House Passes Democrats’ Ambitious $430 Billion Climate And Health Bill

Topline

The House of Representatives voted 220-207 to approve the $437 billion Inflation Reduction Act on Friday after months of torturous negotiations among Senate Democrats that finally resulted in a landmark climate, health and tax package that passed that chamber Sunday, giving President Joe Biden and the Democrats a key win ahead of midterm elections in November.

Key Facts

The House vote ran along party lines, with no Republicans joining the 220 Democrats who voted to approve the package.

The bill, which is a slimmed-down version of Biden’s Build Back Better plan that Senate Majority Leader Chuck Schumer (D-N.Y.) hammered out with key holdout Sen. Joe Manchin (D-W.Va.), includes $369 billion in spending on climate and energy programs–the biggest clean energy investment in U.S. history.

It also contains ambitious measures to reduce health care costs, giving Medicare the power to negotiate with drugmakers to cut the price of 100 medications and spending $64 billion to extend health insurance subsidies under the Affordable Care Act.

The spending would be financed primarily by tax increases, including a 15% minimum tax on corporations that make at least $1 billion in annual income.

The legislation would cut the federal deficit by roughly $100 billion over the next 10 years, according to the Congressional Budget Office, while Democrats say it will reduce carbon emissions by roughly 40% below 2005 levels by 2030.

Crucial Quote

“Today is a glorious day for us,” House Speaker Nancy Pelosi (D-Calif.) said in a press conference Friday. “We sent to the president’s desk a monumental bill that will truly be for the people.”

Chief Critic

Rep. Michelle Fischbach (R-Minn.) said on the House floor, “[Democrats] are calling this the Inflation Reduction Act, but in reality this is just another installation of their tax and spend agenda that got us here in the first place.”

Key Background

Facing universal opposition to climate legislation from Republicans in the Senate, the Democrats used the budget reconciliation process to bypass the 60-vote threshold needed to close debate under the filibuster rule, with Vice President Kamala Harris casting the deciding vote Sunday to break a 50-50 tie. The Inflation Reduction Act is a greatly scaled-down version of Biden’s $2.2 trillion Build Back Better bill, which failed in the Senate in December, facing opposition from Manchin and Sen. Kyrsten Sinema (D-Ariz.). Schumer and Manchin privately came to an agreement on a smaller package in late July, weeks after Democrats said they had given up on convincing the West Virginian to support major new spending amid high inflation.

Further Reading

Inflation Reduction Act Passes: Senate Approves $430 Billion Climate And Healthcare Bill (Forbes)

Inflation Reduction Act Will Restore IRS Staffing To 1995 Level By 2026 (Forbes)

How The Inflation Reduction Act Affects Investors (Forbes)