How Democrats coalesced around the Inflation Reduction Act

Judy Woodruff:

It's a fraction of what President Biden first sought more than a year ago, but after working through the weekend, Democrats are on the cusp of passing an historic spending package.

Congressional correspondent Lisa Desjardins is here to unpack what's in the deal and how party leaders managed to get it done.

So, hello, Lisa.

Tell us, what are the main elements of this and how did they get it done?

Lisa Desjardins:

What a dramatic weekend.

That the on-party-lines vote that happened yesterday advanced this massive piece of legislation in the U.S. Senate. The House is expected to vote Friday.

So, let's look at the big picture. What is in this large piece of legislation? One thing that would change here significantly, it aims to set a corporate minimum tax of 15 percent for large companies. It would use that money in a few ways. It also would overhaul how Medicare handles prescription drugs. That would save the government money and save some people on Medicare money as well.

And there are extensive tax credits throughout this bill to deal with climate change. That's where it spends some of the money raised through those tax increases for some corporations.

Now, Judy, I want to talk to people about one other thing in this bill. It would also decrease the deficit. Now we're waiting for final estimates from the Congressional Budget Office. But here's what we thought the bill looked like as of yesterday, and here's how that deficit reduction works.

So, first of all, you take the money brought in by all those tax changes, that's almost half-a-trillion dollars. Then you add those health care savings from allowing Medicare to negotiate drug prices. That's about $200 billion. Then you take — add in that climate spending. So, that takes away. That's about $400 billion, also a large amount.

In the end, you add it all up and you get over $200 billion of deficit reduction, in addition to everything else in this bill. How did Democrats do it? This bill was dead just a few weeks ago. You and I talked about it.

Well, it was a combination of grit and trust and pressure involving two men in particular, Senate Democratic Leader Chuck Schumer and West Virginia Senator Joe Manchin, who said he couldn't get on board. Well, he had secret talks with Senator Schumer. He said and Schumer said today it's because of all the pressure after he backed out that came on to Joe Manchin.

Sen. Chuck Schumer (D-NY):

Joe Manchin and I had some really heated arguments. And, as he said, I turned the dogs on him when he backed off the agreement a week ago — two weeks ago Thursday.

But we always showed each other respect. And you have to understand he's — West Virginia is not New York.

Lisa Desjardins:

So this was a matter of the relationship there that Manchin had with Schumer.

But, also, we had some drama yesterday when Senator Kyrsten Sinema had an issue with the bill even as it was about to face a vote How did they get around that? Another important face in all of this, Senator Ron Wyden, the chair of the Finance Committee. His staff managed to find $30 billion to help plug that hole that was a problem yesterday, and his staff had a huge part in writing this bill, a really major achievement for him and Democrats, who — many staffers have been working on this for well over a year

Judy Woodruff:

So many twists and turns in this story, Lisa, as you said.

So that does give us a sense of the big picture. Also, give us a sense of what this could mean for individual Americans.

Lisa Desjardins:

So much to talk to you about in this, and I think we're going to be talking about it on the show for a few days.

But, obviously, for those on Medicare, this could save a lot of money in terms of drug prices. It caps what you could spend out of pocket on Medicare on drugs at $2,000. That's significant.

But I also want to talk about the electric vehicle credit, because that's something that will affect most families in this country. In this bill, there is an extension of a tax credit to buy an electric vehicle, a new one, $7,500. And you would get that off the price right there at the dealership.

Now, this would be $4,000 if you bought a used electric vehicle. It does exclude some of the pricier electric vehicles. The idea is, this is not meant to be for luxury vehicles, but for affordable-ish electric vehicles for most people.

And it also would limit it to who can get this to individuals making $150,000 or less, families, double that. So this is something that most Americans can consider. There is a question — it's so broad — of whether there are enough electric vehicles that qualify right now for all the demand that this may spark initially.

But the idea here is that, long term, it's creating a huge boost to this industry that Democrats see as vital in terms of fighting climate change.

Judy Woodruff:

So, Lisa, we know this is a pretty big bill, 750 pages. You're always very good at finding some things that are generally overlooked. What did you find in here?

Lisa Desjardins:

I'm going to go through just a few things here. It would actually expand some drilling. That's one thing that Senator Joe Manchin wanted on federal lands.

However, it would make that drilling more expensive, and offshore as well. It would also expand IRS capabilities to audit Americans, really adding some heft to the Internal Revenue Service. And then, finally, coal miners got something out of this. It made permanent funds to help victims who have black lung disease from their time working in coal mines.

Judy Woodruff:

And, Lisa, just finally, the Democrats did call this the Inflation Reduction Act. How much does it actually reduce inflation?

Lisa Desjardins:

Remains to be seen, but the Congressional Budget Office said the effects on inflation in the short term are negligible — Judy.

Judy Woodruff:

All right. And we will leave it there.

Lisa Desjardins, thank you.