Biden signs $750B healthcare, tax and climate bill
© WikiMedia (The White House)
Biden signs $750B healthcare, tax and climate bill

US President Joe Biden Tuesday signed the Inflation Reduction Act (IRA) into law. Biden lauded the act’s sweeping healthcare, tax, and climate reforms. According to Senate Democrats, the IRA achieves eight main objectives:

  • Expands Medicare benefits by ensuring free vaccines and price caps on insulin and out-of-pocket drug costs;
  • Lowers energy costs through tax credits and rebates;
  • Reduces carbon emissions by 40 percent by 2030;
  • Regulates drug companies to lower healthcare costs;
  • Invests $60 billion to create clean manufacturing jobs;
  • Invests $60 billion in environmental justice for disadvantaged communities;
  • Introduces a 15 percent corporate tax and a 1 percent fee on stock buybacks to raise an estimated $737 billion in revenue; and
  • Introduces protections for families and businesses making $400,000 or less.

The nonpartisan Penn Wharton Budget Model (PWBM) doubts that the bill will have “any measurable impact on inflation” but it believes it will “reduce cumulative deficits by $264 billion over the 10-year budget window.” PBWM also notes that future generations will “gain from the improved economy, including a reduction in carbon emissions.”

Senator Joe Manchin (D-WV), a key swing vote in the Senate, hopes the act will “give energy companies the certainty they need to increase domestic energy production while also lowering energy and healthcare costs and pay down our national debt without raising costs for working Americans.” Environmental groups have criticized high-ranking democrats for making concessions in the bill to gain Manchin’s support. Manchin has been derided by colleagues like Senator Bernie Sanders (D-VT) for “intentionally sabotaging” Biden’s agenda.

The IRA highlights disagreement in American politics over electric vehicles. Under the IRA, electric vehicles must use North American-made and mined batteries to qualify for tax credits. This is partly because human rights organizations like Amnesty International have documented labor and human rights abuses in the supply chain for Chinese electric vehicle batteries. The UN has also noted the “worrying” environmental risks of mining materials needed for electric vehicles.

In contrast, many Democrat leaders still widely support electric vehicles. On Monday California Attorney General Rob Bonta published a letter with 16 other state attorneys general urging the US Postal Service (USPS) to adopt a zero-emission fleet of electric vehicles. The letter criticized USPS’s “faulty environmental analysis” used to justify the purchase of 165,000 fossil-fuel-powered vehicles over ten years.