Connect with us

Hi, what are you looking for?

United States

A Detailed Picture of What’s in the Democrats’ Climate and Health Bill

Democrats in Congress have had to scale back their legislative ambitions since last year, but the Inflation Reduction Act, passed by the House on Friday and sent to President Joseph R. Biden Jr. for his signature, is still a substantial piece of legislation, which will make big investments in the environment and health care, and increase taxes on some key groups.

*These are rough estimates because of changes to the drug price provisions in the bill after cost and savings estimates were released. Savings from the drug price negotiation policy may end up being lower, and the savings from limits on drug price increases are unofficial estimates based on an analysis by Don Schneider, a former chief economist of the House Ways and Means Committee.

Figures are in billions and over 10 years.

The bill includes policies lowering the prices of prescription drugs; increasing the generosity of Medicare benefits; and encouraging the development of renewable energy and reducing the impact of climate change.

It would also raise taxes on some corporations and bolster the ability of the Internal Revenue Service to crack down on wealthy tax evaders. It would lower the federal deficit, though modestly.

The bill includes last-minute changes requested by Senator Kyrsten Sinema, Democrat of Arizona, the final holdout among her party’s 50 senators. Democratic leaders agreed to remove a tax on some wealthy hedge fund managers and private equity executives, and to include $4 billion in drought funding for her state.

The table below describes everything in the bill, including the prices:

What’s in the Inflation Reduction Act

Figures are in billions and over 10 years.

Spending and tax cuts: $490 billion

Affordable Care Act subsidies
Expanded subsidies for three years
Medicare prescription drug benefit
Increased generosity through Part D redesign and a $35 cap on co-payments for insulin

New tax credits for emissions-free electricity sources and storage
Including wind, solar, geothermal, advanced nuclear, etc.
Extending existing tax credits for wind and solar power
Tax credit for existing nuclear reactors
To prevent them from closing
Extend energy credit
Through 2024
Clean energy rebates and grants for residential buildings
Rebates for installing heat pumps and retrofitting homes
Financing for energy infrastructure
Updates and expands lending programs to make energy generation and transmission more efficient
Tax credit for carbon capture and storage

Clean manufacturing incentives
Incentives for companies to manufacture clean energy technologies in the U.S. rather than abroad, through tax credits and the Defense Production Act
Reduce emissions from energy-intensive industries
Such as concrete production

Green energy credits for individuals
Extends and increases tax credits for energy-efficient properties

Tax credits for new and used electric cars
Incentives for purchasing emissions-free vehicles, with income limits, and for installing alternative fueling equipment.
Clean hydrogen production
Fuel tax credits
Creates new credits for low-carbon car and airplane fuels, and extends credits for biodiesel and other renewable fuels
Financing for clean energy vehicles
Loans and grants for the production of hybrid, electric and hydrogen fuel cell cars

“Green bank” for energy investments
For investments in clean energy projects, particularly in poor communities
Other air pollution reduction
Includes funding for monitoring and reducing pollution, and grants for disadvantaged neighborhoods

Agricultural conservation
Funding for agricultural practices that improve soil carbon, reduce nitrogen losses and decrease emissions
Rural development
Investments in clean energy technology in rural areas
Forest conservation and restoration
Includes funding to reduce risk of wildfires

Improvements to federal buildings and highways
Electric transmission
Loans and grants to finance electricity transmission, including for offshore wind energy generation

Drought resilience
Weather and climate resilience
Includes investments in coastal areas and weather forecasting resources
Other federal research, projects and oversight
Includes funding for FEMA, D.H.S. and D.O.E.
Zero-emissions U.S.P.S. trucks
National Park Service funding
Includes funds for climate resilience and habitat preservation
Data collection and environmental reviews
Tribal funding
Clean energy, electrification, drought relief and climate resilience for federally recognized tribes.
Wildlife recovery and habitat climate resilience

Savings and new revenue: $764 billion

15% corporate minimum tax
I.R.S. enforcement
Projected net revenue raised from $80 billion in compliance and enforcement funding.
Stock buyback tax
Extend active loss tax limitation two years

Repeal a regulation on prescription drug rebates
This regulation has never gone into effect, so the savings are mostly just on paper
Drug price negotiation*
Medicare negotiation on prices for certain drugs
Limits on drug price increases*

Methane reduction incentives
Sets methane waste emissions thresholds and charges facilities that exceed them. (Increased revenue net of new spending.)
Reinstatement of Superfund
Increased revenue net of new spending.
Tax to fund the Black Lung Disability Trust Fund
Permanent extension
New oil and gas leases
On federal land and in the Gulf of Mexico
Other tax adjustments
Wind lease sales

*These are rough estimates because of changes to the drug price provisions in the bill after cost and savings estimates were released. Savings from the drug price negotiation policy may end up being lower, and the savings from limits on drug price increases are unofficial estimates based on an analysis by Don Schneider, a former chief economist of the House Ways and Means Committee.

