Senate Democrats advance Schumer-Manchin-Biden spending bill
The Democratic-controlled Senate voted Saturday night along party lines to pass a $570 billion tax hike as part of a spending bill that contains costly climate provisions.
Vice President Kamala Harris, in her role as Senate Speaker, cast a deciding vote just after 7:30 p.m. to make the count 51-50 in the equally divided chamber after nearly two hours.
During negotiations, the bill won the support of two sometimes maverick Senate Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.
President Joe Biden and Democrats are calling their legislation, which is more than 750 pages long and expected to impose a $4,500 tax hike on the average American over the next decade, the Cut Inflation Act. .
Shortly after debate began on the actual legislation, even Sen. Bernie Sanders, I-Vt., called the bill “the so-called Inflation Reduction Act.”
Sanders, who describes himself as a democratic socialist, quoted the Congressional Budget Office as saying of the bill, “It will have minimal impact on inflation.”
Inflation is 9.1%, with the typical employee’s real salary falling by almost $3,400. Despite the bill’s name, an analysis of it by the Wharton School at the University of Pennsylvania says:
The law would increase inflation very slightly until 2024 and decrease inflation thereafter. These point estimates are statistically indistinguishable from zero, indicating low confidence in the impact of the legislation on inflation.
Jessica Anderson, executive director of Heritage Action for America, said it was ludicrous for Democrats to claim the legislation would reduce inflation. In a prepared statement, Anderson said:
Despite the left’s best attempts to enlighten the American people by naming this package the Cut Inflation Act, analysis by the Heritage Foundation and the Joint Committee on Taxation shows that passage of this bill will increase actually inflation in the short term while killing jobs and damaging the economy in the long term.
The package attacks American businesses and manufacturers through a 15% corporate income tax, which will be paid by Americans in almost all income categories. In addition to tax hikes on nearly all Americans, including billions a year for those earning less than $200,000 a year, the bill includes $80 billion for the IRS to hire an army of 87 000 more officers to audit Americans in lower tax brackets.
Heritage Action is the local affiliate of The Heritage Foundation, parent organization of The Daily Signal.
The Democrats’ spending bill was expected to pass on Sunday, again with a deciding vote from Harris if needed.
Only after the legislation allowed for a lengthy “vote-a-rama,” up to 8 p.m., during which every senator is free to propose amendments and get a vote.
Senate Majority Leader Charles Schumer, D.N.Y., called the legislation “a groundbreaking bill” for families, seniors and children.
“This is one of the most comprehensive and impactful bills Congress has seen in decades,” Schumer said Saturday during a speech in the Senate just before the vote to proceed with the review. the legislation. “It will reduce inflation. This will reduce prescription drug costs. It will fight against climate change. This will close tax loopholes and reduce the deficit.”
Democrats are fast-tracking their legislation through the Senate procedure known as reconciliation, in which only a simple majority of 51 votes, not the usual 60, is required to move a bill forward. To do this, the content must be determined by the Senate parliamentarian to be matters of expenditure and not matters of policy.
Sen. John Cornyn, R-Texas, spoke for many other Republicans when he said the legislation would mean “higher taxes, bigger government, more inflation and fewer jobs.” In a speech on the ground, Cornyn said:
It really is an insult to the intelligence of the American people to think that you can spend so much money and tax individuals and corporations during a recession – something that everyone from Bill Clinton to Barack Obama going through Chuck Schumer and Joe Manchin – said you don’t have to do that, which is to raise taxes in a recession.
Referring to the green energy provisions, Cornyn called the bill a “reverse Robin Hood” to tax middle-class Americans who cannot afford electric cars while “giving a tax subsidy to people rich who can afford” electric vehicles.
The Texas Republican also criticized plans by Democrats to expand the IRS, including adding more than 85,000 agents.
“They want to supercharge the Internal Revenue Service with even more manpower and authority to track ordinary Americans and do, I guess, many, many more audits of not just the rich and famous, but also on middle-class Americans,” Cornyn said.
With their proposed amendments, Republicans planned to use the vote-a-rama process to force Democrats to many uncomfortable votes on those provisions.
The legislation calls for spending $369 million to cut carbon emissions by 40% by 2030, in line with energy policies already pushed by the Biden administration and Democrats.
On the tax front, the legislation aims to generate about $500 billion in revenue through proposed minimum corporate tax requirements and new enforcement actions from the Internal Revenue Service.
The legislation would spend $79.6 billion to strengthen the IRS to collect and enforce more taxes. This would add 87,000 new officers to the Internal Revenue Service for tax enforcement. The bill also provides for the expansion of tax controls and tax privileges. The goal is to raise revenue to pay for Democrats’ pet programs.
Biden has repeatedly said the bill would only raise taxes for Americans earning more than $400,000 a year.
However, the nonpartisan Congressional Joint Committee on Taxation has determined that taxes will rise by up to $16.7 billion for Americans earning less than $200,000 in 2023, and rise by $14.1 billion for those earning between $200,000 and $500,000.
Passing the legislation, which some Republicans call the Manchin-Schumer-Biden tax hikes, would put Americans earning less than $75,000 around $136 billion — more than a quarter — of the burden, according to an analysis by the Heritage Foundation.
Wealth’s analysis shows that income measures would disproportionately affect taxpayers earning less than $25,000 a year. Although this group accounts for about 5% of the economy’s total income, these Americans would ultimately bear about 8% of new tax revenue if the Senate passes the bill as written.
Americans earning more than $100,000 would face an estimated additional tax burden of $10,883 between 2023 and 2031, while taxpayers with incomes between $50,000 and $100,000 would pay an additional $2,431 in taxes.
Those earning less than $50,000 a year would pay an additional $1,009, according to the analysis.
The bill also includes provisions on health care.
Early Saturday, Senate Congresswoman Elizabeth MacDonough did not allow Democrats to move forward with sweeping new measures to control drug prices. However, a provision allowing Medicare to negotiate the cost of the prescription drugs it purchases was left in the bill.
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