U.S. Senate Majority Leader Chuck Schumer (D-NY) holds his weekly news conference after the Democratic caucus luncheon at the U.S. Capitol in Washington, August 2, 2022.
Jonathan Ernst | Reuters
The $430 billion climate change, health care and tax bill passed the US Senate on Saturday provides a major victory for Democrats and will help reduce climate-caused carbon emissions. climate change while cutting costs for the elderly.
Democrats hope the bill, which they passed in the Senate against the United Republican opposition, will boost their chances in the November 8 midterm elections, when Republicans A tie takes precedence to regain a majority in at least one chamber of the National Assembly.
The package, called the Inflation Reduction Act, is a significantly scaled-down version of an earlier bill backed by Democratic President Joe Biden that was blocked by Senate Democrats Joe Manchin and Kyrsten Sinema because too expensive.
“That’s what the American people want,” Senate Majority Leader Chuck Schumer told reporters. “We prioritize the middle class, the working families who are struggling to reach the middle class, instead of what Republicans do: prioritize those at the top.”
The partisan 51-50 vote in the Senate, with a breakthrough vote coming from Vice President Kamala Harris, will send the legislation to the Democratic-controlled House, which is expected to pass it on Wednesday. Six, then Biden can sign into law.
Republicans see the bill as a “wish list” for spending that they say would harm an economy weighed down by inflation, saying it would kill jobs, increase energy costs and undermine growth at a time when the economy is facing a potential recession.
“Senate Democrats are misinterpreting the anger of the American people as a mandate for another reckless tax and spending race,” top Senate Republican Mitch McConnell said. know Saturday. “Democrats want to pass hundreds of billions of dollars in tax increases and hundreds of billions of dollars in reckless spending – and for what?”
About half of Americans – about 49% – support the bill, including 69% of Democrats and 34% of Republicans, according to a Reuters/Ipsos poll conducted on 3 and 4. August. The most popular element of the bill is for Medicare. power to negotiate drug prices, which 71% of respondents support, including 68% of Republicans.
Economists, who say the law could help the Federal Reserve fight inflation, do not expect to have a major impact on the economy in the coming months.
Climate focus
With $370 billion in climate-focused spending, it would become the most consequential climate change bill ever passed by Congress.
The bill that gives businesses and families billions of dong in incentives to encourage the purchase of electric vehicles and energy-efficient appliances, as well as spur new investments in wind and solar energy will double the amount of new, clean electricity generation capacity coming online in the US by 2024, modeled after the Iteration Project at Princeton University.
That would help the United States meet its pledge to cut greenhouse gas emissions in half by 2030 below 2005 levels, made at last year’s Glasgow climate summit.
While environmental groups largely accepted the bill, they noted that the compromises secured by Manchin, who represents coal-producing West Virginia, would prolong US use of fossil fuels.
Those provisions include rules that only allow the federal government to authorize new wind and solar energy development on federal land when it is also auctioning off oil and natural gas rights.
Drug costs
Juliette Cubanski, deputy director of Medicare programs at the Kaiser Family Foundation, said the law would reduce drug costs for governments, employers and patients.
“Probably the biggest impact will be on people with prescription drug coverage through Medicare,” she said.
One important change is a provision that allows the federal Medicare health program for older and disabled Americans to negotiate lower prescription drug prices.
The pharmaceutical industry says price negotiations will stifle innovation. Negotiated prices for the 10 most expensive Medicare drugs will apply starting in 2026, with that number going up until reaching 20 a year in 2029.
The nonpartisan Congressional Budget Office estimates Medicare will save $101.8 billion over 10 years by negotiating drug prices.
The provision also places an annual $2,000 limit on out-of-pocket expenses for seniors through Medicare.
Tax Terms
The bill also imposes a new excise tax on share buybacks, a late change after Sinema raised an objection over another provision that could impose a new tax on capital gains. concession, which is currently a tax loophole for hedge funds and private equity backers. The provision has been eliminated.
Lawmakers say the excise tax is expected to add $70 billion in tax revenue each year. That is more than the net profit provision is forecast to increase.
A nonpartisan Congressional Budget Office report released ahead of that last change estimated the measure would reduce the federal deficit by a net $101.5 billion over the next decade.
That’s about a third of the $300 billion deficit reduction predicted by Senate Democrats, but excluded a projected $204 billion revenue increase from increased Internal Revenue Service enforcement.
