Aug. 8, 2022 – The latest major legislation being supported by Democrats in Congress includes provisions for health care, prescription drug costs, climate change, and ways to cut the deficit.
Called the Inflation Reduction Act of 2022, the 755-page bill was passed Sunday by the Senate and is heading to the House this week. The estimated $740 billion package would cap out-of-pocket prescription drug costs at $2,000 for seniors, help Americans pay for private insurance, and invest $375 billion to fight climate change during the decade, according to The Associated Press.
About half of the money raised – or $300 billion – would go toward paying down federal deficits. The bill would be partly funded through new corporate taxes, the AP reported, including a 15% minimum tax on large corporations that earn more than $1 billion in annual profits to ensure they don’t skip on paying taxes, as well projected federal savings from lower Medicare drug costs.
Despite the name, it’s not clear that the bill would lower inflation-related issues, the AP reported, though millions of Americans are expected to see some relief through health care and other costs.
In the 50-50 Senate, votes fell along party lines, with all Democrats in favor and all Republicans opposed. Vice President Kamala Harris was the tiebreaker, giving a 51-50 vote to pass the bill. The House is expected to vote on the bill by Friday, the AP reported.
Prescription Drug Costs
The legislation would allow the Medicare program to negotiate prescription drug prices with drug companies, which could save the federal government about $288 billion during the 10-year budget window.
The new revenues would be put back into lowering drug costs, including a $2,000 out-of-pocket cap for older adults who buy prescriptions from pharmacies. Insulin prices would be capped at $35 per dose for seniors.
The money would also be used to provide free vaccines for older adults, the AP reported.
The bill would extend the subsidies offered during the COVID-19 pandemic to help uninsured Americans, by lowering insurance premiums for those who purchase their own health care policies. The assistance was supposed to expire this year, but the legislation would extend the relief for 3 more years.
The legislation would put $375 billion over 10 years into climate change programs, including investments in renewable energy production and tax rebates for people to buy new or used electric vehicles, the AP reported.
The funding includes $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar power. The bill also gives tax credits for nuclear power and carbon capture technology and puts a fee on excess methane emissions from oil and gas drilling.
A late addition supported by legislators in Arizona, Colorado, and Nevada would provide $4 billion to fight the major drought in the West, including conservation efforts in the Colorado River Basin, which provides water to nearly 40 million Americans.
Democrats believe the strategies could cut U.S. greenhouse gas emissions 40% by 2030, the AP reported.