Dems Pass the Inflation Reduction Act

"This bill would be the most significant legislation in history to tackle the climate crisis and improve our energy security . . . it’ll give us a tool to meet the climate goals . . . by cutting emissions and accelerating clean energy . . .

"Experts -- even some experts who have criticized my administration in the past -- agree that this bill will reduce inflationary pressures on the economy." - President Joe Biden

The Dems’ Inflation Reduction Act (the “Act”) -- addressing major progress in climate change, healthcare savings, and tax fairness -- passed the Senate on August 7 and passed the House on August 12. President Biden will be signing this Act very soon!

The Act passed solely with Democratic Votes in both Senate and House:
In the Senate -- Democrats - 50 Yes votes. Republicans - 50 No votes. Vice President Harris broke the tie for the final result of 51 yes to 50 no.
In the House - Democrats 220 Yes votes. Republicans 207 No votes.

Knowing that Republican Senators would not vote for progress on climate change, healthcare, and tax fairness, the Dems wrote the Act to fit within the “reconciliation process” in the Senate. That allowed the bill to pass with a majority vote (50 + 1). Reconciliation requires each provision “must primarily affect government spending or revenue”. Otherwise the Republicans would have killed the Act under the filibuster 60-vote rule.

This move by Democrats is historic in its scope to help the American people. It also was a masterful way to finally make real progress on climate change and economic relief and tax fairness for 2022 when only Democratic votes are available.

The Act’s provisions will have major impact. In regard to climate change legislation, it is estimated to cut U.S. carbon emissions by about 40% by the year 2030. In regard to healthcare, this Act represents steps to make healthcare premiums and drug prices more affordable for millions of Americans, including those on Medicare.

The overall bill, provides the following:

Funding of $437 Billion --

• Energy Security and Climate Change -- $369 Billion.

• Health Care (Affordable Care Act Extension) - $64 Billion.

• Western Drought Resiliency - $4 Billion.

Revenue of $737 Billion --

• New 15% Corporate Minimum Tax (large corporations only) - $222 Billion.

• Prescription Drug Pricing Reform - $265 Billion.

• IRS Enforcement of Tax Laws - $124 Billion.

• 1% Stock Buybacks Fees - $74 Billion.

• Extension of current pass-through loss limitation for Taxes - $52 Billion.

Note: No tax increases will impact individuals or small businesses making less than $400,000 per year.

The Revenues of $737 Billion less Funding of $437 Billion leaves $300 Billion to reduce the deficit over the next 10 years. Thus, the Dems’ Act is completely paid for and provides extra revenues to pay for overspending by the Republicans during Trump’s administration.

Healthcare Impacts -- Expands Medicare benefits, imposes a $35 per month cap on insulin costs, starts capping out of pocket drug costs to $4,000 or less in 2024 and $2,000 by 2025. Allows Medicare to negotiate costs of 100 drugs over the next decade. Requires drug companies to rebate price increases higher than inflation. Lowers costs of enrollees in the ACA by an average of $800.
Energy and Climate Impacts -- Lowers energy bills by $500-$1,000 per year. Reduces carbon emissions by 40% by 2030.
Tax Fairness Steps -- Closes tax loopholes used by the wealthy. Increases hiring of employees in IRS to replace employees who left or retired during COVID and otherwise during the Trump years. These will be not only agents but other administrative support personnel needed for enforcement of tax laws for fairness.
Other Advantages -- Creates new domestic clean manufacturing jobs. Invests in cleaning up pollution and reducing environmental injustice in disadvantaged communities.

Note: Both our Colorado Senators Hickenlooper and Bennet were significantly involved with this legislation. Bennet added the minimum tax provision for very large corporations, and Hickenlooper is credited with keeping Manchin at the negotiating table.