Democrats hope their sweeping $740 billion tax, climate and health care package will energize their voters in November, while Republicans are predicting the opposite: that an inflation-weary electorate will revolt against more government spending on liberal agenda items that rate low in polls.
Only one side will be right in an election year that almost always favors the party not holding the White House.
The Senate passed President Biden’s domestic priorities along party lines Sunday, three months before the midterm elections. It prompted immediate jockeying by Republicans and Democrats to convince voters that the legislation is either wasteful spending that will exacerbate high inflation in a weak economy or historic legislation tackling climate change, costly health care and tax cheats.
Mr. Biden told reporters Monday that the so-called Inflation Reduction Act will help Democrats because it’s filled with “game changers.”
“Will I expect it to help? Yes, I do. It’s going to immediately help,” he said. “For example, no seniors on Medicare will have bills of more than $2,000 for drugs, no matter what the costs are. That’s a big deal. There’s a whole range of things that are really game changers for ordinary folks. Now, some of [the relief] is not going to kick in for a little bit, but it’s all good.”
Sen. Marco Rubio, a Florida Republican who is running for reelection in November, agrees with the president in one respect: Voters won’t feel the bill’s impact anytime soon.
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“There isn’t a single thing in this bill that helps working people lower the prices of groceries or the price of gasoline or the price of housing or the price of clothing,” Mr. Rubio said. “There isn’t a single thing in this bill that’s going to keep criminals in jail. There isn’t a single thing in this bill that’s going to secure our border. Those happen to be things that working people in this country care about.”
Senate Minority Leader Mitch McConnell, Kentucky Republican, said Democrats will face a justifiable reckoning from voters.
“Democrats have proven over and over they simply do not care about middle-class families’ priorities. They have spent 18 months proving that. They just spent hundreds of billions of dollars to prove it again,” Mr. McConnell said. “But the working Americans they have failed will be writing Democrats’ report cards in three months’ time.”
In the face of bleak poll numbers, the highest inflation rate in 40 years and bloated prices at the gas pump, the bill’s passage presented Mr. Biden with a much-needed victory, albeit a scaled-down version of his ill-fated “Build Back Better” agenda.
Democratic strategist Brad Bannon sees no political downside to the bill, despite Republicans’ portrayal of Democrats as out-of-touch coastal elites who care more about tax credits for electric vehicles than the rising costs of everyday goods.
When combined with last week’s better-than-expected jobs report, declining fuel costs and polls spelling trouble for Republicans in several crucial Senate races, the legislation’s passage adds to Democrats’ momentum, he said.
SEE ALSO: GOP senators strip $35 insulin cap under private insurance from Democrats’ tax and climate bill
“It’s not where you start that counts; it’s where you finish,” Mr. Bannon said. “It helps build momentum for Biden, and anything that is good for Biden is good for Democrats in the midterm elections.”
The bill, which is expected to pass the Democratic-led House on Friday, includes the highest spending ever on climate initiatives, plus new health care provisions and tax hikes.
The 755-page bill includes:
• $375 billion to address climate change over the next decade, including $30 billion for a production tax credit for wind and solar power, tax credits for nuclear power and carbon capture technology, and a new fee on excess methane emissions from oil and natural gas drilling.
• A 10-year consumer tax credit for renewable energy expenses on wind and solar, plus tax credits of $7,500 for purchasing a new electric vehicle and $4,000 for a used electric vehicle.
• $64 billion for three years of Obamacare subsidy extensions.
• Free vaccinations for seniors.
• A new 15% corporate minimum tax on about 200 companies that earn more than $1 billion annually and have avoided paying the standard 21% tax rate.
• $288 billion in projected savings over 10 years by allowing the federal government to negotiate prescription drug prices with pharmaceutical manufacturers.
• A $35 insulin cap for Medicare and a $2,000 out-of-pocket cap for seniors’ prescription drugs.
• $300 billion in deficit reduction over 10 years.
Successfully stripped from the bill by Republicans was a $35 insulin cap for those with private health insurance, a move Democrats are trying to use to their advantage.
Democrats needed 60 votes to preserve the provision after the Senate parliamentarian ruled that it could not remain under strict budget rules that the party used to pass the package without any Republican votes. Seven Republican senators sided with all Democrats to keep the insulin cap for private insurers, falling three votes short of the filibuster threshold.
Mr. Bannon predicted it will “be the subject of many, many campaign commercials.”
“Republicans have just gone on the record in favor of expensive insulin,” said Sen. Ron Wyden, Oregon Democrat.
The campaign of Democratic Senate candidate Mike Franken in Iowa took aim at his Republican rival, longtime Sen. Charles E. Grassley, for voting against the insulin provision, saying it would have benefited more than 240,000 Iowans living with diabetes.
“Sen. Grassley can talk all he wants about lowering drug prices, but what he actually does in Washington — from writing the bill to ban Medicare from negotiating for lower prices to now voting against capping the cost of insulin at $35 a month — shows that what he actually cares about is protecting the profits of his drug industry donors,” Franken campaign manager Julie Stauch said in a statement.
While Democrats and environmentalists celebrate, Republicans and business groups are out in full force highlighting potential tax ramifications for Americans. The economy has shown two consecutive quarters of negative growth, an unofficial recession indicator.
The Republican National Committee warned in an email blast that Democrats will “pay the price” in November and “nothing could be more out of touch than to call Sunday’s party-line Senate vote a ‘win.’”
The Business Roundtable, an association of CEOs from many of America’s largest companies, slammed the legislation and its increased taxes targeting corporations that the group warned could have ripple effects through the entire economy.
“Imposing more than $300 billion in tax increases during a downturn is the wrong policy at the wrong time,” the group said in a statement. “In the face of growing economic risk, Congress should reject policies, like the proposed tax increases, that would undermine growth and recovery.”