The final vote was 220-207, along party lines. Four Republicans did not vote.
Now that the Democratic-controlled House has passed the bill, it will go to Biden to sign it.
The bill’s final passage marks a milestone for Democrats and gives the party a chance to achieve long-sought policy goals ahead of the upcoming midterm elections. It comes at a critical time as Democrats struggle to maintain control of narrow majorities in Congress.
The sweeping bill, called the Inflation Reduction Act, would represent the largest climate investment in U.S. history and make major changes to health care policy by giving Medicare the power for the first time to negotiate the prices of certain drugs with prescription and extend health care that expires. grants for three years. The legislation would reduce the deficit, pay for it through new taxes — including a 15 percent minimum tax on large corporations and a 1 percent tax on stock buybacks — and increase the Internal Revenue Service’s collection capacity .
It would raise more than $700 billion in government revenue over 10 years and spend more than $430 billion to reduce carbon emissions and expand health insurance subsidies under the Affordable Care Act and use the rest of the new revenues to reduce the deficit.
House proceedings after Senate Democrats passed the bill
The House adopted the legislation after passage in the Senate following a marathon night session of votes on controversial amendments.
In the Senate, the bill passed on a final party-line vote of 51-50, with Vice President Kamala Harris breaking the tie.
Senate Democrats, who control only a narrow 50-seat majority, ultimately held together to pass the legislation. And they used a special, filibuster-proof process known as reconciliation to pass the measure without Republican votes.
The passage of the bill in the House marked a major milestone for Senate Democrats, who had long hoped to pass a signature legislative package but had struggled for months to reach a deal that had the full support of his caucus
Sen. Joe Manchin played a key role in shaping the legislation, which only moved forward after West Virginia Senate Majority Leader Chuck Schumer announced a deal in late July, a key advance for to Democrats after previous negotiations had stalled. Sen. Kyrsten Sinema, D-Ariz., was also at the center of the effort to pass the bill, and Sinema, Manchin and other senators worked through the weekend making changes to the bill.
The approval in the Senate came after a long stretch of voting on amendments known as “vot-a-rama” that lasted almost 16 hours from Saturday night to Sunday afternoon.
Republicans used the weekend’s “vote-a-rama” to put Democrats on the spot and force politically tough votes. They were also successful in removing a key provision to cap the price of insulin at $35 a month on the private insurance market, which the Senate lawmaker ruled did not comply with Senate reconciliation rules. The $35 insulin cap for Medicare beneficiaries remains in place.
In the end, Republicans lined up to oppose the bill. Senate Minority Leader Mitch McConnell said in a statement that the bill included “giant job-killing tax increases” and was “a war on America’s fossil fuels.” The Kentucky Republican said Democrats “don’t care about the priorities of middle-class families.”
How the bill addresses the climate crisis
While economists disagree on whether the package would, in fact, live up to its name and reduce inflation, especially in the short term, the bill would have a crucial impact on reducing carbon emissions.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history and the biggest victory for the environmental movement since the historic Clean Air Act.
Analysis by Schumer’s office, as well as multiple independent analyses, suggests the measure would cut US carbon emissions by up to 40% by 2030. It would require strong climate regulations from the Biden administration and action of states to reach Biden’s goal of reducing emissions by 50% by 2030.
The bill also contains many tax incentives aimed at reducing the cost of electricity with more renewable energy and encouraging more American consumers to switch to electricity to power their homes and vehicles.
Key health and fiscal policy in the bill
The bill would allow Medicare to negotiate the prices of certain expensive drugs administered in doctor’s offices or purchased at the pharmacy. The Secretary of Health and Human Services would negotiate prices for 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. That number would increase to 20 drugs a year by 2029 and beyond.
The controversial provision is much more limited than what House Democratic leaders have supported in the past. But it would open the door to fulfilling a long-standing party goal of allowing Medicare to use its weight to lower drug costs.
Democrats also plan to extend enhanced federal subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way, they wouldn’t expire right after the 2024 presidential election.
To raise revenue, the bill would impose a minimum tax of 15 percent on the income that large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits above $1 billion.
Concerned about how that provision would affect certain businesses, particularly manufacturers, Sinema has suggested she won changes to the Democrats’ plan to reduce how businesses can deduct depreciated assets from their taxes. The details remain unclear.
However, Sinema rejected his party’s effort to tighten the interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a capital gains tax rate of long term of 20% instead of income tax rates of up to 37%.
The provision would have extended the length of time investment managers must hold profit interests from three years to five years to take advantage of the lower tax rate. Addressing that gap, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.
In its place, a 1 percent excise tax on corporate share buybacks was added, raising another $74 billion, according to a Democratic aide.
CNN’s Alex Rogers, Ella Nilsen, Tami Luhby, Katie Lobosco and Matt Egan contributed to this report.