Manchin says he has reached deal with Democrats on economy, climate bill

Under the deal, Manchin agreed to support roughly $433 billion in new investments, much of which is focused on climate change and energy production. In total, Democrats say their proposal — now known as the Inflation Reduction Act of 2022 — could lower energy costs, increase clean energy production and reduce carbon emissions roughly 40 percent by 2030.

Neither Schumer nor Manchin released the full details of the plan. But Manchin’s support for such spending still marked a dramatic reversal from only two weeks ago, when the moderate lawmaker from coal-heavy West Virginia said he could not support climate-related investments in any package moving through the chamber this month.

Behind the scenes, though, Schumer continued to advocate for climate spending with Manchin, whose objections were rooted in a belief that more federal spending would worsen inflation. The accord came in part because Schumer, House Speaker Nancy Pelosi (D-Calif.) and Biden agreed to seek and pass new legislation targeting permitting for pipelines and other infrastructure in the coming months, Manchin said.

The deal with Manchin also includes plans to lower healthcare costs for Americans, chiefly by allowing Medicare to begin negotiating the price of select prescription drugs on behalf of seniors. And party lawmakers agreed on a critical provision that essentially would spare about 13 million Americans from seeing insurance premium increases next year, by continuing subsidies for people who buy coverage on exchanges set up under the Affordable Care Act.

To pay for the package, Manchin and Schumer settled on a flurry of changes to tax law that would raise $739 billion over the next decade — enough to offset the cost of Democrats’ proposed spending while securing more than $300 billion for cutting the deficit. The funding comes from policies including a new minimum tax on corporations and new investments in the Internal Revenue Service that will help it pursue tax cheats.

Taken together, the package amounts to far more than Democrats thought they might win from Manchin, who repeatedly has raised fiscal concerns with his own party’s spending ambitions. But it still totals significantly less than the more sweeping, roughly $2 trillion overhaul to the country’s healthcare, education, climate, immigration and tax laws known as the Build Back Better Act — a package Manchin described in no uncertain terms as a relic of the past.

“For too long, the reconciliation debate in Washington has been defined by how it can help advance Democrats political agenda called Build Back Better,” Manchin said in a lengthy statement, referring to Democrats’ initial, larger spending package that bore Biden’s 2020 campaign slogan.

“Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together,” Manchin said.

This is a breaking news story. It will be updated.