What is in the Inflation Reduction Act? Climate, health, taxes...
President Biden signed the legislation one year ago that revamped was aimed at lowering health care costs, bringing down inflation and making big companies pay more taxes.
It took much longer than expected, but the rebranded Build Back Better was passed in August 2022. Cut down from the trillions of dollars it was initially going to cost, the nature of a budget reconcilation bill managed to heave it over the line.
All 50 democrats voted for the legislation, making the negotiations with Senators Joe Manchin and Kristen Sinema worth the time, though the bill does not have everything most Democrats would have wanted. Progressives are certainly not as happy as expected due to compromises that had to be made.
Let’s take a look at the bill’s provisions.
Climate
The majority of the money put forward in the legilsation was for tackling the climate crisis. $400 billion to reduce carbon emissions by 40 percent by 2030. It aimed to do this by offering rebates and credits for those to better insulate their home or switch to an electric vehicle and the like.
Senate Majority Leader Chuck Schumer heralded the plan as the “boldest climate package in US history.”
“This bill will kickstart the era of affordable clean energy in America,” he said on the Senate floor. “It’s a game-changer, it’s a turning point, and it’s been a long time in coming.”
However, some of these positive measures are offset by increased leasing of land to fossil fuel companies in the Gulf of Mexico and Alaska. We had a look at how much difference the bill would make in the long term.
Health
The healthcare aspects are some of the most important long term effects of the bill. Firstly, the act allows Medicare to negotiate for the price of prescription drugs starting in 2023. At present, the country’s largest healthcare provider cannot negotiate the price of drugs it purchases, leaving prices at the whim of drug providers. Much like the National Health Service in the UK, Medicare will now be able to drive down the price of drugs it purchases.
Excepting this measure, Medicare enrollees are further protected on the insulin front. For them, the price of insulin is capped at $35 per month. For many Americans, the price can be as high as $900 a month for the life saving drug. This measure was to be expanded to all those on private healthcare insurance but was blocked by Senate Republicans.
Taxes
The bill makes a few changes to the US tax code, including adding a 15 percent minimum corporate tax. The legislation also allocated funding to the IRS to hire thousands of workers to go after tax evasion on the highest earners.