A deal has been reached with Senate Majority Leader Chuck Schumer to increase taxes on the wealthy and invest in climate and health care, according to Sen. Joe Manchin.

The agreement, now dubbed the Inflation Reduction Act, has the blessing of the White House and saves a lot of the Democratic domestic policy agenda from being thrown away.

The 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.

The deal took official Washington by surprise as Manchin was at home in West Virginia recovering from COVID-19 and Democrats seemed set to accept a smaller health-care focused offer from Manchin. Republicans were angry over the deal's timing while Democrats were confused.

Democrats are racing to pass the measure before the Senate leaves town for its annual monthlong recess in order to stave off health insurance premium increases. House Democrats will return from their August recess to vote on a reconciliation bill.

The broad strokes of the agreement were outlined by Schumer and Manchin.

The proposal would raise $740 billion by instituting a 15% minimum corporate tax rate, beefing up the IRS's enforcement of tax laws on the ultra-wealthy, and narrowing the carried interest loophole, which allows hedge fund managers and other wealthy investors to pay lower taxes.

Democrats say it will be possible to cut carbon emissions in the United States by 40% before the end of the century by spending $369 billion on energy security and climate change. Manchin's priority is to reduce the deficit.

Out-of-pocket expenses for Medicare patients would be capped at $2,000 per year.

It is not certain that the bill will pass. Sinema said she needs to look at the text before making a decision. A group of House Democrats from New York and New Jersey have said they won't support any deal that doesn't restore the federal tax deduction for paying state and local income taxes

Manchin said in his statement that the tax code should not favor red state or blue state elites with loopholes.

The congressman who leads the group demanding the restoration of SALT was non-committal Wednesday night.

The impact it has on families in his district is something he needs to comprehend. It is hard to know until I see specific details.

Democrats will use a legislative maneuver called reconciliation to pass the bill through the Senate because Republicans are expected to line up against it. Four of the 220 members of the House are Democrats.

John Cornyn said that Biden's plan will be devastating to American families and small businesses.

The plan will be opposed by the U.S. Chamber of Commerce and other businesses.

Tuition-free community college, subsidies for child care and an expanded monthly child tax credit are not included in the legislation.

Democrats are likely to vote for the deal because of Biden's low approval ratings and inflation.

The American people have been waiting for this to happen. Biden said in a statement that the proposal addressed the problems of high health care costs and inflation as well as investments in energy security for the future.

The agreement is a win for the US. The minimum corporate tax rate is a priority for the Treasury Secretary, who negotiated a global deal to limit the power of international tax havens.

As it negotiates global deals to limit carbon emissions, the United States should gain credibility.

The environmental groups have been suspicious of Manchin because of his ties to the coal industry.

"We look forward to reviewing the bill in detail to assess whether it lives up to President Biden's commitments on climate and environmental justice" Significant federal clean energy investments are needed to meet our international climate commitments.

The Democratic caucus was briefed on the agreement by Schumer on Wednesday night.

By far, the biggest climate action in human history will be reported by me. Tax incentives, grants, and other investments in clean energy, clean transportation, energy storage, and climate-smart agriculture make this a real climate bill. The planet is burning. Reductions of emissions are the most important thing. This is a huge step forward. Let's make it happen.

Manchin took credit for killing parts of the Democratic agenda in his statement.

The reconciliation debate in Washington has been defined by how it can help advance Democrats' political agenda called build back better. We have the chance to make our country stronger by coming together.

Manchin said he would continue to negotiate on a broader package, according to his aide.

Manchin said he wasn't walking away from the table and understood the importance of the negotiations. The announcement is not a change of anything.

The Senate passed a bill to subsidize U.S.-made Semiconductor chips just hours before the announcement of the deal.

McConnell had threatened to deny GOP votes for the bill if Democrats did not back down from their tax and climate plan.

After Manchin said he would only accept a smaller package, McConnell's threat seemed pointless. The legislation was passed by the Senate this afternoon.

Manchin said he was on board with the package.

The report was contributed byAmanda Terkel.

The article was first published on HuffPost.