The Senate on Sunday passed the Reducing Inflation Act, which aims to provide key funding for clean energy investments and measures to lower the cost of prescription drugs, after hours-long votes.
The marathon session that began Saturday continued through Sunday afternoon, as senators voted on multiple amendments to the bill. 755 pages of legislation, including a failed provision from Sen. Raphael Warnock (D-GA) that capped the cost of insulin products to $35 a month for private insurance. Still, despite the bill’s uphill journey and many compromises, there are some victories that should have a tangible impact on ordinary Americans.
On Saturday, Vice President Kamala Harris voted to start a full day of debate on the bill — along with several last-minute amendments proposed by Republican senators. Sen. Joe Manchin (D-WV) warned his colleagues in the Democratic caucus not to trust Republican senators’ “sham amendments” because no Republicans plan to vote for the IRA under any circumstances.
Nonetheless, my R friends have made it clear that they are totally unwilling to support this bill under any circumstances. None of their amendments will change that. For this reason, I will vote to protect the integrity of the IRA, regardless of the substance of its bogus amendment.
— Senator Joe Manchin (@Sen_JoeManchin) August 7, 2022
For much of Sunday, the Democratic caucus appeared to be heeding his advice and voted against the Republican amendment — any amendment that could upset the balance of the carefully calibrated bill, for that matter. That includes those of Sen. Bernie Sanders (I-VT). Sanders alone proposed amendments to restore the child tax credit and guarantee that Medicare’s drug costs will not exceed what the Department of Veterans Affairs pays for the same drugs, CQ roll call was reported.
The legislation is a stripped-down version of the Build Back Better Act, an ambitious Democratic agenda to fund health care, education and clean energy that Manchin effectively killed in December. Manchin announced on Fox News that he would not vote for the legislation at the time due to concerns about entrenched inflation. then, Manchin issued a statement Said the true cost of the BBB would far exceed its initial $1.5 trillion price tag and raised concerns about the national debt.
“My Democratic colleagues in Washington are determined to reshape our society in a way that makes our country more vulnerable to the threats we face,” he wrote at the time. “I can’t afford the massive debt and inflation tax of over $29 trillion that is real and harmful to every hardworking American on the gas pump, grocery store and utility bills, with no end in sight. “
Manchin’s December statement meant those priorities were all but put on hold until late July, when Manchin announced that he and Senate Majority Leader Chuck Schumer had reached an agreement to pass a watered-down version of the settlement bill — — IRA. Manchin reportedly agreed in exchange for Schumer’s promise that Congress would work to speed up the permitting process for projects under the Clean Water Act, which would make it easier for developers to build pipelines, Bloomberg Law report.
Now The bill will go to the House of Representatives for a final vote.
what does this do real What does it mean for inflation?
The bill contains a number of different measures as a way to get some of the Biden administration’s priority legislation through.However, it Yes Known as the Inflation Reduction Act, how will it affect the decades-long high inflation numbers consumers feel at grocery stores and gas stations?
As economists told Vox’s Zhou Li last week, the impact may not be felt immediately or particularly noticeably by the average American — its impact will be long-term and macroeconomic.
“For the most part, it’s not about the 2022 bill,” Marc Goldwein, Senior Policy Director of the Responsible Federal Budget Committee told Vox. “It’s about 2023, 2024, 2025. This is to help the Fed fight persistent inflation. It’s not going to lower inflation in September.”
Shai Akabas, director of economic policy at the Bipartisan Policy Center, explained: “There is little that policymakers can do to affect inflation overnight, certainly on a legislative basis. That’s mostly the Fed’s job.” The Fed raised interest rates, which essentially raised It reduces borrowing costs to slow spending, but any fiscal policy decision by the central bank will also take time to affect the system as a whole. As Vox’s Emily Stewart explains, this could be painful for consumers in the short term — the cost of mortgage and credit card debt will rise, hiring could slow, and the possibility of a recession looms. However, this is all in the hope of building a more stable economy in the future.
