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House Democrats send long-awaited healthcare and climate bill to Biden's desk

Washington Examiner logo Washington Examiner 8/12/2022 Virginia Aabram
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The House passed the Democrats' healthcare, climate, and tax bill, dubbed the Inflation Reduction Act, on Friday, sending a scaled-back version of President Joe Biden's agenda to his desk.

The bill passed along party lines in a 220-207 vote and includes allowances for Medicare to negotiate some drug prices, price caps on insulin for Medicare recipients, the largest climate provision ever undertaken, increases on some corporate taxes, and an expansion of the Internal Revenue Service. It will quickly come before Biden, who will sign the bill and secure another legislative victory for his agenda and for Democrats to tout before the midterm elections.

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"Today is really a glorious day for us," Speaker of the House Nancy Pelosi (D-CA) said Friday morning. "We send to the president's desk a monumental bill that will be truly for the people: the Inflation Reduction Act. ... Sadly, for all the good that it does, [it passed] without one Republican vote."

The legislation was set to spend $433 billion over 10 years and raise nearly $740 billion, though the final analysis amid tweaks during its passage in the Senate on Sunday has not yet been released. Democrats have touted that it would decrease the deficit and address kitchen table issues, while Republicans raised serious concerns over the bill for potentially increasing taxes on those making less than $400,000 a year and hiring 87,000 IRS employees.

"You can’t tax and spend your way out of an inflation crisis," House Republican Leader Kevin McCarthy tweeted Friday.

Economists have noted that while the bill may have a stimulating effect on the economy long-term, it will not likely make a difference in the next several months. Inflation did not worsen in July, prompting hopes that the worst may have passed.

"On one hand, it does not add to inflation, which was what the previous concern that people had about passing legislation like this right now," Kent Smetters, a faculty director of the Penn Wharton Budget Model, told NPR. "But at the same it doesn't really take away from the rise in prices either."

The legislation creates a 15% minimum corporate tax and introduces a 1% excise tax on corporate stock buybacks. A Joint Committee on Taxation analysis released Tuesday found that the tax burden on those making between $200,000 and $500,000 would indirectly increase by 0.8%, though Pelosi said Friday that there would be "no new taxes on families making less than $400,000."

Some of the climate and energy provisions include tax incentives to buy electric vehicles and shoring up domestic production of renewable energy components, such as solar panels. The legislation, Democrats say, will move the United States toward decreasing carbon emissions from 2005 levels by 40% by 2030, less than the Biden administration's initial goal of a 50% reduction.

The IRS component, which has become one of the most contentious partisan topics over the last week, would hire 87,000 workers over 10 years to replace the 50,000 who are meant to retire in that time frame. Democrats say the additional employees would increase scrutiny on high earners to bolster the government's income and lower the deficit, while Republicans fear the scrutiny will fall on low earners anyway.

Regarding healthcare, Medicare recipients will see their insulin costs capped at $35 next year. An out-of-pocket drug price cap of $2,000 for Medicare patients will begin in 2025, and Medicare will be able to negotiate the cost of 10 drugs beginning in 2026.

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The bill started as Biden's Build Back Better infrastructure legislation, which passed the House last year before it was tanked in the Senate by centrist Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV). Manchin and Senate Majority Leader Chuck Schumer (D-NY) reached a surprise deal last month, which culminated in an all-night vote series last weekend and ended with Vice President Kamala Harris passing the tiebreaking vote.

The legislation joins a series of Democratic victories this summer that seemed untenable earlier this year. Biden signed the PACT Act that provides relief to veterans this week, along with the approval of Sweden and Finland's request to join the North Atlantic Treaty Organization. Last month, Congress passed a gun reform bill and the CHIPS Act, a bill that is meant to bolster the computer chip industry.

 

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Tags: House of Representatives, Nancy Pelosi, Joe Biden, Climate Change, Taxes

Original Author: Virginia Aabram

Original Location: House Democrats send long-awaited healthcare and climate bill to Biden's desk

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