Senate Democrats secured a key victory as they passed a package that would include provisions for climate, health care and corporate taxes on Sunday afternoon. Although it was not the $2.2 trillion Build Back Better act that President Joe Biden wanted, the Inflation Reduction Act continues comprehensive provisions that will promises to pay down the nation’s debt by more than $294 billion.
Additionally, the legislation will invest in clean energy initiatives that seeks to drive job growth while addressing climate change, extend expanded Affordable Care Act subsidies designed to curb rising health care costs, and lower prescription drug costs by allowing Medicare to negotiate drug prices.
The Inflation Reduction Act will inject at least $370 billion into climate and energy programs. It also invests almost $400 million over 10 years into climate programs such as electric vehicles and renewable energy. The legislation passed with no Republican support, which required Vice President Kamala Harris to cast the tie-breaking vote.
“It’s been a long, tough and winding road, but at last, at last we have arrived,” said Senate Majority Leader Chuck Schumer, D-New York.
“The Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century,” he continued.
The year-long fight Majority Leader Schumer had is representative of the diverging interests within the Democratic caucus. This bill would not have passed without the support from Senator Joe Manchin of West Virginia. Manchin was a staunch hold-out as President Biden pushed Build Back Better because it didn’t look out for states that are heavily reliant on coal mining.
The Inflation Reduction Act also includes $30 billion to increase the production of solar panels, wind turbines, batteries and critical minerals processing; $10 billion to build facilities to manufacture things like electric vehicles and solar panels; and $500 million through the Defense Production Act for heat pumps and key mineral processing.
Senators Jon Ossoff and Reverend Raphael Warnock secured major victories as well. The two major pieces of legislation that Senator Reverend Warnock introduced are included in The Inflation Reduction Act are bills to cap insulin costs at $35 a month for patients on Medicare, and his plan to cap the cost of prescription drugs for seniors at $2,000 a year.
“I’m thrilled we were finally able to pass this historic, once-in-a-generation investment in our country’s future that will lower costs for Georgians, create clean energy jobs and reduce the deficit all at the same time,” said Senator Reverend Raphael Warnock. “I’m especially proud that the legislation includes two provisions I introduced to cap insulin costs for Medicare patients at $35 a month, and to limit the cost of prescription drugs for seniors. This bill will strengthen health care access and lower health care costs for people across Georgia.”
The legislation also permits Medicare to negotiate drug prices, which, if this portion of the bill becomes federal law, would be the largest expansion of the Affordable Care Act, which is colloquially known as Obamacare.
“I’m not in love with politics, I’m in love with change—and this legislation will make real change in people’s lives. From saving seniors money by allowing Medicare to directly negotiate drug prices, to expanding vital health care subsidies, to greening the economy, this legislation will make a lasting impact on Georgians’ lives,” continued Senator Warnock.
“Today the Senate passed major legislation aimed at helping seniors afford prescriptions, building an energy-independent economy, cutting pollution, and reducing the deficit,” Ossoff said. “I’m pleased this bill included my Solar Energy Manufacturing for America Act to boost U.S. production of solar technology and help Georgia continue to grow as a high-tech manufacturing and renewable energy powerhouse.”
Meanwhile, the Democrats approved a new 15 percent corporate minimum tax on the profits companies report to shareholders, which has been characterized as a win for the private equity lobby. The new corporate tax will apply to companies that report more than $1 billion in annual income on their financial statements but that are also able to use credits, deductions and other tax treatments to lower their effective tax rates. This provision was shaped by Senator Kyrsten Sinema, D-Arizona.