WASHINGTON (CN) — Returning from August recess for one day, House Democrats passed a massive climate, health care and tax bill Friday that aims to deliver on long-touted campaign promises to reduce drug prices and combat climate change at the federal level while raising taxes on wealthy corporations.
The Inflation Reduction Act, the brainchild of a last-minute deal between Senate Majority Leader Chuck Schumer and conservative Democratic Senator Joe Manchin of West Virginia, revived policy goals and legislation many thought were destined for the cutting room floor after months of previous negotiations failed to gain Manchin's support for a Democrat-backed bill.
Lawmakers returned to Washington from August recess, a time when members take a break from the congressional schedule and typically work from their home states, to get the bill across the finish line. It passed the House by a vote of 220-207 with all Democratic members backing the legislation.
Now, the sweeping reconciliation bill is headed to President Joe Biden's desk, marking a major win for Democrats just months shy of the November midterms.
The package aims to lower prescription drug and healthcare prices by empowering Medicare to negotiate prescription drug prices for a limited number of drugs, beginning in 2026, and monthly insulin prices for people who use Medicare will be capped at $35 a month.
It also includes a policy long fought for by Democrats that would extend Affordable Care Act subsidies for people purchasing their own insurance until 2025, preventing insurance premiums from rising.
"These measures are a big blow to Pharma, which has had a stranglehold for decades," Speaker of the House Nancy Pelosi said on the House floor Friday.
Climate advocates have celebrated the package, which includes the largest ever federal investment to fight climate change.
An estimated $369 billion will go to green energy and climate provisions over the next decade, an investment Democrats say will put the U.S. on track to reduce the country's carbon emissions by 40% by 2030, compared to 2005 levels.
That climate investment includes subsidies for people buying electric vehicles and green energy resources for their homes such as solar panels or heat pumps.
These policies will be paid for by revenue generated through the package, which hikes up the minimum corporate tax rate for some wealthy companies, taxes stock buy-backs and beefs up the IRS to target tax evaders.
"It makes a difference at the kitchen table. And at the board room table, corporations and the wealthy will now have to pay their fair share," Pelosi said during a press conference early Friday.
Democrats say those tax policies and the new IRS funding will pay for the bill while also cutting the federal deficit by $300 billion over the next decade, though the nonpartisan Congressional Budget Office put that number closer to $100 billion.
Republicans have criticized the IRS funding, arguing it will lead to audits of middle class families.
Representative Kevin Brady, a Republican from Texas, called the bill a “hoax on the American people.”
"If the Green New Deal and corporate welfare had a baby, it would look like this," Brady said on the House floor Friday.
The IRS has said the bill will improve customer service and fund audits on wealthy Americans. Additionally, Treasury Secretary Janet Yellen directed the service not to use the new financial support to increase audits of people making less than $400,000.
"I believe today we are demonstrating what Democrats mean when we say that we are putting people over politics. Our Republican colleagues continue to put their politics over the people’s health and wellbeing," Majority Whip James Clyburn, a Democrat from South Carolina, said.
House Minority Leader Kevin McCarthy slammed the legislation as "the largest tone-deaf bill I've ever seen in this chamber in 232 years."
"Democrats, more than other ones already in history, are addicted to spending other people's money regardless of what we as a country can afford," McCarthy said on the chamber floor Friday.
In order to get Manchin on board with the legislation, Democrats cut out provisions from what was once the $2 trillion Build Back Better Act, particularly policies aimed at reducing child poverty and expanding the social safety net.
The child tax credit, which gave monthly checks to families amid the pandemic, and calls for universal pre-school as well as paid family leave did not make it into the final bill.
Manchin, a Democrat in a state that relies heavily on the coal and oil industries, got some of his personal policies in the compromise, including a provision that will expand oil and gas leasing.
Democrats also agreed to support a bill down the line on permitting reforms that will likely expedite how quickly oil and gas companies can expand their projects.
While the legislation is strategically branded as a malady to the nation's inflation woes, some experts predict a minor change to inflation in the long-term, and the Penn Wharton Budget Model, predicts "the impact on inflation is statistically indistinguishable from zero."
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