Many of the improvements outlined in President Biden’s Build Back Better program were not included in the Democrats’ Inflation Reduction Act. AP Photo/Evan Vucci hide caption
switch to caption Evan Vucci/AP
Many of the improvements outlined in President Biden’s Build Back Better program were not included in the Democrats’ Inflation Reduction Act.
Evan Vucci / AP Senators voted on amendments to the Democrats’ massive spending bill that addresses taxes, the environment, and health care late on Saturday night and early on Sunday.
Since none of the 50 Republican senators will support the measure, the legislation must be approved by all 50 Democrats plus one tie-breaking vote from Vice President Harris under the budget reconciliation procedure. Additionally, it limits the bill’s provisions to those that directly affect federal expenditure and revenue.
Despite a few changes made by the Senate parliamentarian, majority leader Chuck Schumer, a Democrat from New York, declared on Saturday that Democrats still won the legislation in its whole.
Democrats claim it will address the primary economic concern of Americans and have dubbed it the Inflation Reducation Act. Republicans claim that the increased expenditure will make inflation worse. However, according to the impartial Congressional Budget Office, the bill’s impact on inflation in 2022 and 2023 is “negligible.”
Overall, the plan represents a greatly scaled-back response to what many Democrats—including President Biden—originally requested.
“This proposal is far from ideal. A compromise, indeed. But progress is frequently made in this way, “At the White House last month, Biden noted. The strongest bill you can pass is this one, I’m saying to Congress.
The House intends to take up the legislation at the end of the week following Senate approval before sending it to President Biden for his signature.
Here is a list of some of the things that were and weren’t in the Democratic measure.
RESPONSE TO CLIMATE CHANGE The greatest federal clean energy investment in American history would be made, totaling more than $300 billion, in energy and climate policy.
Although many environmental and climate activists favor the package, it falls short of the $555 billion that Democrats had first demanded.
ENVIRONMENT The transportation and electricity generation are addressed in this section of the plan, which also includes $60 billion for expanding renewable energy infrastructure in the production of things like solar panels and wind turbines.
It also contains a number of tax breaks for people on things like buying electric cars and improving the energy efficiency of their homes.
Democrats claim that the plan will reduce greenhouse gas emissions by 40% by the end of the decade, based on 2005 levels, falling short of the 50% Biden had initially intended for.
According to Jesse Jenkins of Princeton University, who is in charge of the REPEAT Project, which examines the effects of governmental climate action, “it puts us within a close enough distance that further executive action, state and local government efforts, and private sector leadership could plausibly get us across the finish line by 2030.”
REDUCING THE PRACTICAL COST OF MEDICATIONS The bill addresses health improvements by lowering the cost of prescription medications, although there are some restrictions.
A landmark provision of the bill permits the federal health secretary to haggle annually over the cost of some pricey medications for Medicare.
However, this won’t affect all prescription medications or all patients, and it won’t happen right away. In 2026, 10 medications covered by Medicare will be subject to the agreements; in 2029, that number will rise to 20 medications.
The Senate parliamentarian ruled that the portion of the bill that attempted to set a cap on the price of insulin, a medication that is extremely expensive in the United States compared to other countries, at $35 per month was out of order. As a result, the bill is currently out of reach because it would require 60 votes to pass as regular legislation.
Additionally, the parliamentarian ruled that a provision in the bill requiring drug companies to provide rebates when prescription prices exceed inflation did not fully comply with the rules for budget reconciliation; she claimed that it could only apply to Medicare beneficiaries and not to those with private insurance.
The law caps Medicare beneficiaries’ out-of-pocket expenses for prescription drugs at $2,000 beginning in 2025.
Additionally, the Affordable Care Act includes a three-year extension of healthcare subsidies that were first included in a pandemic relief bill last year. According to government estimates, this extension helped the majority of people with coverage through the federal health insurance exchange keep their monthly premiums at $10 or less.
That aids in protecting millions of Americans from increases in their medical expenses.
TOXIC REFORM For businesses with incomes of $1 billion or more, the law establishes a 15% minimum tax, generating more than $300 billion in revenue.
However, a part that reduced the carried interest tax deduction was cut. Kyrsten Sinema of Arizona consented to sign the package if this provision, which would have altered how private equity income is taxed, was removed. According to Democrats, it would have generated $14 billion in income.
An alternative that might generate almost five times as much income as the carried interest legislation is a 1% excise tax on stock buybacks. Although it wouldn’t go into effect until next year, this has led to concerns that some corporations will hurry to buy back stock before 2023.
Sen. Joe Manchin of West Virginia objected to extending the Child Tax Credit, which is a significant component of the measure that was not included. While progressives, like Vermont Sen. Bernie Sanders, have persisted in calling for its inclusion in the bill, Manchin stated last year that the cost to prolong the credit was too great.
Even without the backing he needed to pass it, Sanders intended to add it as an amendment to the bill during the all-night voting session.