President Joe Biden on Tuesday will sign Democrats’ sweeping climate, health care and tax reform bill into law, the culmination of months of negotiations over which parts of the president’s domestic agenda would make it into a final package.
The Inflation Reduction Act — which received its final Congressional stamp of approval in the House on Friday — includes a historic near $375 billion for climate change, would lower prescription drug costs, extend pandemic health care subsidies and impose a new minimum corporate tax. The $740 billion package also includes $300 billion to pay down the federal deficit.
Biden will fly back from a family vacation in South Carolina on Tuesday to sign the bill before leaving Wasington once again for the Delaware leg of his vacation.
The IRA is an evolved and scaled-down version of Biden’s former $3.5 trillion vision for his agenda, known as the Build Back Better framework, which also included programs such as universal pre-school and free community college.
But the bill that made it to the finish line still includes the biggest investment in fighting climate change in history, a landmark effort to lower drug prices that Democrats long fought for, and taxes on the wealthiest businesses, all of which Biden has pushed for since the campaign trail.
The president on Friday called it a win for the American people and a loss for “special interests.”
“Families will see lower prescription drug prices, lower health care costs, and lower energy costs,” he said on Twitter.
The IRA’s passage was the culmination of a month of wins for the president that also included a drop in gas prices and the passage of bipartisan bills to boost the domestic chip industry and expand veterans’ health care.
The package came together after West Virginia Sen. Joe Manchin quietly came back to the negotiating table with Majority Leader Chuck Schumer. Manchin insisted on a deal that would focus on bringing costs down instead of adding to the country’s record inflation.
It passed in the Senate with all 50 Democrats — and no Republican — supporting it.
Analysis finds the bill could do little to really impact inflation in the short term, even if it lowers some Americans’ costs, such as for prescriptions.
Republicans have said the multibillion-dollar package would instead contribute to higher prices.
“Democrats, more than any other majority in history, are addicted to spending other people’s money, regardless of what we as a country can afford,” Minority Leader Kevin McCarthy, R-Calif., said on the House floor last week.
One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.
It’s a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.
The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade.
There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade.
