The House on Friday passed the Inflation Reduction Act, sending Democrats’ long-sought climate, tax, and health care bill to President Biden’s desk.
To commemorate the occasion, we look back at the gnarly, tedious, rollercoaster of a legislative process that began more than a year ago when Democrats, with unified control of Congress for the first time in over a decade, began work on what was expected to be The Mother of All Bills. What did we learn? What can we unlearn?
Here are some takeaways.
The very weird 2020 election results set this grind in motion
In 2020, Democrats campaigned on an ambitious, multi-trillion-dollar agenda that required some margins. Polls heading into the election suggested they could get that—that they were on track to win the White House, an expanded House majority, and a Senate majority with a seat or two to spare. But the polling—as it has been each time Donald Trump has been on a ballot—was kind of lousy. Joe Biden scraped out a win with narrow margins in Wisconsin, Arizona, and Georgia. Democrats lost seats in the House, barely keeping their majority. Democrats took the Senate, but with zero votes to spare, by winning a pair of Georgia runoffs.
The painful paring down of a $6 trillion vision, to a $3.5 Build Back Better blueprint, to a $2 trillion Build Back Better bill that could pass the House, to—finally—a $400+ billion climate and deficit reduction bill that could pass Congress was essentially the process of aligning Democrats’ campaign ambitions with the reality of its meager majorities. (Rising inflation didn’t help, either.) It took some time, but Democrats finally passed the most they could’ve gotten with 50 Senate votes. They could’ve gotten more with 51. So, uh, keep your pants on, Democratic Senate candidates of 2022. —Jim Newell
The Bernie school of negotiations didn’t work
By the time Joe Biden was inaugurated, progressives had developed a very specific idea about how to negotiate a bill. The golden rule? Start big. Rather than show up to the bargaining table with a compromise to woo moderates and risk it being watered down, reminiscent perhaps of what happened to the Obama administration with the Affordable Care Act, they would demand their whole policy wish list, and make centrists meet them in the middle. Ask for the stars, and you might get the earth.
It didn’t really work. Democrats began with a $6 trillion outline, a legislative written by Senate Budget Chair Bernie Sanders. They finished with a $550 billion bipartisan infrastructure bill, and the Inflation Reduction Act, which spends $433 billion on climate and health care, while losing priorities like paid leave and the Child Tax Credit expansion. Why? Because Sen. Joe Manchin, professing to be worried about spending and inflation, wanted a smaller bill, and could credibly threaten to walk away from the deal, while progressives could not. In short, he had most of the leverage. The dynamic became clear during a heated private room meeting between Democrats reported to Axios, where Sanders said the party needed to pass a $3.5 trillion bill; Manchin responded by holding up a fist, shaped like a zero. “I’m comfortable with nothing,” he said.
It’s hard to blame progressives for trying the “go big or go home” approach—they may have been lulled by how easily Congress passed Biden’s truly massive COVID recovery bill. It’s also possible that their expectation setting benefitted Biden’s agenda; after all, the president is still poised to sign well over $1 trillion in new spending for long term priorities into law, once you include the bipartisan CHIPS and Science Act. But Democrats will now be left to wonder what kind of deal they could have gotten if they had simply met Manchin on his own terms last year when he suggested a figure closer to $1.5 trillion. At the very least, they might have avoided half a year of psychodrama. —Jordan Weissmann
Biden won by getting out of the way
Joe Biden logged hundreds of hours in the first year of his presidency arbitrating legislative disputes between moderates and progressives on matters big and small. He chatted up and charmed key individual senators and members of Congress in the Oval Office. He made trips to Capitol Hill basements and lunch rooms to rally the troops ahead of key steps. He endorsed many a specific strategic pathway. What all of this working-the-room got him on his Build Back Better plan by the end of 2021 was: Nothing. Well, that’s not entirely true: He got a little humiliation.
