Landmark Bill Goes to Biden: Here's What's in It

Among other things, it includes biggest ever investment in fighting climate change
By Newser Editors and Wire Services
Posted Aug 12, 2022 4:46 PM CDT
Landmark Bill Goes to Biden: Here's What's in It
The US Capitol in Washington.   (AP Photo/Mariam Zuhaib, File)

(Newser) – The House gave final passage on Friday to the biggest investment ever in the US to fight climate change. The bill heading to President Biden's desk also includes a hard-fought cap on out-of-pocket prescription drug costs for Medicare recipients and a new corporate minimum tax on big businesses. All told, the Democrats' "Inflation Reduction Act" may not do much to immediately tame inflationary price hikes, but the package will touch countless American lives with longtime party proposals. Republicans deride the 730-page bill as big-government overreach and point particular criticism at its $80 billion investment in the IRS to hire new employees and go after tax scofflaws. Here are key parts of the $740 billion package—made up of $440 billion in new spending and $300 billion toward easing deficits, per the AP:

  • Climate: The bill would infuse nearly $375 billion over the decade in climate change-fighting strategies that Democrats believe could put the country on a path to cut greenhouse gas emissions 40% by 2030. It represents the single biggest climate investment in US history.
  • EV tax breaks: For consumers, that means tax rebates to buy electric vehicles—$4,000 for used vehicle purchase and up to $7,500 for new ones, eligible to households with incomes of $300,000 or less for couples, or single people with income of $150,000 or less. Not all electric vehicles will fully qualify for the tax credits immediately, thanks to requirements that component parts be manufactured and assembled in the US. And pricier cars costing more than $55,000 and SUVs and trucks priced above $80,000 are excluded.
  • Other tax breaks: There's also tax breaks for consumers to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. For businesses, the bill has $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country's dependence on fossil fuels. The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.

  • Drilling: The bill would impose a new fee on excess methane emissions from oil and gas drilling while giving fossil fuel companies access to more leases on federal lands and waters.
  • Drought: A late addition pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada, and Colorado would designate $4 billion to combat a mega-drought in the West, including conservation efforts in the Colorado River Basin, which nearly 40 million Americans rely on for drinking water.
  • Prescription costs: The bill would allow the Medicare program to negotiate some prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window. The result is expected to lower costs for older adults on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies. The revenue raised would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document. Seniors would also have insulin prices capped at $35 a month.
  • Health insurance: The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own. Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for some 13 million people who are purchasing their own health care policies through the Affordable Care Act.

  • Paying for this: One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits. It's a way to clamp down on some 200 US companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all. The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade. There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade. Savings from allowing Medicare’s negotiations with the drug companies is expected to bring in $288 billion over 10 years, according to the non-partisan Congressional Budget Office.
(Read more House of Representatives stories.)

Get breaking news in your inbox.
What you need to know, as soon as we know it.
Sign up
We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X