The Inflation Reduction Act of 2022 passed the Senate Sunday on a party-line vote, prompting celebration from Democrats, who view the sweeping budget reconciliation package as a major legislative victory.
WHERE’S THE MONEY GOING?
Here are some of the key provisions in the mammoth 755-page bill, which authorizes $430 billion in spending.
CLIMATE CHANGE: The IRA will invest $400 billion over 10 years in tax credits encouraging consumers to buy electric vehicles and utility companies to invest in “sustainable” energy sources like wind and solar. The credits include:
- $30 billion for solar panel, wind turbine and battery production and critical minerals processing.
- $10 billion for electric vehicle and solar panel factories.
- $60 billion helping places disproportionately affected by climate change, including $27 billion for a “green bank” for investing in clean energy.
TAX REFORM: The bill contains $80 billion in new funding to the IRS to strengthen the agency’s enforcement arm, which Democrats claim will increase revenues and help pay for the IRA.
- The act creates a 15% minimum corporate tax on large, publicly traded firms — which has stirred up controversy among critics who think the economy is in recession.
HEALTH CARE: The IRA extends the 2021 American Rescue Act’s funding for Obamacare subsidies to the tune of $64 billion over three years.
- It also enables the federal health secretary to negotiate drug prices directly with manufacturers for Medicare.
Republicans in Congress say the IRA fails to live up to its name.
- GOP Senators have pointed to the Congressional Budget Office’s analysis, which determined the bill would have a “negligible” effect on inflation.
- They’ve also expressed concern about the effect of increased government spending on the economy and the IRS funding being used to target everyday Americans.
- “Today, Democrats once again tried to spend their way out of the inflation caused—ironically—by their reckless spending,” Sen. Tim Scott, R-S.C., said in a statement Sunday. “With inflation raging and our economy heading into a recession, Democrats still chose to spend money we don’t have on things Americans don’t need — and didn’t ask for. Make no mistake: This bill will increase tax burdens on generations of Americans.”
Meanwhile, Senate Republicans have been joined in their opposition to the IRA by an unlikely ally: democratic socialist Sen. Bernie Sanders, I-Vt.