The Senate on Sunday passed the Inflation Cut Act — a bill aimed at providing key funding for clean energy investments and measures to cut prescription drug costs, after an hours-long vote.
The marathon session, which began Saturday, continued until noon Sunday, as senators voted on a number of amendments to the 755 legislation pages, including a failed ruling by Senator Raphael Warnock (D-GA) that would have capped the cost of insulin products at $35 a month for those with private insurance. However, despite the bill’s fraught journey and many compromises, there are some victories that should have a tangible impact on the average American.
On Saturday, Vice President Kamala Harris cast the deciding vote to launch a full day of debate on the bill — as well as several last-minute amendments being rolled out to Republican senators. Senator Joe Manchin (D-WV) warned his fellow Democratic caucuses not to fall into “mock amendments” from Republican senators, as no Republican planned to vote for the IRA under any circumstances.
Despite this, my R friends have made it clear that they are completely unwilling to back this bill under any circumstances. None of their modifications will change that. For this reason, I will vote to protect the integrity of the IRA regardless of the content of their fictitious amendments.
Senator Joe Manchin (@Sen_JoeManchin) August 7, 2022
For most of Sunday, the Democratic bloc seemed to follow his warning by voting against the Republican amendments — and in this respect, any amendment could upset the balance of the carefully calibrated bill. This included those by Senator Bernie Sanders (I-VT). Sanders stood alone on proposed amendments to reinstate the children’s tax credit and ensure that Medicare drug costs would not exceed what the Department of Veterans Affairs pays for the same drugs, CQ Roll Call has been reported.
The legislation is a shortened version of the Building Back Better Act, the Democrats’ ambitious agenda to fund health care, education and clean energy that Manchin actually killed in December. Manchin announced on Fox News that he would not vote on the legislation as it was at the time due to concerns about entrenched inflation. in time, Mansion released a statement Saying that the real cost of the BBB would far exceed its initial $1.5 trillion price, he expressed concerns about the national debt.
“My fellow Democrats in Washington are determined to dramatically reshape our society in a way that makes our country more vulnerable to the threats we face,” he wrote at the time. “I can’t take that risk with a staggering $29 trillion in debt and real and harmful inflation taxes for every American who works hard at gas pumps and groceries and utility bills with no end in sight.”
Manchin’s December announcement meant those priorities were nearly dead until late July of this year, when Manchin announced that he and Senate Majority Leader Chuck Schumer had reached a deal to pass a watered-down version of the IRA-Reconciliation Bill. Manchin reportedly agreed in exchange for Schumer’s promise that Congress would try to speed up the authorization process for projects under the Clean Water Act, which could allow developers to build pipelines more easily, Bloomberg Law mentioned.
what does this do truly mean inflation?
There are many different actions restricted in this law as a way to pass some of the Biden administration’s priority legislation. However, it he is It’s called the Limit Inflation Law, so how will it affect the decades-high inflation numbers that consumers feel at the grocery store and the gas pump?
As economists told Vox’s Li Zhou last week, the average American likely won’t feel the impact immediately or particularly — its impact will be in the long run in a macroeconomic sense.
“For the most part, this is not a bill for 2022,” Mark Goldwyn, said Vox’s senior policy director for the Responsible Federal Budget Committee. This is around 2023, 2024, and 2025. It’s about helping the Federal Reserve fight persistent inflation. This will not bring down the inflation rate in September.”
Shai Akabas, director of economic policy at the Bipartisan Policy Center, explained that “policy makers can’t do much, certainly on a legislative basis, to affect inflation overnight. That is basically the job of the Federal Reserve.” The Federal Reserve raises interest rates, which raises the cost of borrowing money to slow spending, but any decision the central bank makes about fiscal policy will also take time to affect the system as a whole. And as Vox’s Emily Stewart points out, that’s likely to be painful for consumers in the short term — the cost of mortgages and credit card debt will rise, employment will likely slow, and there’s also the imminent possibility of a recession. However, this is all in the hope of establishing a more stable economy in the future.
