After negotiation and passage by the Senate, the Inflation Reduction Act heads to the House for final approval. Many would expect this legislation to focus more closely on the skyrocketing costs of consumer goods as a result of inflation. However, inclusions focused on battling climate change and reducing the federal deficit make this package much more sweeping than a simple inflation-busting measure would be. The Inflation Reduction Act represents President Biden’s economic agenda as a whole.
The particulars of this economic package show just how ambitious it is. For example, the Inflation Reduction Act pledges $370 billion toward reducing greenhouse gas emissions to less than half of their levels in 2005. Some elements of the proposal would provide direct economic relief to Americans, however. Reform to prescription drug costs would limit Medicare recipients to paying $2,000 annually, finally allowing the government to negotiate the cost of medication directly. Not only could this mean billions of dollars of savings for the U.S. government over the next 10 years, but even Americans who don’t have Medicare may also benefit from drug price negotiations.
Other citizens will benefit from measures that prevent the increase in healthcare insurance premiums that would otherwise occur next month when a component of one of Biden’s emergency COVID-19 bills expires. Approximately 13 million Americans who purchased coverage from state or federal marketplaces will continue to qualify for savings.
Rather than increasing taxes for everyday citizens, large corporations will foot much of the bill through tax hikes. Because the Inflation Reduction Act aims to close tax loopholes that have allowed these billion-dollar companies to escape paying their fair share, some companies may finally have to contribute to the economy from which they have long benefited.
Although the Senate Majority leader Charles E. Schumer (D-N.Y.) has called the Inflation Reduction Act “one of the most significant pieces of legislation passed in a decade,” Democrats had to make compromises to get the bill passed in the Senate. The original proposal included free pre-k education and paid family and medical leave for American workers. Republican lawmakers also removed verbiage that would lower the price of insulin. Vermont Senator Bernie Sanders has criticized the modified bill as he argued for expanded Medicare coverage for dental and vision healthcare.