The $739 billion tax increase, climate change, and healthcare bill that the House Democrats approved Friday was a major boost for President Biden’s domestic agenda at a time when inflation is high and presidential approval ratings are low. The House approved the legislation in a 220 to 207 vote. Despite opposition from all Republicans, every Democrat supported it. Only three Republicans did not vote.
“Today is truly a glorious day” said Nancy Pelosi (D-Calif), House Speaker.
Republicans opposed the bill vehemently, arguing that its provisions would worsen the U.S. economic situation and impose new costs on American workers.
“Remember this date,” said Kevin McCarthy, R-Calif. House Minority Leader.
After passing the Senate, the legislation now goes to the president. He is expected to sign it soon. This is a victory for Biden, who has had a turbulent White House tenure that has seen 40-years of high inflation, recession and sinking poll numbers.
Steny Hoyer (D-MD), House Majority Leader, stated that “this bill reflects many of what we wanted – not all we wanted – but it is very significant step forward.” It will reduce the deficit, lower the costs, expand access to affordable healthcare, and make the largest investment in history to address global climate change.
Shortly after Biden was elected, Democrats began work on the bill. The legislation, originally called Build Back Better was intended to be a bold overhaul of the nation’s economy and climate infrastructure.
This version of the legislation, which had a cost of more than $3.5 trillion was unable to be financed by the 50-50 Senate.
Particularly Sen. Joe Manchin refused to support last year’s bill due to concerns that it would increase inflation. Because of the widespread GOP opposition, the only way the bill could be passed through the Senate was through a party-line process called budget reconciliation.
Despite Manchin’s resistance, Senate Majority Leader Chuck Schumer (D-N.Y.) worked to revive the package. The Inflation Reduction Act was born out of the private negotiations between Schumer, Manchin.
Medicare will be able to negotiate the prices of certain life-saving prescription drugs beginning in 2023, according to the bill. Democrats claim that the move will help save $288 billion for the government over the next ten years.
Rep. James McGovern (D-MA) stated that “Democrats have been fighting for decades to lower drug prices. This bill lets Medicare negotiate and work with drug companies. “It caps out-of-pocket insulin costs at $35 for Medicare recipients… If you are on Medicare, you won’t have to spend more than $2,000 per year for your prescriptions.”
Manchin-Schumer’s bill also imposes 15% minimum tax on corporations. This move is expected to raise $313 billion. Democrats claim that by investing in the Internal Revenue Service, they can also save $124 billion.
The bill would raise $739 billion overall. The bill proposes to raise $739 billion. $369 billion will go to climate change subsidies. This is to help Biden achieve his goal of reducing greenhouse gas emissions by 40% by 2030. An additional $64 billion will be used to expand ObamaCare subsidies.
The deficit will be paid with the rest of the revenue, which is more than $300 billion.