There are some measures in law to ease the burden of inflation when it comes to fuel and energy costs. Fuel prices were already high due to global inflation when Russia invaded Ukraine in February, and subsequent sanctions on Russian fuel exacerbated those price increases, even though the price of a gallon of gas has fallen. This is partly due to federal measures Like releasing oil from Strategic Petroleum ReserveThe bill contains measures to open up drilling and fast-track pipelines to increase available supply – and thus lower costs for the average consumer.
In addition, the bill would allow Medicare to negotiate cheaper prescription drug prices for some expensive drugs and cover out-of-pocket prescription costs for Medicare beneficiaries in the amount of $2,000 annually. This unprecedented measure will reduce the cost to consumers. Another measure requires drug companies to pay a discount to Medicare if they raise drug prices faster than inflation increases, NPR reported Friday These companies are likely to be discouraged by frequent price increases.
Despite the healthcare boom, the The Senate is still voting on a procedure Require private insurance companies to cover out-of-pocket insulin costs of $35 per month.
The law’s non-inflationary measures are also great
The IRA may not immediately push prices back to pre-Covid levels, which is a far cry from the Democrats’ initial plans to build back better, but it does represent some important steps forward to deal with prohibitive healthcare costs and the existential threat of climate change.
In addition to cementing Medicare’s new negotiating power, the bill also includes insurance subsidies for the Affordable Care Act through 2025, making health insurance more affordable for millions of insured people through the health care market. Initial benefits were supposed to end this year, which would have meant increased premiums for millions of people eligible for free health insurance when Congress eliminated the income cap for qualifying for premium-paying federal assistance.
The IRA also includes the largest-ever investments in climate change mitigation efforts, clean energy production, and climate justice programs, all designed to mitigate the adverse effects of climate change in disadvantaged regions.
despite Climate activists They expressed their frustration with Bill concessions on oil and gas drilling, Analysis from Schumer’s office I decided that climate provisions would cut greenhouse gas emissions by 40 percent from 2005 levels by 2030. “It doesn’t get us there on its own, but it keeps us in the climate battle,” Jesse Jenkins of the REPEAT project at Princeton University who studies the impact of government policy on Climate change , He told NPR last month.
While much of the financial incentives for the pursuit of clean energy and climate change mitigation are geared toward businesses, there are deductions and tax credits available to people who buy clean energy sources such as Rooftop heat pumps and solar panels. These measures aim to make clean energy more available to more people, though solar panels, for example, Cost about $11,000 in 2021 for home settings. The legislation also provides a $4,000 tax credit to low- and middle-income drivers for the purchase of a used electric vehicle, and up to $7,500 for a new electric vehicle. In addition, a study by rhodium group He estimates that the law’s provisions will save families an average of $1,025 annually by 2030.
Some of the funding is specifically directed at low-income and vulnerable communities. For example, the legislation identified $1 billion in grants to improve energy efficiency in affordable housing. It also provides At least $60 billion in grants For projects such as improving air quality monitoring, improving transportation, and spreading clean energy in poor and vulnerable communities, as well as promoting climate resilience in public housing, tribal and indigenous Hawaiian communities.
Although all these measures are in place, there is no doubt that environmental measures and financing are insufficient. The bill saves much less than what is actually needed – an overhaul of the system. It will be years before these programs are implemented and pay off in the form of lower greenhouse gas emissions, better health outcomes for low-income communities, and improved clean energy infrastructure. However, it is hard to deny that the IRA provides a glimmer of hope that it is possible to start tackling some of the most pressing problems – including prohibitive healthcare costs and climate change.
“It took 19 hours. Or maybe 2 years. Or maybe 3 decades, depending on how you calculate it,” Leah Stokes, professor of climate and energy policy at the University of California, Santa Barbara Tweet Sunday. But the US Senate has now passed a major climate bill. It was a compromise. We need to stand with the frontline communities against the fossil fuel industry. But for the moment, I’m celebrating.”