Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) announced Wednesday they had reached a deal on a climate package that Democrats will seek to enact next week on a party-line reconciliation vote.

President Biden signed on immediately, saying the $670 billion Inflation Reduction Act, as dubbed by Manchin, would provide tax credits to promote clean energy in addition to reducing the costs of health insurance and prescription drugs.

“This afternoon, I spoke with Sens. Schumer and Manchin and offered my support for the agreement they have reached on a bill to fight inflation and lower costs for American families,” Biden said in a statement. “We will improve our energy security and tackle the climate crisis — by providing tax credits and investments for energy projects. This will create thousands of new jobs and help lower energy costs in the future.”

“After many months of negotiations, we have finalized legislative text that will invest approximately $300 billion in deficit reduction and $369.75 billion in energy security and climate change programs over the next 10 years,” Schumer and Manchin said in a joint statement. “The investments will be fully paid for by closing tax loopholes on wealthy individuals and corporations.”

It is expected to be added to legislation to lower prescription drug prices and extend expiring health care subsidies. Senate Democrats hope to vote on the deal next week under budget reconciliation rules that would sidestep a Republican filibuster.

The announcement was a boost to weary Democrats, coming weeks after Manchin seemed to kill the last chance for climate legislation due to his alarm over inflation. Although it is far from the over $3 trillion in spending Democrats had sought earlier, its passage would give the party’s candidates an accomplishment as they head into the midterm elections in November. (See Biden: ‘I Will not Back Down’ on Climate Action.)

Manchin said the plan “will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game.”

“As the superpower of the world, it is vital we not undermine our superpower status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load,” he said in a statement. “Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination.”

The bill “ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country,” Manchin continued. And it “invests in the technologies needed for all fuel types — from hydrogen, nuclear, renewables, fossil fuels and energy storage — to be produced and used in the cleanest way possible. It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels. It invests heavily in technologies to help us reduce our domestic methane and carbon emissions and also helps decarbonize around the world as we displace dirtier products.”

Reaction

“The entire clean energy industry just breathed an enormous sigh of relief,” said Heather Zichal, CEO of the American Clean Power Association. “This is an 11th-hour reprieve for climate action and clean energy jobs.

“Congress now is inches away from passing a $369.75 billion investment in energy security and climate change programs over the next 10 years. … Passing this bill sends a message to the world that America is leading on climate and sends a message at home that we will create more great jobs for Americans in this industry.”

Abigail Ross Hopper, CEO of the Solar Energy Industries Association, hailed the deal as “a major opportunity to relieve the inflation pinch on families and tackle the climate crisis” and called on Congress to “seal the deal and pass this legislation.”

“With long-term incentives for clean energy deployment and manufacturing, the solar and storage industry is ready to create hundreds of thousands of new jobs and get to work building out the next era of American energy leadership,” Hopper said.

Gregory Wetstone, CEO of the American Council on Renewable Energy, said he is “hopeful that the provisions in the budget reconciliation deal … will spur critical investments in renewable power, energy storage and advanced grid technologies.”

“Legislation that finally moves the country beyond years of on-again, off-again renewable tax credits and establishes a long-term, full-value clean energy tax platform will help provide renewable companies with the stability they need to do business,” Wetstone said.