President Joe Biden recently signed the Inflation Reduction Act (IRA) into law, which includes $700 billion in funding for a wide array of projects and provisions meant to reduce pollution, promote clean energy, keep healthcare costs down, and of course, lower inflation for American families.
The IRA invests $369 billion in climate and energy projects, such as American manufacturing and domestic supply chains for clean energy industries. Other climate and energy policies in the IRA include conservation measures (e.g. sustainable agriculture, coastal restoration, and forest preservation), grants to reduce air pollution at American ports, and fair labor and wage standards for businesses that use government tax credits for clean energy projects. Researchers estimate that the IRA could lower America’s greenhouse gas emissions by 40 percent.
The new law also sets aside $64 billion to extend Affordable Care Act (ACA) subsidies into 2025, keeping premiums affordable for 13 million Americans. According to data from the Kaiser Family Foundation, people who rely on the ACA to afford medical care would see their premium rise by up to 50 percent if the IRA did not renew the subsidies.
In addition to health care and climate measures, the IRA has a $437 billion spending package projected to raise $737 billion in revenue and reduce the deficit by $300 billion over a decade. The biggest sources of revenue are expected to come from the reductions in drug prices through Medicare and the 15 percent corporate minimum tax on companies making more than $1 billion a year. Approximately $124 billion will come from increased enforcement from the Internal Revenue Service (IRS) to ensure those making more than $400,000 annually are properly audited.
According to a new poll from Data for Progress and Climate Power, 51 percent of all American voters are in favor of the IRA and its provisions. Democrats overwhelmingly support it at 95 percent in addition to a majority of independents (73 percent) and over half of Republicans (52 percent).
President Biden’s original plan was to pass the nearly $2 trillion Build Back Better Plan, but US legislators prevented its passage, and some demanded certain measures be removed from the final bill before they voted for it. Senator Krysten Sinema (D-AZ), for instance, held up its passage in the Senate at the last minute over a provision which would close a loophole allowing hedge fund executives and private equity managers to pay lower taxes than most taxpayers.
Other measures, like universal child care and tax cuts for the middle class, were lost to the wayside, but President Biden still sees the bill’s passage as a victory, especially since all 50 GOP Senators and most House Republicans voted against the IRA. “In this historic moment,” he said, “Democrats sided with the American people and every single Republican in the Congress sided with a special interest in this vote. Every single one.”