In Biden’s big bill: Climate, health care, deficit reduction

Aug 11, 2022, 10:02 AM | Updated: Aug 14, 2022, 4:36 am
Members of the House of Representatives gather in the chamber to celebrate after the vote to approv...

Members of the House of Representatives gather in the chamber to celebrate after the vote to approve the Inflation Reduction Act at the Capitol in Washington, Friday, Aug. 12, 2022. A divided Congress gave final approval Friday to Democrats' flagship climate and health care bill. The House used a party-line 220-207 vote to pass the legislation. (AP Photo/Patrick Semansky)

(AP Photo/Patrick Semansky)

WASHINGTON (AP) — 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 is 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 supported the package, as Republicans lined up against it. 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– that is up for final approval Friday in the House.

LOWER PRESCRIPTION DRUG COSTS

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.

HELP PAYING FOR HEALTH INSURANCE

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.

BIGGEST U.S. INVESTMENT ‘BY FAR’ IN CLIMATE CHANGE

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.

HOW TO PAY FOR ALL OF THIS?

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.

EXTRA MONEY TO PAY DOWN DEFICITS

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.

WHAT’S LEFT BEHIND?

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.

___

Associated Press writer Matthew Daly contributed to this report.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Officers fatally shoot 2 people after car chase in Missouri

OZARK, Mo. (AP) — Law enforcement officers fatally shot two people after a car chase in southwest Missouri, authorities said. The Greene County Sheriff’s Office said in a statement that an Ozark police officer tried to stop a car early Saturday after suspecting the driver was impaired but the driver fled. The officer did not […]
1 day ago
FILE - In this image made from video and released by WikiLeaks, former National Security Agency sys...
Associated Press

Putin grants Russian citizenship to Edward Snowden

MOSCOW (AP) — President Vladimir Putin has granted Russian citizenship to former U.S. security contractor Edward Snowden, according to a decree signed by the Russian leader on Monday. Snowden is one of 75 foreign nationals listed by the decree as being granted Russian citizenship. The decree was published on an official government website. Snowden, a […]
1 day ago
Associated Press

Denmark reports leak in gas pipeline in Baltic Sea

BERLIN (AP) — Denmark’s maritime authority said Monday that a gas leak had been observed in a pipeline leading from Russia to Europe underneath the Baltic Sea that is dangerous to shipping traffic. The operator of Nord Stream 2 confirmed that a leak in the pipeline had been detected southeast of the Danish island Bornholm […]
1 day ago
Associated Press

Ethiopia: UN truck hit by debris from apparent drone strike

NAIROBI, Kenya (AP) — Flying debris from an apparent drone strike has damaged a World Food Program truck in Ethiopia’s besieged Tigray region, the U.N. agency said Monday, after Ethiopian forces and rival Tigray ones recently chose renewed fighting over peace. The government accused Tigray forces of transporting fighters in trucks “illegally” painted with U.N. […]
1 day ago
Minister for Foreign Affairs of Syria Fayssal Mekdad addresses the 77th session of the United Natio...
Associated Press

Syria raps US-led coalition forces, oil losses in UN speech

UNITED NATIONS (AP) — Syria’s top diplomat demanded Monday that a U.S.-led military coalition to get out of his country and told the U.N. General Assembly meeting of world leaders that Damascus wants compensation for losses suffered by its oil and gas industry during a civil war that has been going on for 11 years. […]
1 day ago
FILE - A woman sits on a curb on Oct. 2, 2017, at the scene of a shooting outside a music festival ...
Associated Press

Harrowing film tells of Las Vegas shooting and its aftermath

NEW YORK (AP) — A pair of cowboy boots that Ashley Hoff never thought she would see again helped unlock a powerful story about the worst mass shooting in modern U.S. history. The resulting film, “11 Minutes,” is an inside account of the 2017 massacre at a country music festival in Las Vegas and, more […]
1 day ago

Sponsored Articles

Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
In Biden’s big bill: Climate, health care, deficit reduction