After months of negotiations, on the evening of July 27, 2022, Senator Joe Manchin and Senate Majority Leader Chuck Schumer announced that they had reached an agreement on parts of President Biden’s domestic agenda (Build Back Better) to be included in a package to be passed under the Senate’s reconciliation procedure.
The Manchin-Schumer plan would generate an estimated $739 billion in revenue, spend $433 billion, and reduce the federal budget deficit by $300 billion. The revenue would be generated by a 15% corporate minimum tax, allowing Medicare to negotiate drug-price cuts, and by reducing underpayment of taxes by increasing the Internal Revenue Service (IRS) budget for enforcement. The package would also raise $14 billion from taxing carried interest at a higher rate.
The agreement would provide $369 billion for energy and climate change investments. The package also includes permitting reforms as well as electric vehicle tax credits. Furthermore, the package would extend subsidies for Affordable Care Act (ACA) premiums for three years through 2025.
| TOTAL REVENUE RAISED | $739 billion |
| 15% Corporate Minimum Tax | $313 billion |
| Prescription Drug Pricing Reform | $288 billion |
| IRS Tax Enforcement | $124 billion |
| Carried Interest Loophole | $14 billion |
| TOTAL INVESTMENTS | $433 billion |
| Energy Security and Climate Change | $369 billion |
| Affordable Care Act Extension | $64 billion |
| TOTAL DEFICIT REDUCTION | $300+ billion |
The Senate announced that it would vote on the legislation early August 2022, pending confirmation by the Senate parliamentarian that all provisions of the bill comply with Senate rules requiring reconciliation measures to be related to the federal budget. The House has its August break, but the chamber would return to session if the Senate approves the Schumer-Manchin plan.
- For the bill text, see: Inflation Reduction Act of 2022
- For a summary of the tax provisions, see: Tax Summary
- For a summary of the prescription drug reforms, see: Prescription Drugs Summary
- For a summary of the energy and environment provisions, see: Energy Security and Climate Change Investments Summary
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