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Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) announced late on 27 July an agreement on a budget reconciliation bill (the Inflation Reduction Act of 2022).  According to fact sheets distributed by Senate Democrats, the legislation includes revenue and spending offsets of $739 billion over 10 years by increasing taxes paid by businesses and individuals and by producing savings from changes in federal prescription drug pricing policies. The legislation includes $433 billion in spending and tax incentives on energy and climate change provisions and a continuation of expanded Affordable Care Act health care benefits, and the remaining roughly $300 billion would be devoted to deficit reduction. 

The tax increase provisions include a proposed 15% book minimum tax on corporations with profits over $1 billion (effective for tax years beginning after December 31, 2022), and a proposed change in the tax treatment of "carried interest" (effective for tax years beginning after December 31, 2022). The agreement also would provide for an $80 billion increase in IRS tax enforcement funding.  The legislation does not include any changes to the cap on the federal individual itemized deduction for state and local taxes.

Majority Leader Schumer announced in a July 27 statement that the text of the proposed legislation would be submitted to the Senate parliamentarian for a review to ensure that bill text complies with Senate budget reconciliation rules, and that he expects that the Senate “will vote on this transformative legislation next week.” The Senate currently is scheduled to begin its August recess at the end of next week; the House is scheduled to begin its recess at the end of this week.