Friday, on a straight party-line vote, the U.S. House of Representatives passed the Inflation Reduction Act (IRS), which cleared the Senate last Sunday. It now goes to President Joe Biden’s desk for his signature.
The bill makes a historic commitment to dealing with the impacts of climate change, as well as addresses rising health care costs, and shifts some of the tax burden from American workers to the wealthy and corporations.
“This bill is far from perfect. It’s a compromise. But it’s often how progress is made,” said Biden at the White House last month. “My message to Congress is this: This is the strongest bill you can pass.” The bill puts a cap of $2,000 on out-of-pocket prescription drug costs for people on Medicare, effective in 2025.
What’s In the Bill
In addition to capping prescription drug costs for seniors, there’s also a three-year extension on healthcare subsidies in the Affordable Care Act (ACA) originally passed in a pandemic relief bill last year. The government estimate that the ACA has kept premiums at $10 per month or lower for the vast majority of people covered through the federal health insurance exchange, helping millions of Americans avoid spikes in their health care costs.
The bill makes the largest investment in the history of our planet; investing $370 billion into clean energy and curbing climate change, the largest U.S. investment ever in U.S. history.
The provisions included in the bill could cut carbon emissions by 40 percent of 2005 levels by 2030. This is still short of the 50 percent laid out in Biden’s original plan, but it goes a long way toward meeting a goal that has been seen as out-of-reach for the past year.
The Inflation Reduction Act will provide new, significant resources to the U.S. Department of Agriculture to support environmentally-friendly farming and a meaningful impact on America’s rural and agricultural communities. There is funding to strengthen healthy forests and conservation, and build new clean-energy infrastructure,
The legislation creates a 15 percent minimum tax for corporations making $1 billion or more in income, projected to bring in more than $300 billion in revenue. The bill originally had a $14 billion revenue provision to plug the carried interest tax loophole used by the wealthy, but it was dropped as part of the give and take on this bill to get Arizona Senator Kyrsten Sinema on board
Featured image: A view of Capitol Hill from Pennsylvania Avenue. Photo by Jan Wondra.