House PASSES $370 billion Inflation Reduction Act

BREAKING NEWS: House PASSES $370 billion Inflation Reduction Act: Democrats celebrate as climate and health care bill Republicans say will lead to more taxes and IRS audits goes to Biden’s desk

  • The House of Representatives passed President Joe Biden ‘s sweeping $370 billion Inflation Reduction Act Friday 
  • The legislation reduces the price of prescription drugs and health insurance and includes a number of green energy initiatives 
  • It installs a 15 percent minimum tax rate on corporations, raising enough funds to also pay down the deficit 
  • House Republicans rejected the measure en masse, arguing that it will raise taxes on the middle class
  • They’ve also complained about money going toward hirings at the Internal Revenue Service, suggesting more average Americans will be audited 
  • The Treasury Department said audits for those earning less than $400,000 are not expected to spike 
  • The bill’s passage will give Biden and Democrats some much-needed momentum going into the fall midterm campaign season 

The House of Representatives passed President Joe Biden‘s sweeping $370 billion Inflation Reduction Act Friday. 

When the count bypassed 218 votes – meaning passage – applause broke out on the House floor. 

The vote was along party lines, with Democrats for and Republicans opposed. 

The legislation – which passed the Senate with only Democratic votes on Sunday – reduces the price of prescription drugs and health insurance and includes a number of green energy initiatives, two major pillars of Biden’s original Build Back Better plan. 

It installs a 15 percent minimum tax rate on corporations, raising enough funds to also pay down the deficit.  

‘And today, today is really a glorious day for us. We send to the president’s desk a monumental bill that will, will be truly for the people, the Inflation Reduction Act,’ House Speaker Nancy Pelosi said during her Friday morning press conference.

Pelosi commended Senate Majority Leader Chuck Schumer for ushering the package through the Senate. ‘Sadly, for all the good that it does, without one Republican vote,’ the Democratic leader pointed out. 

House Minority Leader Kevin McCarthy used his privilege as party leader to take as much floor time as he wanted. 

His Friday afternoon speech went 50 minutes. 

McCarthy knocked the Democrats for not explicitly tackling high gas and food prices, and for voting by proxy – which members of both parties have utilized throughout the COVID-19 pandemic. 

‘Madam Speaker, mark my words, long after the headlines this week fade, we’ll look back on this very day and on this bill, as the one that broke the camel’s back,’ McCarthy said. 

He hammered one unnamed Democratic lawmaker for skipping the Friday afternoon vote to attend a wedding in France – and said others were at their vacation homes. 

House Minority Leader Kevin McCarthy used his privilege as party leader to take as much floor time as he wanted. McCarthy knocked the Democrats for not explicitly tackling high gas and food prices, and for voting by proxy

House Minority Leader Kevin McCarthy used his privilege as party leader to take as much floor time as he wanted. McCarthy knocked the Democrats for not explicitly tackling high gas and food prices, and for voting by proxy 

When it was Pelosi's turn to give the final word, she promised to be brief as it neared 5 p.m.

When it was Pelosi’s turn to give the final word, she promised to be brief as it neared 5 p.m.

‘What a disgrace, what a disgrace,’ he said, claiming Democrats were raising taxes, while absentee voting. 

McCarthy also went after a provision in the legislation that adds $80 billion in funding to the IRS, suggesting it meant that everyday Americans would be audited – something the administration has countered. 

‘This is just a trainwreck waiting to happen,’ the California Republican said. ‘And with this new power, the IRS will snoop around in your bank account, your Venmo, your small buinsess, then the government will shake you down for every last penny.’ 

‘In light of this week’s events, let me ask you can you really trust this administration?’ McCarthy said, referencing the FBI raid on former President Donald Trump’s Mar-a-Lago property. ‘I’ve watched Democrats weaponize the government before.’ 

When it was Pelosi’s turn to give the final word, she promised to be brief as it neared 5 p.m. 

‘The hour is growing late as a courtesy to my colleagues I intend to shorten my remarks,’ she said. 

The bill’s passage gives Biden and Democrats some much-needed momentum going into the fall midterm campaign season.  

Historically, the president’s party loses seats in Congress during the leader’s first midterm in office.

Biden has also been plagued by low poll numbers for months, as he’s had to deal with a series of crises, from the COVID-19 pandemic, to 40-year high inflation, to a baby formula shortage and also the war in Ukraine. His administration also oversaw a messy pull-out from Afghanistan a year ago. 

On the legislative front, however, Biden has presided over a number of successes. 