There are measures in the bill to reduce the inflationary burden on fuel and energy costs.When Russia invaded Ukraine in February, fuel prices were already high due to global inflation, and subsequent sanctions on Russian fuel exacerbated those price increases, even though the price of a gallon of gasoline had fallen due in part to federal action like releasing oil from oil Strategic Petroleum Reservethe bill contains measures to open the way for drilling and rapid pipeline construction to increase available supply, thereby reducing costs to the average consumer.
Additionally, the bill would allow Medicare to negotiate cheaper prescription drug prices for certain very expensive drugs and cap out-of-pocket costs for Medicare beneficiaries to $2,000 a year. This unprecedented measure will lower costs for consumers. A further measure would require drug companies to pay Medicare rebates if they raise drug prices faster than inflation, NPR reported Friday – May inhibit repeated price hikes by these companies.
Despite healthcare breakthroughs, Senate still rejects a measure Private insurers are required to limit out-of-pocket insulin costs to $35 per month.
The bill’s non-inflationary measures also matter
The IRA may not immediately bring prices down to pre-Covid levels, a far cry from the Democrats’ original “build back better” plan, but it represents an important step forward in tackling health care costs and the existential threat of climate change step.
In addition to underpinning Medicare’s new negotiating power, the bill also subsidizes the Affordable Care Act insurance through 2025, making health insurance affordable for millions of people insured through the health care marketplace. The initial subsidy should end this year, meaning premiums will rise for millions of people eligible for free health insurance when Congress removes the income cap to qualify for federal aid that pays premiums.
The IRA also includes the largest-ever investments in climate change mitigation efforts, clean energy production, and climate justice programs, all designed to mitigate the harmful effects of climate change on underserved areas.
Although climate activist expressed dissatisfaction The Act’s Compromise on Oil and Gas drilling, Analysis of Schumer’s office Determined that climate mandates will reduce greenhouse gas emissions by 40 percent from 2005 levels by 2030. “It can’t get us all the way on its own, but it allows us to engage in the climate fight,” said Jesse Jenkins of Princeton University’s REPEAT program, which studies the impact of government policy on climate change, told NPR last month.
While most of the economic incentives for pursuing clean energy and mitigating climate change are aimed at companies, people who buy clean energy can receive rebates and tax credits, such as Heat Pumps and Rooftop Solar Panels. These measures aim to make clean energy more accessible to more people, although solar panels, for example, 2021 cost around $11,000 For home settings. The legislation also provides a $4,000 tax credit for low- and moderate-income drivers who buy used electric vehicles and up to $7,500 for new electric vehicle purchases.In addition, a study by Rhodium Group It is estimated that the bill’s provisions will save families an average of $1,025 per year through 2030.
Some funds are specifically targeted to low-income and disadvantaged communities. For example, legislation provides for an allocation of $1 billion to improve the energy efficiency of affordable housing.It also provides At least $60 billion in grants For projects such as improving air quality monitoring, improving transportation, deploying clean energy in poor and vulnerable communities, and enhancing public housing and climate resilience in tribal and Native Hawaiian communities.
While all these measures are in place, there is no doubt that environmental action and funding are insufficient. The bill provides far less than what is actually needed – a comprehensive system overhaul. It will take years to implement these plans and pay off in the form of lower greenhouse gas emissions, improved health in low-income communities, and improved clean energy infrastructure. However, it’s hard to deny that the IRA offers a glimmer of hope that it may begin to address some of the most pressing problems — including overwhelming health care costs and climate change.
“It took 19 hours. Or maybe 2 years. Or maybe 3 years, depending on how you do the math,” said Leah Stokes, professor of climate and energy policy at UC Santa Barbara Tweet on Sunday. “But the U.S. Senate has now passed an important climate bill. It’s a compromise. We need to stand with communities on the front lines against the fossil fuel industry. But in this moment, I’m celebrating.”
