President Joe Biden celebrated the passage of the Inflation Reduction Act Friday afternoon, praising a far-reaching bill that was left for dead less than one month ago.
Biden, who is vacationing at a South Carolina mansion, called the bill a win for the people in a tweet fired off soon after the act’s party-line passage.
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“Today, the American people won. Special interests lost,” it reads. “With the passage of the Inflation Reduction Act in the House, families will see lower prescription drug prices, lower health care costs, and lower energy costs. I look forward to signing it into law next week.”
Today, the American people won. Special interests lost.
With the passage of the Inflation Reduction Act in the House, families will see lower prescription drug prices, lower health care costs, and lower energy costs. I look forward to signing it into law next week.
— President Biden (@POTUS) August 12, 2022
Along with signing the bill after returning to Washington, Biden plans a larger celebration at the White House on Sept. 6. He watched the U.S. House of Representatives vote on C-SPAN and said, again in a tweet, that it “required many compromises. Doing important things almost always does. I look forward to signing it into law.”
Biden has not held a public event or spoken to the press since arriving in the Charleston area’s Kiawah Island on Wednesday, but he’ll have the chance to sign into law a major victory for his agenda upon returning.
It was a different story for conservatives, who have spent most of the last week railing against the bill and decried its passage on Friday.
“Vote them out!” said Republican National Committee Chairwoman Ronna McDaniel in a statement. “Congressional Democrats are to blame for soaring inflation, and now they are responsible for raising taxes during a recession. Democrats are out of touch with struggling families, and they will pay the price in November.”
The bill is set to spend $433 billion over 10 years and raise nearly $740 billion, though the final analysis amid tweaks during its passage in the Senate on Sunday has not yet been released. Democrats boast that it will decrease the deficit and address kitchen table issues, while Republicans raise concerns over the bill’s potentially increasing taxes on Americans making less than $400,000 a year and hiring 87,000 Internal Revenue Service employees.
“You can’t tax and spend your way out of an inflation crisis,” House Republican leader Kevin McCarthy tweeted earlier in the day.
It’s a stunning turn of events for the bill, which began life as the ill-fated Build Back Better Act Democrats pushed for much of 2021. Sen. Joe Manchin (D-WV) sunk that bill last December and appeared ready to kill off a newer, slimmed-down version as recently as three weeks ago. Ironically, Manchin said he was rejecting the legislation due to concerns over its impact on inflation.
But following the passage of the CHIPS and Science Act, Manchin and Senate Majority Leader Chuck Schumer (D-NY) announced they’d come to an agreement on yet another iteration of the bill, this time dubbed the Inflation Reduction Act. In name, the bill addresses Manchin’s concerns and a politically dangerous situation for Democrats.
Their GOP counterparts hold that the bill’s name is misleading and that it violates Biden’s campaign pledge not to raise taxes on Americans earning less than $400,000 a year.
Though the legislation does not include higher taxes on anyone earning less than that figure, Republicans argue the bill will nonetheless effectively raise the tax burden on middle-class voters. They say the new 15% minimum tax on corporations will result in higher prices, lower wages, and suppressed retirement accounts, while a beefed-up IRS funded by the bill will result in more painful tax audits for regular folks.
The act creates a 15% minimum corporate tax and introduces a 1% excise tax on corporate stock buybacks. A Joint Committee on Taxation analysis released Tuesday found that the tax burden on those making between $200,000 and $500,000 would indirectly increase by 0.8%, though House Speaker Nancy Pelosi said Friday that there would be “no new taxes on families making less than $400,000.”
The bill does include climate and energy provisions, including tax incentives to buy electric vehicles and increase domestic production of renewable energy components such as solar panels.
Regarding healthcare, Medicare recipients will see their insulin costs capped at $35 next year, and an out-of-pocket drug price cap of $2,000 for Medicare patients will begin in 2025. Medicare will be able to negotiate the cost of 10 drugs beginning in 2026.
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While Biden was not directly involved in negotiations over the bill, the White House has steadfastly promoted it. It’s the third major bill to pass through Congress in just two weeks, joining the PACT Act and the CHIPS and Science Act.
