House Passes Sweeping Climate, Tax and Health Care Package

Source: By Emily Cochrane, New York Times • Posted: Sunday, August 14, 2022

House Passes Sweeping Climate, Tax and Health Care PackageThe passage of the bill, which appeared dead just weeks ago, caps a Democratic effort to deliver on major components of President Biden’s agenda.

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House Democrats overcame Republican opposition to pass legislation that would cut prescription drug costs and invest billions in efforts to combat global warming.Anna Rose Layden for The New York Times

WASHINGTON — Congress gave final approval on Friday to legislation that would reduce the cost of prescription drugs and pour billions of dollars into the effort to slow global warming, as House Democrats overcame united Republican opposition to deliver on key components of President Biden’s domestic agenda.

With a party-line vote of 220 to 207, the House agreed to the single largest federal investment in the fight against climate change and the most substantial changes to national health care policy since passage of the Affordable Care Act. The bill now goes to Mr. Biden for his signature.

The legislation would inject more than $370 billion into climate and energy programs aimed at helping the United States cut greenhouse gas emissions by an estimated 40 percent below 2005 levels by the end of the decade. It would also extend for three years subsidies to help people afford insurance under the Affordable Care Act, as well as fulfill a long-held Democratic goal to lower the cost of prescription drugs by allowing Medicare to directly negotiate prices and capping recipients’ annual out-of-pocket drug costs.

The package would be financed largely by tax increases, including a new tax on company stock buybacks and a 15 percent corporate minimum tax for wealthy companies. Initial analyses of the legislation found that it could reduce the nation’s deficit by as much as $300 billion over a decade.

It is most likely the last major legislative package to become law before the November elections, handing Democrats a significant victory before they defend their narrow congressional majorities. The vote came just days after Mr. Biden signed both a $280 billion industrial policy bill that will shore up America’s chip manufacturing in an effort to better compete with China and legislation that will expand medical benefits for veterans exposed to trash fires that burned on military bases, the latest in a string of legislative successes.

“Today is really a glorious day for us,” Speaker Nancy Pelosi, Democrat of California, said on Friday. She declared that “this legislation is historic, it’s transformative and it is really a cause for celebration.”

Republicans slammed the bill, saying it was excessive and too expensive at an uncertain economic moment. Representative Kevin McCarthy, Republican of California and the minority leader, used a nearly hourlong speech on the House floor to make the case for electing a Republican majority that would work to undo the policies.

“I urge my colleagues to remember this day — remember this day because it will be the last time the House operates so recklessly and irresponsibly,” he said.

Torunn Sinclair, a spokeswoman for House Republicans’ campaign arm, said that “vulnerable Democrats continue to show voters they have no clue how to fix the economic disaster they created.”

But Democrats hope to capitalize on the win, emphasizing that they have delivered on long-held promises, even though it could take years to see the benefits from some of the longer-term proposals.

What’s in the Inflation Reduction Act

Auto industry. Until now, taxpayers could get up to $7,500 in tax credits for purchasing an electric vehicle, but there was a cap on how many cars from each manufacturer were eligible. The new law would eliminate this cap and extend the tax credit until 2032; used cars will also qualify for a credit of up to $4,000.

“They’re seeing Democrats as the party that’s actually getting this stuff done and everyone else is trying to start a culture war or attacking the F.B.I.,” said Representative Tim Ryan, an Ohio Democrat who is running for the Senate. “The contrast in the last few months is becoming very stark.”

Approval of the legislation capped an arduous stretch of negotiations for Democrats. With Republicans unanimously opposed, Democrats focused on their own ranks and worked to find a compromise that would not only appease a left flank eager to pass an expansive plan that would transform the nation’s social safety net, but that also would secure the votes of key centrist holdouts reluctant to endorse billions in new spending as inflation climbed.

Democrats used the fast-track budget reconciliation process to navigate the legislation through both chambers, allowing them to sidestep the filibuster — the same tactic they used last year with the $1.9 trillion pandemic aid package. Cut entirely out of the process, Republicans fumed that the climate and health bill would do little to address inflation and criticized it for raising taxes and federal spending. (Many economists agree the bill is likely to dampen inflation, though modestly and not immediately.)