Democrats gave President Joe Biden a big win for his economic and environmental agenda Friday as the House passed a sweeping bill to fight climate change, make seniors’ drugs cheaper and boost taxes on corporations.
The 220-207 party-line vote was never much in doubt. The next stop is the White House for Biden to sign it into law.
Friday’s vote marked the end of a legislative journey that started last year as Biden looked to boost social spending and deal with climate change. The bill, dubbed the Inflation Reduction Act, is also congressional Democrats’ capstone argument to take to voters in November to retain control of Congress.
The bill’s passage comes amid some hopeful signs for Democrats on the midterm elections front. They’ve seen a string of recent legislative victories, and Biden’s approval numbers have edged up. In addition, there are signs the Supreme Court decision overturning Roe v. Wade has energized the party’s base.
The bill was sharply pared back from the “Build Back Better” bill that passed the House last year and was stalled by Sen. Joe Manchin (D-W.Va.) because he said it was too expensive. But after Manchin and Senate Majority Leader Chuck Schumer (D-N.Y.) reached a deal on the new, slimmed down bill — now without much in the way of direct social spending — the Senate passed it after a marathon series of votes that ended Sunday.
House Speaker Nancy Pelosi (D-Calif.), speaking to reporters before the bill’s passage, called it “monumental.”
House Speaker Nancy Pelosi called the Inflation Reduction Act a “monumental” bill.
Chip Somodevilla via Getty Images
Essentially, the bill takes new revenues from a 15% corporate minimum tax and extra revenues derived from increased IRS tax enforcement, adds in money saved from having Medicare negotiate prices with drugmakers, and then spends hundreds of billions on tax breaks to boost clean energy and to extend for three years subsidies for Obamacare insurance plans.
The Congressional Budget Office had estimated a previous version of the bill would cut about $90 billion from the budget deficit over 10 years. But after changes made in the Senate to the tax and prescription drugs portions, the CBO said it may take a while to rescore the bill. The changes were expected to trim the savings only slightly.
Democrats also claim another $200 billion in deficit reduction from tougher tax enforcement.
Unlike the Senate’s consideration, the House debate was quick and relatively respectful, as lawmakers had to interrupt their August break to come and vote on the bill. (Many voted by proxy, allowing them to skip the trip entirely.)
In a likely preview of how the campaign season debate over the bill will play out, Republicans took aim at the claim the bill would cool inflation and at the effort to beef up the IRS. Democrats touted its environmental and health care impacts.
“If the Green New Deal and corporate welfare had a baby, it would look like this”
– Rep. Kevin Brady (R-Texas)
“If the Green New Deal and corporate welfare had a baby, it would look like this,” said Rep. Kevin Brady (Texas), the top Republican on the House Ways and Means Committee.
Inflation, even though it held steady in July, increased by 8.5% from the previous year, and Brady said the bill would do little to ease price pressures, something independent experts have also said.
“By opposing this bill, Republicans are making it very clear where they stand: not with the American people. Not with their priorities or needs — but with Big Pharma. With corporate lobbyists. With tax cheats,” said House Budget Chairman John Yarmuth (D-Ky.).
The IRS’s most recent estimate of the rate of tax compliance was 83.6%, resulting in $441 billion in taxes that were owed each year but not paid on a timely basis.
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