WASHINGTON (CN) — Returning from August recess for a day, House Democrats on Friday passed a massive climate, health care and tax bill that aims to deliver on much-vaunted campaign promises. to reduce drug prices and fight climate change at the federal level while raising taxes on wealthy corporations.
The Inflation Reduction Act, the brainchild of a last-minute deal between Senate Majority Leader Chuck Schumer and conservative Democratic Senator Joe Manchin of West Virginia, has revived political goals and legislation that many thought was destined for the cutting room after months of previous negotiations failed to win Manchin’s support for a Democratic-backed bill.
Lawmakers returned to Washington after the August recess, a time when members take a break from the congressional schedule and typically work from their home states, to get the bill across the finish line. It passed the House by a vote of 220 to 207, with all Democratic members backing the legislation.
Now, the sweeping reconciliation bill is heading for President Joe Biden’s desk, marking a major victory for Democrats just months away from November’s midterm elections.
The package aims to reduce prescription drug and healthcare prices by allowing Medicare to negotiate prescription drug prices for a limited number of drugs, starting in 2026, and monthly insulin prices for people using Medicare will be capped at $35 per month.
It also includes a policy long fought by Democrats that would extend Affordable Care Act grants for people buying their own insurance through 2025, preventing insurance premiums from rising.
“These measures are a blow to Pharma, which has been in control for decades,” House Speaker Nancy Pelosi said Friday.
Climate advocates celebrated the package, which includes the biggest ever federal investment to fight climate change.
An estimated $369 billion will go to green energy and climate provisions over the next decade, an investment that Democrats say will put the United States on track to cut the country’s carbon emissions by 40% by 2030, compared to 2005 levels.
This climate investment includes grants for people who buy electric vehicles and green energy resources for their homes such as solar panels or heat pumps.
Those policies will be funded by revenue generated from the package, which raises the minimum corporate tax rate for some wealthy businesses, taxes stock buybacks and beefs up the IRS to target tax evaders.
“It makes a difference at the kitchen table. And at the boardroom table, corporations and the wealthy will now have to pay their fair share,” Pelosi said at a news conference Friday morning.
Democrats say these tax policies and new IRS funding will foot the bill while reducing the federal deficit by $300 billion over the next decade, though the nonpartisan Congressional Budget Office has approximated that figure. of $100 billion.
Republicans have criticized the IRS funding, arguing it will lead to audits of middle-class families.
Representative Kevin Brady, a Republican from Texas, called the bill “a hoax against the American people.”
“If the Green New Deal and corporate welfare had a baby, it would look like this,” Brady told the House on Friday.
The IRS said the bill would improve customer service and fund audits of wealthy Americans. Additionally, Treasury Secretary Janet Yellen ordered the service not to use the new financial support to increase audits of people earning less than $400,000.
“I believe today we demonstrate what Democrats mean when we say we put people above politics. Our fellow Republicans continue to put politics ahead of the health and well-being of people. people,” said Majority Whip James Clyburn, a Democrat from South Carolina.
House Minority Leader Kevin McCarthy criticized the bill as “the biggest tone-deaf bill I have seen in this chamber in 232 years.”
“Democrats, more than any in history, are addicted to spending other people’s money, regardless of what we as a country can afford,” McCarthy told the chamber Friday.
In order to get Manchin to sign on to the legislation, Democrats removed provisions from what was once the $2 trillion Build Back Better Act, particularly policies aimed at reducing child poverty and expanding the safety net. social.
The child tax credit, which gave monthly checks to families amid the pandemic, and calls for universal early education as well as paid family leave were not included in the final bill.
Manchin, a Democrat in a state that relies heavily on the coal and oil industries, got some of his personal policies in the compromise, including a provision that will expand oil and gas leasing.
Democrats also agreed to back a full-line bill authorizing reforms that will likely accelerate how quickly oil and gas companies can expand their projects.
While the legislation is strategically labeled a disease of the nation’s inflation problems, some experts predict a minor change in long-term inflation, and Penn Wharton’s budget model predicts “the impact on inflation is statistically indistinguishable from zero”.
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