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AED Alert: Schumer, Manchin Announce Agreement on Reconciliation Package

Yesterday evening, a surprise deal was reached between Senate Majority Leader Chuck Schumer (D-N.Y.) and Senator Joe Manchin (D-W. Va.) on a broad reconciliation package, which was previously known as the “Build Back Better Act.”

Now called the “Inflation Reduction Act of 2022”, the $739 billion bill (far less than the $5 trillion plus proposals discussed the past two years) focuses on health care (Obamacare subsidies & Medicare prescription drug pricing reforms), climate change programs (clean energy incentives and grants totaling $369 billion over ten years), deficit reduction ($300 billion over ten years) and tax changes.

However, the tax code modifications are not nearly as onerous as previously proposed, as they are limited to a corporate alternative minimum tax (AMT) of 15 percent on adjusted financial statement income for corporations with profits in excess of $1 billion and elimination of the so-called “carried interest loophole.” Additionally, there is increased funding for IRS enforcement ($80 billion over ten years).

AED battled against tax increases on the nation’s family-owned companies and job creators, and it appears that effort has largely succeeded.

While there is an agreement between Schumer and Manchin, there are still obstacles to final passage. Every member of the Senate Democratic caucus must support the package, as the GOP is united in opposition. Similarly, in the House, Democrats can only lose three votes. Additionally, the bill must still overcome scrutiny by the Senate parliamentarian. Democrats hope to have the Inflation Reduction Act of 2022 to the president’s desk for his signature before the end of August.

Stay tuned to AED for further updates at the proposal moves through the legislative process.

Legislative Text

Summaries

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