Last year, Congress passed a massive COVID relief bill and then the bipartisan infrastructure package.

However in December, the Build Back Better bill, which was supposed to be a follow-up to the COVID relief bill and contained healthcare, childcare and climate change provisions, looked dead in the water after moderate Democratic Sen. Joe Manchin refused to sign on. 

But late last month, Manchin and Senate Majority Leader Chuck Schumer announced they had come to a deal and rolled out the Inflation Reduction Act.  

The announcement sent shockwaves throughout Washington, as the Democrats have seldom been able to outmaneuver Senate Minority Leader Mitch McConnell.

McConnell had vowed to derail the bipartisan CHIPS bill, which bolsters the U.S. semiconductor industry to compete against China, if a reconciliation bill was back on the table. 

Within hours of the Senate passing the CHIPS Act, Manchin and Schumer made their move. 

On Sunday, after a marathon 27-hour session, Senate Democrats passed the Inflation Reduction Act, using the reconciliation process, meaning they could bypass a Republican filibuster threat and pass the bill on a party-line vote.  

It’s unclear when Biden will sign the bill. 

He is on a family vacation on Kiawah Island in South Carolina. 

Earlier this week White House press secretary Karine Jean-Pierre was asked for details about when the president might sign the legislation and said she had no plans yet to share. 

‘We are grateful for what the Senate was able to do just a couple of days ago. And we are looking forward to the House passing it so that we can deliver for the American people,’ she said.

The White House sent chocolate chip cookies up to Capitol Hill in advance of the vote as a thank you to House Democrats, Fox News reported.   

WHAT’S IN THE INFLATION REDUCTION ACT?

LOWER PRESCRIPTION DRUG COSTS

Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.

Those new revenues would be put back into lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.

The money 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 dose. A provision to extend that price cap on insulin to Americans with private health insurances was out of line with Senate budget rules and Republicans stripped it from the final bill.

HELP PAY FOR 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 people who are purchasing their own health care policies.

‘SINGLE BIGGEST INVESTMENT IN CLIMATE CHANGE IN U.S. HISTORY’

The bill would invest nearly $375 billion over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles.

It’s broken down to include $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.

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.

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.

For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. There are tax breaks for buying electric vehicles, including a $4,000 tax credit for purchase of used electric vehicles and $7,500 for new ones.

In all, Democrats believe the strategy could put the country on a path to cut greenhouse gas emissions 40% by 2030, and ‘would represent the single biggest climate investment in U.S. history, by far.’ 

 HOW TO PAY FOR ALL OF THIS? 

The biggest revenue-raiser 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 U.S. 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.

The revenue would have been higher, but Sinema insisted on one change to the 15% corporate minimum, allowing a depreciation deduction used by manufacturing industries. That shaves about $55 billion off the total revenue.

To win over Sinema, Democrats dropped plans to close a tax loophole long enjoyed by wealthier Americans — so-called carried interest, which under current law taxes wealthy hedge fund managers and others at a 20% rate.

The left has for years sought to boost the carried interest tax rate, hiked to 37% in the original bill, more in line with upper-income earners. Sinema wouldn’t allow it.

Keeping the tax break for the wealthy deprives the party of $14 billion in revenue they were counting on to help pay for the package. 

EXTRA MONEY TO PAY DOWN DEFICITS

With some $740 billion in new revenue and around $440 billion in new investments, the bill promises to put the difference of about $300 billion toward deficit reduction.

Federal deficits spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation’s economy churned through shutdowns, closed offices and other massive changes.

The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which put out a new report this week on long-term projections.

 WHAT’S LEFT BEHIND?

This latest package emerged suddenly at the end of July after 18 months of start-stop negotiations leaves behind many of Biden’s more ambitious goals.

Senate Majority Leader Chuck Schumer, D-N.Y., struck a deal with Sen. Joe Manchin to revive Biden’s package, slimming it down to bring the West Virginia Democrat back to the negotiating table. Next, they drew Sinema, the remaining party holdout, with additional changes.

The package remains robust, by typical standards, but nowhere near the sweeping Build Back Better program Biden once envisioned.

While Congress did pass a $1 trillion bipartisan infrastructure bill for highways, broadband and other investments that Biden signed into law last year, the president’s and the party’s other key priorities have slipped away.

Among them is a continuation of a $300 monthly child tax credit that was sending money directly to families during the pandemic and is believed to have widely reduced child poverty.

Also gone, for now, are plans for free pre-kindergarten and community college, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs. ~Associated Press

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