After eighteen months of negotiations and a night of debates, the US Senate adopted, on Sunday August 7, Joe Biden’s major “anti-inflation” plan centered on climate and health, offering a significant stage victory to the president, less than 100 days from the midterm elections.
By their votes alone, the Democrats approved this plan of more than 430 billion dollars of investments (more than 420 billion euros), which will return next week to the House of Representatives for a final vote, before being signed into law by Mr. Biden.
The US president welcomed the newsSunday night. “A lot of compromises had to be made. Doing important things almost always requires it”he said in a statement. “This bill will change America for decades to come”assured the leader of the Democrats in the Senate, Chuck Schumer, just after the vote, greeted by thunderous applause in his camp.
Largest investment committed in the United States for the climate
All Republican senators voted against the text, renamed the Inflation Reduction Act, which they accuse of generating unnecessary public spending. The result of difficult negotiations with the right wing of the Democratic Party, this envelope includes the largest investment ever committed in the United States for the climate – 370 billion dollars to reduce greenhouse gas emissions by 40% by to 2030.
With this reform, an American will receive up to 7,500 dollars in tax credits for the purchase of an electric car. The installation of solar panels on its roof will be covered at 30%. This reform must also make it possible to strengthen the resilience of the forests in the face of the fires which are ravaging the American West and whose multiplication has been directly attributed to global warming.
Several billion dollars in tax credits will also be offered to the most polluting industries in order to assist them in their energy transition, a measure strongly criticized by the left wing of the party, which had to line up behind this text, for lack of reaching a more ambitious agreement.
Too costly for Republicans, not ambitious enough for left-wing Democrats
Coming to power with huge reform plans, Joe Biden saw them being buried, resurrected, then buried again by a very moderate senator from his camp, Joe Manchin. In view of the very thin Democratic majority in the Senate, the elected representative of West Virginia, a state known for its coal mines, has virtually a right of veto over his projects. At the end of July, the leader of the Senate Democrats finally managed to extract a compromise from Mr. Manchin.
On Saturday, the senators finally began to debate the text in the hemicycle. In the evening, they entered a procedure dubbed « vote-a-rama »during which elected officials have, for fifteen hours in a row, proposed dozens of amendments and demanded a vote on each.
The opportunity for the Republican opposition, which considers the Biden plan too expensive and the Democratic left wing, which wanted it wider, to present their grievances. Influential senator on the left, Bernie Sanders presented several amendments during the night supposed to strengthen the social aspect of the text, which in recent months has been considerably trimmed.
“This bill does nothing to solve this problem”
The text provides for 64 billion dollars of investment in health and the gradual reduction in the price of certain drugs, which can be up to ten times more expensive than in other rich countries. But progressives had to abandon their ambitions of free public kindergartens and universities and better care for the elderly.
“Millions of retirees will continue to have rotten teeth and not receive the dentures, hearing aids or glasses they deserve”criticized Mr. Sanders from the hemicycle. “This bill does nothing to solve this problem”, assured the former presidential candidate. But the Democratic camp, anxious to implement this plan before the perilous legislative elections in November and offer a victory to the President, united and rejected the vast majority of the amendments.
In parallel with these massive investments, the bill intends to reduce the public deficit with a new minimum tax of 15% for all companies whose profits exceed one billion dollars. It aims to prevent certain large companies from using the tax loopholes which have allowed them to pay far less than the theoretical rate. It is estimated that this measure could generate more than $258 billion in US federal revenue over the next ten years.