But if the current bill includes a lot — in spending, new taxes and policies — it also omits a lot of the Democrats’ original ambitions. Missing is an entire set of family policies that were in a bill passed by the House last year, like a generous child tax credit and paid family leave.

Certain health policies, such as an expansion of Medicaid to give more low-income adults health insurance, have been removed to pare down the bill’s cost. And though the climate policies are the most expansive passed by any Congress, they are more modest than those included in earlier versions of the legislation.

The current bill includes clean electricity incentives that are comparable in size to those in a version passed by the House last year. But it scales back spending in almost every other category, from transportation to climate resilience. Some proposed investments from earlier versions — like those for lead remediation, work force development such as a Civilian Climate Corps, and electric bicycle tax credits — did not make it into the new text. The one major exception is manufacturing: Compared with previous versions of the bill, this legislation marks a significant increase in grants, loans and tax credits to manufacture clean energy technology domestically.

But it also pairs new climate spending with several major concessions to the fossil fuel industry at the request of Senator Joe Manchin III of West Virginia, whose support was necessary to advance the bill.

Here’s how the legislation compares with the much larger social safety net and climate bill passed by the House in November, often referred to as Build Back Better.

How the Bill Compares With Build Back Better

Figures are in billions and over 10 years.

Tax credits and new spending
$392 $570
Home health care through Medicaid
Expanded subsidies for Affordable Care Act health insurance
$64 $130
New Medicare hearing benefit
Increased generosity in Medicare’s prescription drug benefit
Health care work force spending
New child care program (6 years)
Four weeks of annual federal paid family and medical leave
Universal preschool for for 3- and 4-year-olds (6 years)
Child tax credit increase for one year; fully refundable after 2022
Expanded earned-income tax credit extended for one year
Other tax changes
Build and support affordable housing
Immigration reform
Other spending
Higher education and work force
Total $490 billion $2.15 trillion
Negotiation of certain drug prices and limit price increases*
$162 $160
Repeal a regulation on prescription drug rebates
$122 $145
Adjustments to uncompensated care pools
15% corporate minimum tax
$222 $320
Stock buyback tax
$74 $125
15 percent global minimum tax and international taxation reforms
Expand the net investment income tax
Surtax on income above $10 million
Extension of limits on excess losses of noncorporate taxpayers
$53 $160
Increase state and local tax deduction cap through 2025
I.R.S. enforcement
$124 $130
Methane fee, superfund fee and other revenue
$18 $50
Total $775 billion $2 trillion

*The figure for the Inflation Reduction Act is a rough estimate because of changes to the drug price provisions in the bill after cost and savings estimates were released. Savings from the drug price negotiation policy may end up being lower, and the savings from limits on drug price increases are unofficial estimates based on an analysis by Don Schneider, a former chief economist of the House Ways and Means Committee.

The Inflation Reduction Act is projected to reduce deficits by roughly $275 billion over 10 years, while the Build Back Better plan passed by the House would have added about $160 billion to deficits.

Democrats have said the new bill’s deficit reduction, as well as the provisions aimed at lowering energy and prescription drug costs, will help address the rapid inflation over the past year. Many economists, including supporters of the bill, have said that while it may reduce price pressures, the overall effect is likely to be modest, and over the long term.

The promise of taming inflation helped bring Mr. Manchin on board, who cited concerns about rising prices when he pulled his support from the bill passed by the House last year.

In a statement last month after an agreement on a new bill had been made with Democratic leadership, Mr. Manchin announced, “Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together.”

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


While federal and state officials continue to respond to the damage from Hurricane Ian, FEMA Administrator Deanne Criswell defended officials in Lee County, Florida,...


Crime is on the rise in major cities across the country and many Republicans seeking election to the Senate have put the issue at...


Supporters of a coup against Burkina Faso leader Paul-Henri Sandaogo Damiba attacked the French embassy in the capital Ouagadougou on Sunday. Security forces used...


Several instances of political violence, many with victims supporting conservative causes, have occurred since President Biden warned of the threat supporters of former President...


Press play to listen to this article Splits in the governing U.K. Conservative Party burst into the open Sunday as senior Tory Michael Gove...


Virginia Gov. Glenn Youngkin’s cross-country campaign tour on behalf of fellow Republicans running in November’s elections resumes this week, with a stop Wednesday in...


At least 174 people have died and more are being treated for injuries following a stampede at a football stadium in Java, Indonesia, on...


BUCHAREST — Governments shouldn’t shut down the internet to quell protests, the newly elected head of the United Nations’ telecoms agency suggested on Friday....