What’s in the Climate, Tax and Health Act – The New York Times | Vette Leader

WASHINGTON — After months of painstaking negotiations, Democrats will push through a climate, tax and health care package that would salvage key elements of President Biden’s domestic agenda.

While the legislation falls far short of the ambitious $2.2 trillion Build Back Better Act that the House of Representatives passed in November, it meets several longstanding Democrat goals, including tackling the toll of climate change on a self rapidly warming planet and taking steps to lower the cost of prescription drugs and revise parts of the tax code to make them fairer.

The following is included in the final package:

The bill includes the biggest spending ever by the federal government to slow global warming and reduce demand for the fossil fuels that are primarily responsible for causing climate change.

It would invest nearly $400 billion over 10 years in tax credits aimed at driving consumers toward electric vehicles and electric utilities toward renewable energy sources like wind or solar power.

Energy experts said the measure would help the United States cut greenhouse gas emissions by about 40 percent below 2005 levels by the end of this decade. This puts the Biden administration within striking distance of its goal of roughly halving emissions by 2030. Far more is needed to keep the planet from warming to dangerously high global temperatures, scientists said, but Democrats viewed it as a significant first step after decades of inaction.

At the same time, Democrats approved a set of fossil fuel and drilling regulations as concessions to Senator Joe Manchin III of West Virginia, a remnant of a conservative state heavily dependent on coal and gas.

The measure would secure new oil well leases in the Gulf of Mexico and Alaska’s Cook Inlet. It would expand tax credits for carbon capture technologies that could allow coal or gas-fired power plants to operate with lower emissions. And it would require the Home Office to continue holding auctions for fossil fuel leases when it plans to approve new wind or solar projects on federal land.

The tax credits include $30 billion to accelerate production of solar panels, wind turbines, batteries and processing of critical minerals; $10 billion to build facilities to make things like electric vehicles and solar panels; and $500 million through the Defense Production Act for heat pumps and critical mineral processing.

There’s $60 billion to help disadvantaged areas disproportionately impacted by climate change, including $27 billion to create the first national “green bank” to help drive investment in clean energy projects — specifically in poor communities. The law would also force oil and gas companies to pay fees of up to $1,500 per ton to fix excessive spills of methane, a potent greenhouse gas, and would impose a 10-year moratorium on offshore leasing -Reverse wind energy introduced by President Donald J. Trump.

For the first time, Medicare would be allowed to negotiate with drugmakers over the price of prescription drugs, a proposal that should save the federal government billions of dollars. This would initially apply to 10 drugs from 2026 and be extended to other drugs in the following years.

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Opponents argue the plan would stifle innovation and the development of new treatments by squeezing the profits drug companies can squeeze into their business, while some liberals have expressed frustration that the policy would be too slow to take off grasp. If the package becomes law as expected, it would be the largest expansion of federal health policy since the Affordable Care Act was passed.

The package would limit the out-of-pocket expenses seniors pay annually for prescription drugs to $2,000 and ensure seniors have access to free vaccines. The legislator has also provided for a rebate if price increases should exceed the rate of inflation. (But senior Senate rules officials said the penalty could only apply to Medicare, not private insurers.)

Republicans successfully challenged the introduction of a $35 price cap for insulin for privately insured patients during a series of amending votes early Sunday morning and forced its removal. However, a separate proposal capping the price of insulin for Medicare patients at $35 per month remained intact.

As part of the $1.9 trillion Pandemic Assistance Act that Democrats pushed through last year, lawmakers agreed to expand subsidies available under the Affordable Care Act. This proposal lowered the premiums for almost every American who relies on the program’s marketplace, either by making some plans free for lower-income people or by providing some assistance to higher-income people who previously didn’t receive help.

The package would extend those subsidies, which now expire at the end of the year, for another three years. Democrats fear a backlash in November’s midterm elections if they phase out the subsidies.

The tax proposals were drafted by Senator Kyrsten Sinema, an Arizona Democrat, who opposed her party’s push to raise tax rates on the nation’s wealthiest companies and individuals.

To avoid the tax rate hike Ms Sinema opposed, Democrats instead opted for a far more complex tax law change: a new minimum tax of 15 percent on the profits companies report to shareholders. It would apply to companies that report more than $1 billion in annual revenue on their financial statements, but can also use credits, deductions and other tax treatments to lower their effective tax rates.

Ms Sinema protected a deduction that would benefit manufacturers, a change she successfully called for before committing to moving forward with the legislation on Thursday. And she joined six other Democrats and all Republicans in narrowing the scope of that corporate minimum tax by backing a change in the closing hours of Vote-a-rama Sunday afternoon.

To offset the revenue losses forced by this change, Democrats extended a limit on business loss tax deductions enacted as part of the 2017 Trump tax cuts.

It also forced the scrapping of a Democrat-Republican-backed proposal that would have narrowed a tax break used by both hedge fund and private equity industries to achieve lower tax rates than their entry-level employees. And she committed to pursuing separate legislation outside of the budget package, but that would require at least 10 Republicans to back it.

The legislation would also bolster the IRS with an investment of about $80 billion in hopes of generating additional tax revenue by cracking down on wealthy corporations and wealthy tax evaders.

Republicans who have opposed increasing funding for the agency in the past have argued it will increase auditing and scrutiny of lower-income households. The IRS, in turn, has dismissed the concerns, telling Congress that “these resources are absolutely not intended to increase auditing for small business or middle-income Americans.”

Jim Tankersley contributed reporting.

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