Sen. Manchin has reversed course and agreed to a climate and taxes bill Senate Majority Leader Chuck Schumer and Sen. Joe Manchin have revived a deal for climate measures and changes to the tax code, in addition to measures aimed at reducing health care costs.

Sen. Manchin has reversed course and agreed to a climate and taxes bill

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LEILA FADEL, HOST:

A breakthrough - after over a year of talks, West Virginia Senator Joe Manchin and Senate Majority Leader Chuck Schumer have finally reached a deal on an energy and health care bill that's also aimed at addressing inflation.

ASMA KHALID, HOST:

The Democrats' plan is to vote on the entire package next week, ahead of an annual month-long break in August. President Biden says he supports the plan. But in order for the bill to pass, it needs unanimous support among Senate Democrats.

FADEL: NPR congressional correspondent Kelsey Snell has been following this legislation, and she joins me now. Hi, Kelsey.

KELSEY SNELL, BYLINE: Hi there.

FADEL: OK, so what exactly is in this bill?

SNELL: So the biggest items include nearly $370 billion for energy security and climate change programs over the next 10 years. There's also $65 billion to extend elements of the Affordable Care Act through 2025. They're pairing all of that with more than $300 billion in deficit reduction. Now, that deficit reduction is really critical here because it is the key to getting Manchin on board after he blocked many other proposals over what he said were fears that more federal spending could stoke already-record-breaking inflation in the country.

FADEL: So how do they plan to cut the deficit?

SNELL: Well, primarily, it's through a 15% corporate minimum tax that they say would raise about $313 billion. Plus, there's expanded IRS enforcement and tax changes for carried interest. That's all in addition to already-announced plans to allow Medicare to negotiate the cost of prescription drugs. Now, all of this is a really big shift for Democrats. They were forced to dramatically scale back their ambitions to focus on only the Affordable Care Act and lowering prescription drug prices after they spent all of that time trying to get a more ambitious deal.

FADEL: Yeah.

SNELL: You know, this is really a far cry from that trillions of dollars they once hoped to spend, and that included child care and education. But what they did end up with here is much more than most Democrats expected.

FADEL: And these talks - they started. They fell apart. They restarted so many times. What made things different this time?

SNELL: Well, there are a lot of competing pressures on Manchin and Schumer. Yeah, there are pressures from Democrats, but there are also pressures from Republicans who tried to derail any last-ditch moves like this. The agreement was made public just a few hours after the Senate passed a critical semiconductor bill yesterday. And Republicans had promised to block that bill as long as Democrats were still trying to pass a different, broader partisan bill, like this one on climate and taxes. Well, the semiconductor bill is done in the Senate, and Republicans just don't have as much leverage over Democrats to kind of force them in a direction, so they decided to move forward. And Democrats are also entering a really critical period for themselves in terms of midterm politics.

FADEL: Right.

SNELL: The upcoming August recess is all about campaigning and making the pitch to voters that Democrats not only need to stay in power; they need to gain seats. So fresh achievements are sometimes kind of the easiest ways to sell voters on those kinds of, you know, progress. That's why they want to vote on this next week. They want to be able to show that they got this done and then promise to voters that this bill is just a down payment on bigger plans.

FADEL: How realistic is it, though, that this might pass?

SNELL: Well, it's certainly their goal. The next step is to go through the vetting process to make sure that this fits strict budget reconciliation rules so they can pass this without a Republican filibuster. Then, there's a lengthy voting process and making sure that they don't have other delays, like members testing positive for COVID, and then it has to pass the House. But President Biden is already on board, and that puts a lot of pressure on Democrats to get in line.

FADEL: So Kelsey, we mentioned this bill needs unanimous support among Democrats in the Senate. Are there any signs of trouble among Democrats right now?

SNELL: Well, I'm kind of watching a couple of separate political dynamics at play. Over in the Senate, the one thing to watch is Senator Kyrsten Sinema of Arizona. She hasn't said yet if she supports this bill, and she has, in the past, been skeptical of some of the changes they're talking about here on the tax side. Now, if it can get past the Senate, then we start to pay attention to what's happening in the House, where progressives who wanted a far bigger deal are a big question mark here. So are House Democrats who wanted bigger deductions for state and local taxes. I will say, though, that the progressives put out a statement yesterday saying that they're still evaluating the bill, but they did call it promising. And the others - the ones who want those state and local tax deductions - have left themselves room to get on board. They kind of need to when all of the leadership of their party is pushing them to do so.

FADEL: NPR's Kelsey Snell. Thank you.

SNELL: Thanks for having me.

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