Congress poised to pass major climate bill
WASHINGTON (AP) — A divided Congress gave final approval Friday to Democrats’ flagship climate and health care bill, handing President Joe Biden a back-from-the-dead triumph on coveted priorities that the party hopes will bolster their prospects for keeping their hold on Congress in November’s elections.
The House used a party-line 220-207 vote to pass the legislation, which is but a shadow of the larger, more ambitious plan to supercharge environment and social programs that Biden and his party envisioned early last year. Even so, Democrats happily declared victory on top-tier goals like providing Congress’ largest ever investment in curbing carbon emissions, reining in pharmaceutical costs and taxing large companies, a vote they believe will show they can wring accomplishments from a routinely gridlocked Washington that often disillusions voters.
“Today is a day of celebration, a day we take another giant step in our momentous agenda,” said House Speaker Nancy Pelosi, D-Calif. She said the measure “meets the moment, ensuring that our families thrive and that our planet survives.”
Republicans solidly opposed the legislation, calling it a cornucopia of wasteful liberal daydreams that would raise taxes and families’ living costs. They did the same Sunday but Senate Democrats banded together and used Vice President Kamala Harris’ tiebreaking vote to power the measure through that 50-50 chamber.
Patrick Semansky
House Speaker Nancy Pelosi of Calif., leads a vote on the Inflation Reduction Act in the House chamber at the Capitol in Washington, Friday, Aug. 12, 2022. (AP Photo/Patrick Semansky)
“Democrats, more than any other majority in history, are addicted to spending other people’s money, regardless of what we as a country can afford,” said House Minority Leader Kevin McCarthy, R-Calif. “I can almost see glee in their eyes.”
Biden’s initial 10-year, $3.5 trillion proposal also envisioned free prekindergarten, paid family and medical leave, expanded Medicare benefits and eased immigration restrictions. That crashed after centrist Sen. Joe Manchin, D-W.Va., said it was too costly, using the leverage every Democrat has in the evenly-divided Senate.
Still, the final legislation remained substantive. Its pillar is about $375 billion over 10 years to encourage industry and consumers to shift from carbon-emitting to cleaner forms of energy. That includes $4 billion to cope with the West’s catastrophic drought.
Spending, tax credits and loans would bolster technology like solar panels, consumer efforts to improve home energy efficiency, emission-reducing equipment for coal- and gas-powered power plants and air pollution controls for farms, ports and low-income communities.
Another $64 billion would help 13 million people pay premiums over the next three years for privately bought health insurance. Medicare would gain the power to negotiate its costs for pharmaceuticals, initially in 2026 for only 10 drugs. Medicare beneficiaries’ out-of-pocket prescription costs would be limited to $2,000 starting in 2025, and beginning next year would pay no more than $35 monthly for insulin, the costly diabetes drug.
The bill would raise around $740 billion in revenue over the decade, over a third from government savings from lower drug prices. More would flow from higher taxes on some $1 billion corporations, levies on companies that repurchase their own stock and stronger IRS tax collections. About $300 billion would remain to defray budget deficits, a sliver of the period’s projected $16 trillion total.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP Photo/Patrick Semansky, File
The biggest investment ever in the U.S. to fight climate change. A hard-fought cap on out-of-pocket prescription drug costs for Medicare recipients. A new corporate minimum tax to ensure big businesses pay their share.
And billions left over to pay down federal deficits.
All told, the Democrats' “Inflation Reduction Act” may not do much to immediately tame inflationary price hikes. But the package that won final congressional approval in the House on Friday and heading to the White House for President Joe Biden's signature will touch countless American lives with longtime party proposals.
Not as robust as Biden's initial ideas to rebuild America's public infrastructure and family support systems, the compromise of health care, climate change and deficit-reduction strategies is also a stunning election year turnaround, a smaller but not unsubstantial product brought back to political life after having collapsed last year.
Democrats alone support the package, with all Republicans voting against it Friday. Republicans deride the 730-page bill as big government overreach and point particular criticism at its $80 billion investment in the IRS to hire new employees and go after tax scofflaws.
Voters will be left to sort it out in the November elections, when control of Congress will be decided.
Here's what's in the estimated $740 billion package — made up of $440 billion in new spending and $300 billion toward easing deficits..
AP Photo/Patrick Semansky, File
The biggest investment ever in the U.S. to fight climate change. A hard-fought cap on out-of-pocket prescription drug costs for Medicare recipients. A new corporate minimum tax to ensure big businesses pay their share.
And billions left over to pay down federal deficits.
All told, the Democrats' “Inflation Reduction Act” may not do much to immediately tame inflationary price hikes. But the package that won final congressional approval in the House on Friday and heading to the White House for President Joe Biden's signature will touch countless American lives with longtime party proposals.
Not as robust as Biden's initial ideas to rebuild America's public infrastructure and family support systems, the compromise of health care, climate change and deficit-reduction strategies is also a stunning election year turnaround, a smaller but not unsubstantial product brought back to political life after having collapsed last year.
Democrats alone support the package, with all Republicans voting against it Friday. Republicans deride the 730-page bill as big government overreach and point particular criticism at its $80 billion investment in the IRS to hire new employees and go after tax scofflaws.
