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Democrats Outsmart Mitch McConnell With Surprise Reconciliation Deal

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WASHINGTON — Senate Minority Leader Mitch McConnell (R-Ky.) said last month that he wouldn’t allow the Senate to pass a bipartisan bill on computer chips if Democrats tried to revive their “Construct Back Higher” agenda.

On Wednesday, the Senate approved the bipartisan tech manufacturing bill, and hours later Democrats announced a breakthrough on their big domestic policy laws.

In other words, McConnell’s gambit failed.

Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) announced they’d agreed on the brand new bill Wednesday after Manchin had refused to support Construct Back Higher last 12 months.

It was a big breakthrough for Democrats, who’ve been frustrated that it appeared like the majority of President Joe Biden’s domestic agenda was doomed. Though the brand new deal isn’t nearly as large because the initial Construct Back Higher laws, it might still provide tons of of billions of dollars for a few of the party’s long-sought priorities.

The laws, called the “Inflation Reduction Act,” consists of a handful of Construct Back Higher provisions that Manchin liked: It could require Medicare to pry lower prescription prices from drugmakers, impose a minimum tax on corporations and boost tax revenue through an investment in Internal Revenue Service enforcement.

Crucially, for Manchin, the bill would scale back the federal budget deficit $300 billion. Democrats had previously wanted to make use of every penny of increased tax revenue for brand spanking new social spending but have given up on winning Manchin over. Manchin has said that shrinking the deficit could help with inflation; former Treasury Secretary Lawrence Summers also reportedly told Manchin this week that the opposite provisions within the measure aren’t inflationary.

“Construct Back Higher is dead, and as a substitute we now have the chance to make our country stronger by bringing Americans together,” Manchin said in a lengthy statement.

Schumer said the Senate could vote on the brand new bill as soon as next week, as long as the Senate parliamentarian says the bill’s components pass muster under the Senate’s special “budget reconciliation,” which might allow laws to pass the Senate with only 50 votes as a substitute of the standard 60 needed to avoid a filibuster.

McConnell had said in June that “there will likely be no bipartisan [chips bill] so long as Democrats are pursuing a partisan reconciliation bill.”

The statement seemed designed to forestall Republicans from supporting the chips bill — which plows $50 billion into the domestic semiconductor industry — and to scare Manchin away from reconciliation.

Last week, Manchin warned his colleagues that he would never support latest spending or taxes amid high inflation, and talks between him and Schumer had reportedly broken down. Meanwhile, a slimmed-down chips bill chugged along through a series of procedural votes and cleared the Senate on Wednesday by a vote of 64 to 33, with 17 Republicans in support, including McConnell.

Then, after it passed, Manchin announced the breakthrough on reconciliation. The brand new bill still has an extended approach to go, because it’s unclear if it’s going to win the needed support from Senate and House Democrats, though Manchin had been the biggest obstacle.

McConnell doesn’t seem pleased.

“Democrats have already crushed American families with historic inflation,” McConnell said in a Thursday evening tweet. “Now they need to pile on giant tax hikes that may hammer staff and kill many 1000’s of American jobs.”

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