But Democrats hope to capitalize on the win, emphasizing that they have delivered on long-held promises, even though it might take years to see the benefits from some of the longer-term proposals.
What’s in the Inflation Reduction Act
What’s in the Inflation Reduction Act
A substantive legislation. The $370 billion climate, tax and health care package that Congress approved on Aug. 12 might have far-reaching effects on the environment and the economy. Here are some of the key provisions:
What’s in the Inflation Reduction Act
Auto industry. Until now, taxpayers might 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.
What’s in the Inflation Reduction Act
Energy industry. The bill would provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances. Companies would get tax credits for building new sources of emissions-free electricity. The package also includes $60 billion set aside to encourage clean energy manufacturing and penalties for methane emissions that exceed federal limits starting in 2024.
What’s in the Inflation Reduction Act
Health care. For the first time, Medicare would be allowed to negotiate with drugmakers on the price of some prescription medicines. The bill would also extend subsidies available under the Affordable Care Act, which were set to expire at the end of the year, for an additional three years.
What’s in the Inflation Reduction Act
Tax code. The bill would introduce a new 15 percent corporate minimum tax on the profits companies report to shareholders, applying to companies that report more than $1 billion in annual income but are able to use credits, deductions and other tax treatments to lower their effective tax rates. The legislation would bolster the I.R.S. with an investment of regarding $80 billion.
What’s in the Inflation Reduction Act
Low-income communities. The package includes over $60 billion in support of low-income communities and communities of color that are disproportionately burdened by climate change. Among the provisions are grants for zero-emissions technology and money to mitigate the negative effects of highways and other transportation facilities.
What’s in the Inflation Reduction Act
Fossil fuels industry. The legislation would require the federal government to auction off more public space for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. These provisions are among those that were added to gain the support of Senator Joe Manchin IIIDemocrat of West Virginia.
What’s in the Inflation Reduction Act
West Virginia. The law is expected to bring big benefits to Mr. Manchin’s statethe nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives to build wind and solar farms in areas where coal mines or coal plants have recently closed.
“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 inflationthough modestly and not immediately.)
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The bill falls far short of the $2.2 trillion Build Back Better Act, which Ms. Pelosi wrangled to passage in the House in November. That bill included far more substantial changes to the tax code, as well as billions of dollars to create a federal paid leave program, provide support for most families with children, and expand housing, home care and public education. The social spending plan’s fate was initially tied to passage of the $1 trillion bipartisan infrastructure law, and it teetered repeatedly on the brink of failure, as centrists in the Democratic Party demanded that the party whittle it down.
But the package stalled in the Senate a month later, when Senator Joe Manchin III of West Virginia, a centrist Democrat, rejected it as exorbitant and walked away from talks. Though negotiations between Mr. Manchin and Senator Chuck Schumer, Democrat of New York and the majority leader, resumed this spring, they faltered once more last month, leaving Democrats to grapple with the prospect of enacting just a health care package.