Senate Majority Leader Chuck Schumer announced that he reached an agreement with Senator Joe Manchin and Senator Kyrsten Sinema on climate change, energy, tax, and health care provisions to be included in the Inflation Reduction Act of 2022. The bill then passed this past Sunday in the Senate by a tally of 51 to 50 with Vice President Kamala Harris voting in favor of the legislation to break the tie. Not one Republican voted for the bill.
The bill imposes a new 15% corporate minimum tax on the profits large corporations report to shareholders. Additionally, the bill bolsters the IRS with an investment of $80 billion aimed at cracking down on wealthy corporations and wealthy tax evaders.
The climate and energy provisions of the bill include new tax incentives for renewables and other sources of energy. These tax credits are meant to steer consumers to electric vehicles and to push electric utilities to develop and use more renewable energy sources going forward. $30 billion of the tax credits will go toward the production and manufacture of green energy materials and equipment. The cost of these climate and energy measures are roughly $370 billion. More importantly, the work that will come from this bill has the IBEW written all over it, especially because of the strong relationship we have with President Biden and Senator Schumer.
For the first time ever, the healthcare provisions of the legislation include Medicare being able to directly negotiate the price of prescription drugs and cap the amount that recipients pay out of pocket for drugs each year at $2,000, along with extending healthcare premium subsidies related to the Affordable Care Act.
Preliminary indications are that the combined effect of the tax provisions, along with prescription drug pricing changes, could raise more than $700 billion over the next 10 years, and the bill is projected to reduce the deficit by a little over $300 billion over a decade.
The legislation is a big win for President Joe Biden and the Democrats who have faced nothing but obstruction from the Republicans. The bill must pass in the House later this week and is expected to be signed by the President. It is not everything he had hoped for in the Build Back America Act but it addresses the needs of Americans from both parties and finally addresses the challenges posed by the climate crisis in a meaningful way. This is what we voted for and Senator Schumer got it done.