The amendment process, known on Capitol Hill as a “vot-a-rama,” began Saturday night shortly after 11:30 p.m. ET. The final vote on the bill will take place after votes on the amendment, the timing of which is still unclear.
But senators are looking to make changes to the bill, just hours before the chamber is expected to pass it.
Democratic senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona are in talks with Senate Republican leader John Thune about the 15 percent minimum business tax. The two Democrats, who are instrumental in writing and passing the legislation, were seen by CNN entering Thune’s office on Sunday.
“We’re having conversations and we’re still working,” Thune said.
The issue has been leaking since Saturday after Sinema uncovered language in a draft of the bill showing how subsidiaries of companies owned by private equity firms could be hit by the 15 minimum corporate tax % if their combined accounting income exceeds $1 billion, according to a Senate. source familiar with the subject.
If Sinema succeeds in amending that provision, the bill would raise $35 billion less in revenue, potentially reducing the roughly $300 billion in deficit savings that is a key priority for Manchin.
In a potential problem for Democrats, Sinema could support a Thune amendment to exempt these companies from the minimum corporate tax and pay for lost revenue by extending for one year a limitation on state and local tax deductions for individuals up to in 2026.
If the Senate adopts Thune’s proposal, several Democrats in the House, mainly from coastal districts, who have campaigned to repeal the SALT deduction limits, could oppose it.
The 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 prescription drugs and extend expiring health care subsidies. 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.
Senate Democrats need only a simple majority for final passage of the bill because they are using a process known as reconciliation, which allows them to avoid a Republican filibuster and the corresponding 60-vote threshold.
However, to pass a bill through the reconciliation process, the package must meet a strict set of budget rules. And Republicans are using the vote-a-rama to put Democrats on the spot and force politically tough votes.
Republicans also succeeded in removing key insulin provisions to cap the price of insulin at $35 a month on the private insurance market, which the Senate lawmaker ruled did not comply with the rules of reconciliation of the Senate. The $35 insulin cap for Medicare beneficiaries remains in place.
After the Senate passes the bill, the House is expected to return to Washington on Friday for consideration.
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 U.S. history and the biggest victory for the environmental movement since the landmark Clean Air Act. It also comes at a critical time; This summer has seen punishing heat waves and deadly floods across the country, which scientists say are linked to global warming.
Analysis by Senate Majority Leader Chuck Schumer’s office, as well as multiple independent analyses, suggests the measure would cut U.S. carbon emissions by up to 40 percent by 2030. It would require strong climate regulations from the Biden administration and action by states to meet President Joe 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.
Lawmakers said the bill represents a monumental victory and is also just the beginning of what is needed to combat the climate crisis.
“This is not about the laws of politics, this is about the laws of physics,” Sen. Brian Schatz, D-Hawaii, told CNN. “We all knew that in this endeavor we had to do what science tells us what to do.”
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 Department 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.
That 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 tax rate on long-term capital gains of 20% instead of income tax rates of up to 37%.
The provision would have extended the time that investment managers’ profit interests must be held 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.
This story and headline have been updated with additional updates.
CNN’s Ella Nilsen, Tami Luhby, Katie Lobosco, Matt Egan and Kristin Wilson contributed to this report.