The Democrats’ massive tax and spending bill has cleared Congress, with the House giving final approval to the $740 billion bill along party lines and sending it to President Biden for his signature.
The sprawling legislation’s passage, which caps more than a year of talks to secure support from Democratic Sen. Joe Manchin III of West Virginia, marks a major win for Mr. Biden’s agenda on climate, health care and taxes.
The vote on Friday was 220-207. The legislation previously passed the split Senate 51-50 along party lines, with Vice President Kamala Harris casting the tie-breaking vote.
The legislation, which Democrats named the Inflation Reduction Act, includes a record amount of spending to combat climate change — roughly $375 billion over the next decade — and provisions that Democrats say will lower health care costs and hold wealthy tax cheats accountable.
It includes extending Obamacare subsidies for three years, capping seniors’ prescription drug costs, and giving the IRS more funding for tax enforcement.
House Speaker Nancy Pelosi, California Democrat, said during her weekly presser that the legislation will make “a difference at the kitchen table, and at the boardroom table, corporations and the wealthy will now have to pay their fair share.”
She noted: “This legislation is stark, it’s transformative and it’s really a cause for celebration.”
She later said on the floor, “Our Inflation Reduction Act is a robust cost-cutting package that meets the moment ensuring that our families thrive and that our planet survives,” she said.
“What it means to you, to our constituents to people out there whom we serve, in terms of health care is If you’re one of Medicare’s 64 million enrollees, this bill brings down the out-of-pocket costs and prescription drugs. We do this by empowering the secretary of HHS to negotiate lower prices.”
House Republicans, who dubbed the bill the “Inflation, Recession and IRS Army Act,” worked against the legislation that they argue will exacerbate the rising costs of everyday goods, worsen an economy considered to be teetering on the edge of a recession and dole out wasteful clean energy tax credits.
Economists say the legislation would have a minimal impact on reducing the high rate of inflation that is battering Americans.
House Minority Leader Kevin McCarthy, California Republican, criticized the many Democrats who voted by proxy, noting that the floor of the House was “nearly empty.”
“I look forward to every Democrat who votes for this bill, be it in person or how they phone it in by proxy. How do they explain to their constituents this winter when they’re making a choice about whether they pay the energy to heat their homes, or they cut back on the gas to fill their tank, or they no longer even buy?” he said. “You’re gonna mail it in because you’re just gonna vote by proxy. You’re gonna pass a bill, you never debated, but people voting by proxy, you going to double the size of the IRS.”
Despite the Democrats’ razor-thin majority in Congress, the party was able to rally its caucus around the bill to pass it through a budget process that circumvented the Senate’s 60-vote threshold to get it across the finish line without a single Republican vote. With less than three months before the midterm elections, Democrats are hoping that the legislative victory can energize their base and stave off a red wave in November.
Republicans also plan to campaign on the bill by highlighting its provisions to beef up the IRS, a cap on certain drug costs that they argue could stifle medical research, and new corporate taxes whose effects could trickle down to low- and middle-income Americans.
The Inflation Reduction Act includes:
• $375 billion for climate change over the next 10 years, including tax credits for the production of wind, solar, nuclear power and carbon capture technology, and fees on methane leaks from oil and natural gas drilling. $30 billion for wind and solar tax production tax credits, tax credits for nuclear power and carbon capture technology, and a new fee on excess methane emissions from oil and natural gas drilling.
• A 10-year consumer tax credit for renewable energy expenses on wind and solar, plus tax credits of $7,500 for purchasing a new electric vehicle and $4,000 for a used electric vehicle for those who make under $150,000 and for vehicles under certain sticker prices.
• $64 billion for three years of Obamacare subsidy extensions.
• A new 15% corporate minimum tax on about 200 companies that earn more than $1 billion annually and have avoided paying the standard 21% tax rate.
• A $35 insulin cap for Medicare and a $2,000 out-of-pocket cap for older adults’ prescription drugs.
• An estimated $300 billion in deficit reduction over 10 years.
During Friday afternoon’s debate on the House floor, Democrats predicted that the clean energy provisions would slash greenhouse gas emissions by 40% from 2005 levels by 2030 and Republicans said the legislation would overburden Americans with higher taxes and an aggressive IRS.
“President Biden is violating his own pledge not to raise taxes on middle-class Americans. He’s denying that truth. Yesterday House Democrats insisted there are no new IRS agents funded in this bill. Read their lips. No new IRS agents,” said Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee.
“They say it’s all fear mongering, they’re just hiring replacements. Unfortunately, the fact is the IRS budget already budgets for those who are leaving through attrition. And the Treasury Department itself outlines the next decade of adding 87,000 new IRS agents. That’s what this bill unleashes.”
Rep. Richard E. Neal, Massachusetts Democrat and chairman of the Ways and Means Committee, swiped back at Republicans’ assertion about the 87,000 additional IRS agents.
“This is misinformation about the IRS. They need the funding to better serve the American people,” Mr. Neal said. “The idea that all of a sudden there’s an army of IRS agents that are coming after the American family doesn’t stand up under the magnifying glass of critical analysis.”
Mr. Manchin secured assurances from Democratic leaders during negotiations that the party will overhaul the country’s energy permitting process in the coming weeks, which both the fossil fuel and clean energy industries have said is desperately needed to cut red tape that bogs down domestic energy production.
Mr. Manchin, whose home state is one of the largest coal and natural gas producers in the country, also wrested several other energy plums from Democrats in exchange for his support, including a long-sought $6.6 billion natural gas West Virginia pipeline and new federal government lease sales for oil and natural gas drilling.
The oil and natural gas industry pushed Congress to oppose the legislation over new taxes on the industry that would amount to billions of dollars over the next decade.
“We share the goal of addressing climate change, as evidenced in the policies we support and in the actions that we take every day,” dozens of trade groups wrote in a letter led by the American Petroleum Institute to House leaders. “However, the considerable tax increases and new government spending in the IRA amount to the wrong policies at the wrong time.”
• Kerry Picket can be reached at kpicket@washingtontimes.com.
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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