Voters will be left to sort it out in the November elections, when control of Congress will be decided.
Here's what's in the estimated $740 billion package — made up of $440 billion in new spending and $300 billion toward easing deficits..
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
Launching a long-sought goal, the bill would allow the Medicare program to negotiate some prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.
The result is expected to lower costs for older adults on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.
The revenue raised would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document.
Seniors would also have insulin prices capped at $35 a month.
AP file
Launching a long-sought goal, the bill would allow the Medicare program to negotiate some prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.
The result is expected to lower costs for older adults on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.
The revenue raised would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document.
Seniors would also have insulin prices capped at $35 a month.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.
Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for some 13 million people who are purchasing their own health care policies through the Affordable Care Act.
AP file
The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.
Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for some 13 million people who are purchasing their own health care policies through the Affordable Care Act.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
The bill would infuse nearly $375 billion over the decade in climate change-fighting strategies that Democrats believe could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in U.S. history, by far.”
For consumers, that means tax rebates to buy electric vehicles — $4,000 for used vehicle purchase and up to $7,500 for new ones, eligible to households with incomes of $300,000 or less for couples, or single people with income of $150,000 or less.
Not all electric vehicles will fully qualify for the tax credits, thanks to requirements that component parts be manufactured and assembled in the U.S. And pricier cars costing more than $55,000 and SUVs and trucks priced above $80,000 are excluded.
There's also tax breaks for consumers to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar.
For businesses, the bill has $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country's dependence on fossil fuels.
The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.
The bill would impose a new fee on excess methane emissions from oil and gas drilling while giving fossil fuel companies access to more leases on federal lands and waters.
A late addition pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada and Colorado would designate $4 billion to combat a mega-drought in the West, including conservation efforts in the Colorado River Basin, which nearly 40 million Americans rely on for drinking water.
AP file
The bill would infuse nearly $375 billion over the decade in climate change-fighting strategies that Democrats believe could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in U.S. history, by far.”
For consumers, that means tax rebates to buy electric vehicles — $4,000 for used vehicle purchase and up to $7,500 for new ones, eligible to households with incomes of $300,000 or less for couples, or single people with income of $150,000 or less.
Not all electric vehicles will fully qualify for the tax credits, thanks to requirements that component parts be manufactured and assembled in the U.S. And pricier cars costing more than $55,000 and SUVs and trucks priced above $80,000 are excluded.
There's also tax breaks for consumers to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar.
For businesses, the bill has $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country's dependence on fossil fuels.
The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.
The bill would impose a new fee on excess methane emissions from oil and gas drilling while giving fossil fuel companies access to more leases on federal lands and waters.
A late addition pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada and Colorado would designate $4 billion to combat a mega-drought in the West, including conservation efforts in the Colorado River Basin, which nearly 40 million Americans rely on for drinking water.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.
It's a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.
The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade.
There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade.
Savings from allowing Medicare’s negotiations with the drug companies is expected to bring in $288 billion over 10 years, according to the non-partisan Congressional Budget Office.
The bill sticks with Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year.
Yet money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue — a net gain of $124 billion over the decade.
AP file
One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.
It's a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.
The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade.
There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade.
Savings from allowing Medicare’s negotiations with the drug companies is expected to bring in $288 billion over 10 years, according to the non-partisan Congressional Budget Office.
The bill sticks with Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year.
Yet money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue — a net gain of $124 billion over the decade.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
With some $740 billion in new revenue and around $440 billion in new investments, the bill promises to put the difference of about $300 billion toward deficit reduction.
Federal deficits spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation's economy churned through shutdowns, closed offices and other massive changes.
The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which recently put out a new report on long-term projections.
AP file
With some $740 billion in new revenue and around $440 billion in new investments, the bill promises to put the difference of about $300 billion toward deficit reduction.
Federal deficits spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation's economy churned through shutdowns, closed offices and other massive changes.
The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which recently put out a new report on long-term projections.
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Congress OKs Dems’ climate and health care bill, a Biden triumph
AP file
The package, nowhere near the sweeping Build Back Better program Biden once envisioned, remains a sizable undertaking and, along with COVID-19 relief and the GOP 2017 tax cuts, is among the more substantial bills from Congress in years.
While Congress did pass and Biden signed into law a $1 trillion bipartisan infrastructure bill for highways, broadband and other investments that was part of the White House's initial vision, the Democrats' other big priorities have slipped away.
Gone, for now, are are plans for free pre-kindergarten and community college, as well as the nation's first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs. Also allowed to expire is the enhanced child care credit that was providing $300 a month during the pandemic.
AP file
The package, nowhere near the sweeping Build Back Better program Biden once envisioned, remains a sizable undertaking and, along with COVID-19 relief and the GOP 2017 tax cuts, is among the more substantial bills from Congress in years.
While Congress did pass and Biden signed into law a $1 trillion bipartisan infrastructure bill for highways, broadband and other investments that was part of the White House's initial vision, the Democrats' other big priorities have slipped away.
Gone, for now, are are plans for free pre-kindergarten and community college, as well as the nation's first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs. Also allowed to expire is the enhanced child care credit that was providing $300 a month during the pandemic.
