A $430 billion climate change, healthcare, and tax measure that would help limit the carbon emissions that cause climate change and lower drug costs for the elderly was enacted by the U.S. Senate, giving Democrats a significant policy victory.
Republicans are expected to gain back control of at least one chamber of Congress in the midterm elections on November 8, so President Joe Biden’s congressional allies are hoping that the bill, which they managed to push through the Senate against unanimous Republican opposition, will improve their chances.
The Inflation Reduction Act is a drastically scaled-down version of a previous plan that was opposed by independent Senate Democrats Kyrsten Sinema and Joe Manchin because it was too expensive.
Senate Majority Leader Chuck Schumer stated, “This is one of the most comprehensive and significant laws Congress has seen in decades: it will reduce inflation, lower prescription medication costs, fight climate change, close tax loopholes, and it will reduce — reduce — the deficit.”
“For those who are trying to pay their bills, for those who are paying for prescription drugs for elders, and for those whose children have asthma. For them, this bill is “said he.
The proposal is now moved to the Democratically-controlled House of Representatives after the partisan Senate passed it by a vote of 51–50, with Vice President Kamala Harris casting the deciding vote. After the House passes the bill, Biden might sign it into law.
Republicans attacked the legislation as a spending “wish list” that would harm an inflation-stricken economy by destroying employment, driving up energy prices, and undermining economic growth at a time when a recession may be on the horizon.
Top Senate Republican Mitch McConnell declared that “hundreds of billions of dollars in tax hikes on a faltering economy will kill American employment.” He criticized the proposal, calling it a “so-called inflation bill that will do absolutely nothing to effectively cut inflation and would instead make it worse in the short term.”
According to a poll taken on August 3 and 4, about half of Americans — or 49% — approve the measure, including 69 percent of Democrats and 34% of Republicans. Giving Medicare the authority to negotiate prescription prices is the most well-liked part of the proposed legislation, with support from 71% of respondents, including 68% of Republicans.
According to economists, the legislation may assist the Federal Reserve fight inflation, but they do not anticipate the economy to be significantly affected in the near future.
According to modeling by the Repeat Project at Princeton University, the bill offers businesses and families billions in incentives to encourage the purchase of electric vehicles and energy-efficient appliances as well as to stimulate new investments in wind and solar power. This will double the amount of new, clean electricity-generating capacity coming online in the United States by 2024.
That would aid in the United States fulfilling its promise, made at the Glasgow climate summit last year, to cut its greenhouse gas emissions in half below 2005 levels by 2030.
While environmental organizations mostly supported the bill, they pointed out that Manchin’s compromises, who represents coal-producing West Virginia, would extend the United States’ reliance on fossil fuels.
In accordance with those requirements, the federal government would only be permitted to approve new wind and solar energy developments on federal property when drilling rights for oil and natural gas are also up for auction.
According to Juliette Cubanski, deputy director of the Medicare program at the Kaiser Family Foundation, the proposal will reduce prescription prices for the federal government, businesses, and patients.
Perhaps those with Medicare prescription drug coverage would experience the most impact, she said.
The clause allowing the federal Medicare health plan for Americans who are 65 and older and who are disabled to bargain for reduced prescription drug prices is a significant move.
Negotiating prices, according to the pharmaceutical industry, would hinder innovation. Starting in 2026, 10 of the most expensive pharmaceuticals covered by Medicare would be subject to negotiated pricing; this number would increase until 20 annual discounts were allowed by 2029.
The clause also sets a $2,000 yearly limit on out-of-pocket expenses for seniors using the Medicare program.