the package regardless of what the parliamentarian decides. If the parliamentarian says the provision does not comply with the Byrd rule but Democrats don’t remove the language from the bill, Republicans would have to raise a budget point of order to strip it. Democrats would then need to get 60 votes to waive the point of order if they want to keep the provision in.
“The parliamentarian can’t block this ultimately. Only the Senate can,” Warnock said. “At the end of the day, the only way this doesn’t happen is if someone on the other side raises an objection. And I think that would be quite unfortunate.”
Hurdles ahead
The bill could see other changes as Democrats move to finalize it.
Michigan Democrats have been hoping to soften requirements that electric vehicle components be sourced from the U.S. or its allies for cars or trucks to qualify for $7,500 tax credits. Manchin has said he was adamant about the rules, intended to force supply chains out of China.
“It’s still being discussed,” Sen. Gary Peters, D-Mich., said Thursday. “We just want to make sure it actually works for automakers so that they can eventually have the credit to be able to eventually scale up EV production.”
Democrats unhappy with aspects of the bill could offer amendments during the “vote-a-rama” process, but Schumer is likely to request his party to limit amendment offerings. Republicans, meanwhile, are drafting dozens of amendments to force politically difficult votes months before November’s midterm elections.
Sen. Benjamin L. Cardin, D-Md., said Democrats have discussed their strategy for the vote series “in broad strokes.”
“I am confident at the end of the day we’ll keep our 50 votes; that’s our game plan,” he said.
Cardin also suggested the vote-a-rama could get underway as soon as Saturday. He said ahead of Schumer’s timing announcement that senators were trying to work out a schedule with some predictability and get an agreement to shorten the 20 hours of debate to move more quickly to the amendment votes.
Still, Stabenow, a member of Democratic leadership, said she expects the “vote-a-rama” process may spill into next week.
“I would suggest no plans for the weekend if you are covering this,” Stabenow told reporters. “And you should hope that we are done by the end of the weekend, because that’s not at all clear actually.”
How long the vote-a-rama goes on is ultimately up to Republicans’ appetite for forcing votes.
“The strategy on vote-a-rama is pretty plain and simple,” Sen. Richard M. Burr, R-N.C., said. “We vote until everybody’s exhausted.”
“My sense is that there’s more resolve this time than any of the previous vote-a-ramas,” Cramer said. “Just because, you know, just how often can this happen? How often can we continue to go down this path and in a high-inflation, high-recession situation?”
Cramer pointed to a letter from the Congressional Budget Office to Senate Budget ranking member Lindsey Graham, R-S.C., that said Democrats’ bill would have “negligible” impact on inflation this year. In 2023, inflation could be somewhere between 0.1 percentage point higher or 0.1 percentage point lower, the CBO said.
The CBO said it couldn’t forecast the impact of the bill on economic growth due to some offsetting factors; while lower deficits would lead to lower interest rates and more private investment, the corporate minimum tax would depress business investment.
Also, the agency said that as of early August it wasn’t clear that the U.S. economy was currently in recession, despite two straight quarters of negative growth.
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