Washington – More than a year after President Biden unveiled his sweeping domestic spending plan, the Senate on Sunday approved a narrower $740 billion package which aims to tackle healthcare costs, tax big corporations and make historic investments in the fight against climate change.
The plan, called the Inflation Reduction Act, passed the upper house along party lines, with Vice President Kamala Harris casting the tie-breaking vote. Democrats used a legislative process called budget reconciliation to pass the measure amid unanimous opposition from Republicans.
The House is set to return to Washington briefly from its summer break on Friday to take up the package, and is expected to send the bill to Mr. Biden’s desk for his signature.
The 50-50 Senate passage of the legislation ended a months-long fight over the president’s domestic policy priorities, with negotiations underway. fit in and start like Senator Joe Manchin, a moderate Democrat from West Virginia, expressed concerns on new federal spending amid rising consumer prices.
But a breakthrough emerged late last month with a surprise deal between Manchin and Senate Majority Leader Chuck Schumer, with Democrats poised for a key victory as they battle to retain control of Congress in the November half term.
Here’s the new health, tax and energy care package:
Climate and energy
On Sunday, Schumer touted the plan as the “boldest climate package in American history.”
“This bill will usher in the era of affordable clean energy in America,” he said in remarks on the Senate floor. “It’s a game changer, it’s a turning point and it’s been a long time coming.”
The legislation invests nearly $400 billion in energy security and climate change proposals and would help reduce carbon emissions by about 40 percent by 2030, Democrats said in a summary of provisions.
To incentivize consumers to buy technologies to reduce emissions and energy prices, the bill includes $9 billion in home energy rebate programs, a $4,000 tax credit for buying used electric vehicles and a credit tax of $7,500 to purchase clean new vehicles, both available only to low- and moderate-income earners.
The energy section of the bill invests $30 billion in production tax credits to accelerate American production of solar panels, wind turbines, mixers and processing of critical minerals; $10 billion in tax credits to build clean technology manufacturing facilities, such as those that make electric vehicles and solar panels; and $500 million through the Defense Production Act for heat pumps and critical minerals processing.
For rural communities, the plan invests more than $20 billion for “climate-smart agriculture practices,” grants for fire-resistant forests, forest conservation and urban tree planting, and $2.6 billion in subsidies for the conservation and restoration of coastal habitats.
It also imposes a charge of up to $1,500 per metric ton on oil and gas companies for methane emissions and reinstates oil and gas lease sales in the Gulf of Mexico and Alaska.
Tax revenues
democrats tax revenue proposal has two components: a minimum corporate tax of 15% imposed on most corporations earning more than $1 billion each year, and nearly $80 billion for stricter tax enforcement and compliance for part of the Internal Revenue Service.
Improved tax resources will bring in an additional $204 billion in revenue over a decade, according to the Congressional Budget Office.
The Democrats’ package will reduce federal budget deficits by $102 billion over 10 years, the agency found, an estimate that did not take into account new revenue from strengthening IRS enforcement.
The corporate tax provision was a point of contention as senators neared a final vote on Sunday. Seven Democrats joined all Republicans in passing an amendment introduced by Republican Sen. John Thune of South Dakota that exempts some private equity-backed companies from the 15 percent minimum corporate tax rate.
Health care
The new legislation includes a policy that allows Medicare to negotiate the price of prescription drugs starting in 2023, a Democratic priority expected to save hundreds of billions of dollars over the next 10 years. It also places a $2,000 annual limit on out-of-pocket costs for Medicare patients enrolled in drug plans.
For Medicare enrollees, the price of insulin is also capped at $35 per month. Democrats tried to waive the reconciliation rules and keep a provision that would have done so limits the price of insulin to $35 a month for those covered by private health care plans, but Republicans blocked the proposal.
Under the Democrats’ proposal, the Affordable Care Act’s enhanced subsidies would also be extended through 2025. The premium subsidies were included in the $1.9 trillion COVID-19 relief package dollars enacted last year and were due to expire at the end of the year.
