Rep. Kathy Castor, D-Fla., left, speaks about the climate crisis and the Inflation Reduction Act during a news conference on Capitol Hill in Washington, Friday, Aug. 12, 2022.
AP Photo | Susan Walsh
WASHINGTON (AP) — Democrats pushed their flagship climate change and health care bill toward House passage Friday, placing President Joe Biden on the brink of a back-from-the-dead triumph on his leading domestic goals that the party hopes will energize voters going into November’s elections.
The narrowly divided House was poised to approve the legislation, which is but a shadow of the larger, more ambitious plan to supercharge environment and social programs that Biden and his party envisioned early last year. Even so, Democrats were thirsty to declare victory on top-tier goals such as providing Congress’ largest ever investment in curbing carbon emissions, reining in pharmaceutical costs and taxing large companies and show they can wring accomplishments out of a frequently gridlocked Washington that disillusions many voters.
Rep. Hakeem Jeffries, D-N.Y., called the measure “another transformative bill brought to you by your friendly neighborhood Democratic Party.” Rep. Pramila Jayapal, D-Wash., a leading progressive, said Democrats would further bolster child care, housing and Medicare if they win larger majorities in Congress, but that “today, let’s celebrate this massive investment for the people.”
Republicans were set to solidly oppose the legislation, calling it a cornucopia of wasteful liberal daydreams that would raise taxes and families’ living costs. They did the same Sunday but Senate Democrats banded together and used Vice President Kamala Harris’ tiebreaking vote to power the measure through that 50-50 chamber.
“Democrats believe they can spend their way out of inflation and tax their way out of recession,” said Rep. Jason Smith, R-Mo. “It will only make the suffering Americans face today that much worse.”
Biden’s initial 10-year, $3.5 trillion proposal also envisioned free prekindergarten, paid family and medical leave, expanded Medicare benefits and an easing of immigration restrictions. That crashed after centrist Sen. Joe Manchin, D-W.Va., said it was too costly, using the leverage every Democrat has in that evenly-divided Senate.
Still, the final legislation remained substantive. Its pillar is about $375 billion over 10 years to encourage industry and consumers to shift from carbon-emitting to cleaner forms of energy. That includes $4 billion to cope with the West’s catastrophic drought.
Spending, tax credits and loans would bolster technology like solar panels, consumer efforts to improve home energy efficiency, emission-reducing equipment for coal- and gas-powered power plants and air pollution controls for farms, ports and low-income communities.
Another $64 billion would help 13 million people pay premiums over the next three years for privately bought health insurance. Medicare would gain the power to negotiate its costs for pharmaceuticals, initially in 2026 for only 10 drugs. Medicare beneficiaries’ out-of-pocket prescription costs would be limited to $2,000 starting in 2025, and as of next year would pay no more than $35 monthly for insulin, the costly diabetes drug.
The bill would raise around $740 billion in revenue over the decade, over a third from government savings from lower drug prices. More would flow from higher taxes on some $1 billion corporations, levies on companies that repurchase their own stock and stronger IRS tax collections. About $300 billion would remain to defray budget deficits, a fraction of the period’s projected total of $16 trillion.
The GOP focused some of its most incendiary criticism on the bill’s boost to the IRS budget, aimed at collecting an estimated $120 billion in unpaid taxes over the coming decade. They have misleadingly claimed the measure would be used to hire 87,000 agents who would target average families.
Smith said the agency would “target and audit more middle-class families and snoop into their bank accounts.” Some Republicans have gone further, with Sen. Chuck Grassley, R-Iowa, asking Thursday on “Fox and Friends” if there would be an IRS “strike force that goes in with AK-15s already loaded, ready to shoot some small business person.”
Few IRS personnel are armed, and Democrats say the bill’s $80 billion, 10-year budget increase would be to replace waves of retirees, not just agents, and modernize equipment. They have said typical families and small businesses would not be targeted, with Treasury Secretary Janet Yellen directing the IRS this week to not “increase the share of small business or households below the $400,000 threshold” that would be audited.
Republicans say the legislation’s new business taxes will increase prices, worsening the nation’s bout with its worst inflation since 1981. Though Democrats have labeled the measure the Inflation Reduction Act, nonpartisan analysts say it will have negligible impact on prices one way or the other.
The GOP also says the bill would raise taxes on lower- and middle-income families. An analysis by Congress’ nonpartisan Joint Committee on Taxation, which didn’t include the bill’s tax breaks for health care and energy, estimated that the corporate tax boosts would marginally affect those taxpayers, partly due to lower stock prices and wages.
The bill caps a fertile three months in which Congress has voted to improve veterans’ health benefits, gird the semiconductor industry, moderately strengthen gun restrictions for younger buyers, finance Ukraine’s war with Russia and add Finland and Sweden to NATO. All passed with bipartisan support, suggesting Republicans also want to display their productive side.
It’s unclear whether voters will reward Democrats for the legislation after months of painfully high inflation dominating voters’ attention and Biden’s dangerously low popularity with the public and a steady history of midterm elections that batter the party holding the White House.
The bill had its roots in early 2021, after Congress approved a $1.9 trillion measure over GOP opposition to combat the pandemic-induced economic downturn. Emboldened, the new president and his party reached further.
They called their $3.5 trillion plan Build Back Better. Besides social and environment initiatives, it proposed rolling back Trump-era tax breaks for the rich and corporations and $555 billion for climate efforts, well above the resources in Friday’s legislation.
With Manchin opposing those amounts, it was sliced to a roughly $2 trillion measure that Democrats moved through the House in November. Manchin unexpectedly sank that bill too, earning scorn from exasperated fellow Democrats from Capitol Hill and the White House.
With on-and-off closed-door talks between Manchin and Senate Majority Leader Chuck Schumer, D-N.Y., seemingly dying, the two lawmakers shocked Washington and announced agreement last month on the new, pared-down package.
Manchin won billions for carbon capture technology for the fossil fuel industries he champions, plus procedures for more oil drilling on federal lands and promises for faster energy project permitting. Centrist Sen. Kyrsten Sinema, D-Ariz., also won concessions, eliminating planned higher taxes on hedge fund managers and helping win the drought funds.
