Congress Passes Inflation Reduction Act To Address Climate Change, Rising Prices

Congress on Friday passed legislation that is being called the biggest climate investment in U.S. history and is also aimed at addressing inflation by lowering energy costs.

The Inflation Reduction Act is set to reduce carbon emissions by roughly 40 percent by 2030. The bill — deemed a scaled-back version of President Joe Biden’s previously proposed Build Back Better Bill — split the Senate in a 50-50 vote on Sunday, with Vice President Kamala Harris casting the tie-breaking vote that sent it to the House of Representatives.

The House on Friday afternoon passed the bill, with 220 Democrats voting yes and 207 Republicans voting no after hours of lengthy debates. It now awaits Biden’s signature to become law.

The estimated $740 billion package includes a number of Democratic priorities, including addressing climate change, lowering the costs of health care and taxing corporations. About half that amount, $300 billion, will go towards federal deficit reduction.

Over the next decade, approximately $369 billion will be invested into energy security and climate change programs. To incentivize lower and middle income families to transition to use clean energy to power their homes, the bill dedicates over $60 billion to tax credits that will lower home energy costs and make wind, solar, and electric technologies more affordable.

“This is a huge win for American families and I’m proud to support it,” U.S. Sen. Dianne Feinstein, D-California, said in a statement Sunday.

“This is the most significant climate change bill the Senate has ever considered. It will promote domestic clean energy manufacturing to create jobs at home while significantly reducing greenhouse gas pollution, both of which have long been priorities for me,” Feinstein said.

House Speaker Nancy Pelosi, D-San Francisco, said, “this bill includes historic investments to combat carbon pollution and slash energy costs — delivering the resources our nation needs to expand renewable energy sources, build energy efficient homes and get more clean vehicles on the road.”

The bill includes two provisions proposed by Feinstein — one for $4 billion in drought funding and the second offering consumers tax credits for purchasing electric vehicles. However, specific metal and battery requirements for automakers and household income restrictions may hinder the efficacy of the credits.

Another notable provision of the Inflation Reduction Act is that it will enforce a 15 percent minimum tax on large corporations that earn $1 billion and over annually, which is estimated to generate about $222 billion of the bill’s total revenue.

In terms of health care, the Inflation Reduction Act designates $64 billion to extend Affordable Care Act subsidies and allows Medicare to negotiate prices on 100 prescription drugs. This will particularly benefit the costs of medication for seniors, who will be provided with free vaccinations in addition to a $2,000 cap on pharmacy prescriptions and a $35 cap on single doses of insulin prices.

Rep. Anna Eshoo, D-Palo Alto, said, “The Inflation Reduction Act is transformational legislation because the effects of this bill will be felt by my constituents in the form of lower prescription drug prices, lower health care costs, lower energy costs, and substantial action on climate change…all without raising taxes on the middle class. I’m proud that Democrats got this bold plan over the finish line to deliver these improvements for the American people.”