President Biden signs sweeping Inflation Reduction Act

Politics

President Joe Biden speaks about “The Inflation Reduction Act of 2022” in the State Dining Room of the White House in Washington, Thursday, July 28, 2022. (AP Photo/Susan Walsh)

(NewsNation) — President Joe Biden signed Democrats’ landmark climate change and health care bill Tuesday after the House approved the measure in a party-line vote on Friday.

The legislation, known as the Inflation Reduction act, includes $375 billion meant to fight climate change, and also caps prescription drug costs at $2,000 out-of-pocket annually for Medicare recipients. The Inflation Reduction Act includes $64 billion that would help 13 million people pay premiums over the next three years for privately bought health insurance under the Affordable Care Act. Medicare would gain the power to negotiate its costs for pharmaceuticals, initially for only 10 drugs in 2026.

Starting in 2025, Medicare beneficiaries’ out-of-pocket prescription costs would be limited to $2,000 annually.

The Inflation Reduction Act is paid for in part by new taxes on large companies and bolsters the IRS with $80 billion, which could allow it to hire as many as 87,000 employees.

Although Republicans have criticized this part of the bill, saying it could be used to target “everyday Americans,” the Treasury has said it will not increase its audits of those making less than $400,000 per year.

“The American people won, and the special interests lost,” Biden said at a triumphant signing event.

For households, a number of tax breaks are included in the act, with the aim of encouraging people to invest in solar panels, electric vehicles and environmentally friendly appliances.

The measure is a slimmed-down version of the more ambitious plan to supercharge environment and social programs that Biden and his party unveiled early last year. Originally, the proposal also envisioned free pre-kindergarten, paid family and medical leave, expanded Medicare benefits and eased immigration restrictions. This crashed after Sen. Joe Manchin, (D-West Virginia) slammed it as too costly, using an evenly divided Senate as leverage.

Biden’s signing of the bill represents a major milestone for the president and his domestic economic agenda, The Hill notes. Prospects of this climate proposal seemed hopeless a month ago, but an agreement between Senate Majority Leader Chuck Schumer and Manchin at the end of July changed things.

“In normal times, getting these bills done would be a huge achievement,” Senate Majority Leader Chuck Schumer, D-N.Y., said during the White House ceremony. “But to do it now, with only 50 Democratic votes in the Senate, over an intransigent Republican minority, is nothing short of amazing.”

Although Biden signed the bill during a small ceremony in the State Dining Room of the White House Tuesday, a larger celebration is planned for Sept. 6 once lawmakers return to Washington.

“In the coming weeks, the President will host a Cabinet meeting focused on implementing the Inflation Reduction Act, will travel across the country to highlight how the bill will help the American people, and will host an event to celebrate the enactment of the bill at the White House on Sept. 6,” the White House said in a statement.

Despite the act’s name, its direct impact on inflation is unclear. Republicans say the legislation’s new business taxes will increase prices, and Democrats were the ones to label the measure the Inflation Reduction Act. However, nonpartisan analysts have said the legislation will have a barely perceptible impact on prices, according to the Associated Press.

“This historic bill will lower the cost of energy, prescription drugs, and other health care for American families, combat the climate crisis, reduce the deficit, and make the largest corporations pay their fair share of taxes,” the White House said in an advisory per The Hill.

The Associated Press contributed to this report.

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