Sen. Schumer pitches spending deal to Democrats as ‘hugely important’ achievement — but pitfalls loom

Senate Majority Leader Chuck Schumer (D-N.Y.) rallied fellow senators behind his surprise spending deal on Thursday, calling the package a historic opportunity to enact longtime Democratic priorities.

Even as potential hurdles remain, the powerful Democratic leader trumpeted the 11th-hour deal with kingmaker Sen. Joe Manchin (D-W.V.) as the best chance to win spending to fight climate change and to allow Medicare to negotiate lower prescription drug prices.

“We now have the opportunity to get those two hugely important priorities passed,” Schumer told a hastily called Democratic Senate caucus meeting, sources said.

He candidly warned that the reconciliation agreement, which will need the votes of all 50 Democratic senators and almost all House Democrats, still faces a potentially tricky political road ahead.

“We will need to be disciplined in our messaging and focus,” Schumer said. “It will be hard. But I believe we can get this done.”

The $739 billion proposal, dubbed the Inflation Reduction Act, also extends subsidies for health insurance coverage, raises taxes on high earners and large corporations and reduces federal debt.

Although no Democrats have yet opposed the bill, some key lawmakers have not yet committed to supporting it, notably moderate Sen. Kyrsten Sinema (D-Ariz.)

The bill does not include restoring the full state and local tax (SALT) deduction that benefits high-tax blue states like New York and New Jersey.

Some New York-area lawmakers, including Rep. Tom Suozzi (D-N.Y.) and Rep. Josh Gottheimer (D-N.Y.) have vowed to oppose any reconciliation bill that did not include action on SALT.

But they remained silent after Manchin announced the surprise agreement late Wednesday.

Gottenheimer was reportedly gauging support from a small group of centrist Democrats for seeking to negotiate tweaks to the deal, including including the SALT provision and excluding some tax hikes.

[ NY wins easing of SALT tax cap and river of cash in spending deal ]

Democratic leaders are keen to avoid any haggling because changes could complicate keeping Manchin behind the bill or could drive a small group of progressives to dump the deal.

The broad plan is a far cry from the $3.5 trillion so-called Build Back Better package Biden asked Democrats to push through Congress last year.

Manchin got cold feet and shot down a much smaller measure that he himself helped negotiated after asserting it would fuel inflation and was loaded with budget gimmicks.

Democrats said the new proposal would raise $739 billion over the decade in new revenue, including $313 billion from a 15% corporate minimum tax.

The measure would spend $369 billion on energy and climate change initiatives, but would reduce the deficit by saving money on drug costs and by increasing IRS tax enforcement.

The deal came as a huge surprise because the mercurial Manchin had said he was walking away from talks earlier this month.