He wasn’t going to risk getting burned again when talks resumed late this spring–and he didn’t need to. By the time Manchin reentered negotiations with Chuck Schumer, there wasn’t much presidential mediation required. Democrats of all stripes, in both the House and Senate, had been beaten down and knew they would simply have to accept what Manchin could agree to, if anything. Were there no deal, Biden could say he wasn’t really involved; if Schumer and Manchin could reach a deal, Biden could declare victory. On Manchin’s end, the lack of the president and his staff breathing down his neck—Manchin blamed them for blowing up negotiations last December—made for more conducive negotiating conditions. It’s a reminder that sure, presidents will devise grand legislative plans when they’re running for office. But sometimes they can only get it by staying out of the way and letting Congress work its will. —Jim Newell
Joe Manchin turned out to be a climate hero
Manchin, the millionaire coal broker from the mining state of West Virginia, did not craft the climate bill progressives wanted. He nixed ambitious regulatory ideas, inserted gifts to the oil and gas industry, and made sure to provide plenty of cash for carbon capture projects that some experts are skeptical of. Nobody seems to think this bill alone will put us on a path to net-zero emissions at the pace scientists have urged.
But ultimately, America’s most famous house boat owner provided the 50th vote for a historic piece of legislation to decarbonize the U.S. economy; one preliminary study from Princeton suggests that, by 2035, it could achieve 90 percent of the emissions reductions the House Build Back Better plan would have. Between the inflation Reduction Act and the energy and electric vehicle provisions of the bipartisan infrastructure law, Manchin is now personally responsible for negotiating more than $400 billion in spending and tax credits related to fighting climate change and building a green economy. I don’t know if that’s more than any other single politician in the world can claim, but it’s gotta be up there.
Manchin is an anomaly in U.S. politics. As a Democrat from the Mountain State, where Donald Trump won in 2020 by 39 points, nobody else in the Senate has been so successful at outperforming their own party. Had Manchin not pulled off the unlikely miracle of holding that seat in 2018, Mitch McConnell would likely still be majority leader, and we wouldn’t be talking about any kind of major climate legislation today. The tradeoff was that the final bill had to be something Manchin could bring home to West Virginia, where fossil fuels still rule. —Jordan Weissmann
Democrats are in array on health care, in disarray on taxes
Aside from tackling climate change, the Inflation Reduction Act delivers on another key Democratic priority: Prescription drug reform. The legislation will for the first time allow Medicare to negotiate pharmaceutical prices, bringing down costs for seniors.
This is a crucial win for the party, which made fixing pharmaceutical prices a centerpiece of the 2018 midterms. The Democrats can now run on a promise kept. Paired with the expanded Obamacare subsidies it extends, the Inflation Reduction Act will let Democrats continue presenting themselves as the party of health care reform.
But when it comes to the issue of taxes, the party has work to do.
Every single major Democratic candidate for president in the 2020 cycle campaigned on a platform that involved raising taxes on the rich to pay for a major new social spending on things like health care, paid leave, and child care. It turned out that the votes to do so simply weren’t there. Sen. Kyrsten Sinema of Arizona personally nixed all manner of corporate and individual tax hikes, but didn’t act alone; throughout the process, the party’s moderates backed away from tax hikes on businesses, estates, high earners, and billionaire wealth. To fund their bill, they resorted to the most inoffensive ideas lawmakers could find—a minimum tax on corporations, a tax on stock buybacks, and increased tax enforcement (Republicans are still howling about the semi-made-up threat of 87,000 new IRS agents).
This is a worrying sign for the future. Taxing the rich is a political winner and a necessity for the party’s agenda—if Democrats want to expand the social safety net the next time they’re in power, they’ll need to agree on a way to pay for it. —Jordan Weissmann
This could be the last Democrat-only bill for a while. That’s why it happened.
The ugly, fruitless efforts to pass the Build Back Better Act last fall did a number on Democrats. It put an extended spotlight on the governing party’s dysfunction, while Republicans just sat back, relaxed, and watched their electoral fortunes rise. Were this a normal legislative effort, Democrats would’ve taken Manchin’s nixing of the bill as the final say and tried again a couple years down the road.
But there may not be a “couple years down the road.” Though the midterm environment looks a little better for Democrats right now, keeping the House remains a tall order. And given Republicans’ structural advantage in both the House and the Senate, it could be a while before Democrats get both back.
Democrats in Congress knew this was probably their last legislative window for a while. That informed the whole process. It’s why they tried to stuff the bill with so much at first. It’s why they anchored it with a climate plan, knowing this could be their last best chance to address climate change legislatively before the Earth fries up. It’s why they were intent on resurrecting the plan following the humiliations of last fall, and it’s why legislating permanent climate policy was the centerpiece of what they retained. This particular bill got done because it had to. Now there’s an off-chance they’ll be pleasantly surprised by how November goes. —Jim Newell