Manchin’s resistance had long derailed broad legislation on the proposal’s issues.

Manchin,one of the most conservative Democrats in Congress,just last week said he would only agree to far more limited legislation curbing prescription drug costs and extending federal subsidies for healthcare costs.

He said he was open to considering a broader compromise on environment and tax issues after Congress returned from a summer recess in September,an offer that many Democrats thought dubious.

There was no immediate explanation why Manchin had suddenly agreed to the far broader package.

In December,his resistance derailed a wide-ranging $US3.5 trillion,10-year social and environment bill that was Biden’s top domestic priority.

In his statement,Manchin said the new measure “would dedicate hundreds of billions of dollars to deficit reduction by adopting a tax policy that protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.”

News of the agreement came hours after the Senate passed sweeping legislation to subsidise the domestic semiconductor chip industry with several Republican votes.

Last month,top Senate Republican Mitch McConnell promised to block the “Chips bill” as it is known,unless Democrats abandoned their plans for a reconciliation bill like the one Manchin and Schumer outlined. The House will vote on that bill on Thursday,but Republicans don’t have the votes to block it on their own.

Republicans were quick to criticise the move. “I can’t believe that Senator Manchin is agreeing to a massive tax increase in the name of climate change when our economy is in a recession,” Senator Lindsey Graham said.

McConnell also criticised the bill,saying it would “kill many thousands of American jobs”.

AP,Reuters

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