NewYou can listen to Fox News stories now!

After more than a year of “Build Back Better” negotiations, Senate Majority Leader Chuck Schumer and Sen. Joe Manchin on Wednesday announced a deal on the most scaled-back reconciliation package.

At a cost of $433 billion, the package spends less than a sixth of the roughly $3 trillion behemoth bill Democrats were debating this time last year. It has few provisions, but, according to Democrats, it would raise $739 billion in tax revenue.

“The Inflation Reduction Act of 2022 makes a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by nearly 40% by 2030,” Schumer, DN.Y. and Manchin, DW.Va., said in a joint statement Wednesday using the bill’s new official name.

“The bill will finally allow Medicare to negotiate for prescription drugs and lower health care costs for millions of Americans,” they added.

Manchin, Schumer agree to a largely pared-back version of Build Back Better

Due to the huge tax hike the bill would impose, Sena.  Joe Manchin previously refused to support the bill.

Due to the huge tax hike the bill would impose, Sena. Joe Manchin previously refused to support the bill.
(Jim Lo Scalzo/EPA/Bloomberg via Getty Images)

Democrats previously agreed to provisions in the bill that extend parts of the Affordable Care Act (ACA), also known as Obamacare, and aim to lower prescription drug prices.

According to a summary of the bill published Wednesday, the deal would extend the ACA through 2025 and allow Medicare to negotiate prescription drug prices. The ACA extension would cost $64 billion, Democrats say, and prescription drug reform would save the government $288 billion.

Senate Majority Leader Chuck Schumer renamed the bill the "Inflation Reduction Act of 2022."

Senate Majority Leader Chuck Schumer renamed the bill the “Inflation Reduction Act of 2022.”
(AP Photo/J. Scott Applewhite)

Where Democrats have previously been deadlocked — until Wednesday — are on tax, energy and climate regulations. Manchin, who hails from an energy-producing state, has often clashed with his own party on climate policy. Further, with his vocal concerns about inflation and the economy, the right-wing senator has repeatedly said that any economic policies enacted by Congress must be cautious to do no harm.

House Republicans Move to Reject China Competition Bill After Manchin, Schumer Agree to Reconciliation Deal

But according to the bill summary, the Manchin-Schumer package would spend a combined $369 billion on energy and climate efforts. And it includes a 15% corporate minimum tax for businesses valued at more than $1 billion, which is estimated to raise $313 billion; Step-up IRS tax enforcement, expected to raise $124 billion; And it closes an interest loophole estimated to raise $14 billion.

In addition to railing against increased taxes, Republicans are likely to criticize many of the bill’s clean energy and environmental provisions. That includes about $1.9 billion for the “Neighborhood Access and Equity Grant Program.” That money would be available to communities that don’t help remediate areas with “gaps in tree canopy coverage,” among other things.

The deal was announced the same day the CHIPS bill passed the Senate with large bipartisan support — a deal that would have killed Democrats' reconciliation bill.

The deal was announced the same day the CHIPS bill passed the Senate with large bipartisan support — a deal that would have killed Democrats’ reconciliation bill.
(AP)

Another provision in the bill “provides $1.5 billion for tree planting and related activities, with priority given to projects that benefit underserved populations and regions.”

Another part of the bill provides $403 million for IRS expenses, “including the purchase and rental of passenger motor vehicles.”

Click here to get the Fox News app

In a recession, Democrats are raising taxes, killing jobs, slashing savings and suffocating American energy,” GOP Sen. John Barrasso, R-Wyo., said of the bill. “Additionally, they Supersizing the IRS To attack working families and small businesses. Their tax plan also includes electric vehicle tax breaks and Obamacare subsidies for people making more than $100,000.”

Barrasso added: “This reckless tax and spending extravaganza will cause working families even higher prices, more tax hikes and more pain than they are already experiencing.”

Fox News’ Rachel Pike contributed to this report.