The House of Representatives is expected to pass the anti-inflation bill Friday afternoon, sending the White House a top Democratic legislative priority in a significant victory for President Biden.
These include measures in the areas of energy and climate as well as significant changes in the tax code and in the healthcare system.
Here’s what’s included in the bill:
ENVIRONMENT, ENERGY AND CLIMATE
The bill includes a number of measures that would impact energy, the environment and climate change.
It includes many provisions that encourage the use of clean energy or otherwise serve to mitigate climate change, but also includes others that promote fossil fuels — including securing the support of Sen. Joe Manchin (DW.Va.).
Nonetheless, models still estimate large climate benefits resulting from legislation. Three much-cited models estimate that the law will bring U.S. planet-warming emissions 31 to 44 percent, 37 to 41 percent, and 42 percent lower by 2030 than 2005 levels, respectively.
New incentives for lower-carbon and zero-carbon energy.
- Tax credits are granted for energy production and investments in technologies such as wind, solar and geothermal energy. The investment tax credit now also applies to battery storage and biogas.
- Tax credits would be created or expanded for additional technologies and energy sources, including nuclear power, clean-source hydrogen power, biofuels and technologies that capture carbon from fossil fuel power plants.
- Many of the incentives include bonuses for companies based on how much they pay their workers and whether they manufacture their steel, iron and other components in the United States
Consumers get tax credits to choose cleaner energy options.
- Tax credits are given for residential clean energy expenditures, including rooftop solar panels, heat pumps, and small wind turbines. Consumers can get credit for 30 percent of their spending until 2032, and credit will be phased out thereafter.
- Consumers who buy electric vehicles are offered tax credits of up to $7,500 — but that credit comes with conditions that may make it difficult for vehicles to actually qualify, including a requirement that some of the minerals used in their batteries be sourced from Sourced from countries that are free -Trade deals with the US Minerals from China, a key supplier, would not meet this requirement.
- A tax credit would be extended for energy efficiency in commercial buildings.
Some fossil fuel production on public land would be boosted.
- The future of sun and wind on public land and wind on public waters would be conditional on conducting lease sales opening up new oil and gas production.
- The bill restores the results of a recent offshore oil and gas lease sale that was scrapped on environmental grounds. The Home Office would need to complete at least three more offshore oil and gas lease sales by October 2023.
New programs promote investments in climate protection.
- A new program aims to reduce emissions of the planet-warming gas methane from oil and gas, both by providing grants and loans to help companies limit their emissions and by charging producers with excessive methane emissions .
- $27 billion would go to a green bank that would provide more incentives for clean energy technologies.
Fossil fuel production on public land is becoming more expensive.
- Minimum fees are rising for companies to pay the government for oil and gas they produce on public land and water. A license fee is charged when extracting gas that is later burned or released as waste rather than being sold as fuel.
Communities harmed by pollution will be relieved.
- $3 billion would go to block grants for environmental justice — community-led programs that address damage from climate change and pollutants, including $20 million for community-level technical assistance through fiscal year 2026.
- More than $3 billion will be allocated to air pollution monitoring in low-income communities. Almost half of the funding – $117 million – would go specifically to communities in close proximity to industrial pollutants.
- An excise tax on imported petroleum and crude oil products to fund industrial disaster clean-up will rise from 9.7 cents to 16.4 cents a barrel. The reintroduction of the tax is expected to raise $11 billion.
- The bill expands and increases the Black Lung Disability Trust Fund, a tax on coal production, to fund claims of workers with the disease. According to a 2018 study by the National Institute for Occupational Safety and Health, at least 10 percent of miners with at least 25 years of experience are affected by black lung caused by long-term exposure to and inhalation of coal dust.
– Rachel Frazin and Zack Budryk
The bill would allow Medicare to negotiate prices for some drugs and prop up health insurance subsidies. For years, the Democrats have been trying to push through the negotiation measure for drugs in particular against the strong resistance of the pharmaceutical industry.
- Medicare could negotiate lower prices on 10 expensive drugs starting in 2026 and increase to 20 drugs by 2029. There is a hefty penalty for not coming to the table for a drug company: a tax of up to 95 percent of the drug’s sales. There is also a cap that the negotiated price cannot exceed.
- In a deal with moderates like Sen. Kyrsten Sinema (D-Ariz.), only older drugs will be negotiated after a period of nine years for most drugs and 13 years for more complex “biologic” drugs. This means that the negotiations are more limited than many Democrats would like.
- It is estimated that the federal government’s provisions will save more than $200 billion over 10 years.
Drug costs can be capped, but mostly only for Medicare.
The bill contains further measures to limit drug costs. The provisions still largely apply only to Medicare seniors, not the millions of people who have health insurance through their jobs, in part because complex Senate rules limited the scope of the provisions.
- When drug companies increase Medicare prices faster than the rate of inflation, they have to pay the government rebates for the difference. Democrats attempted to apply this provision to the private market, but the House of Representatives ruled that it violated Senate rules used to bypass a GOP filibuster.
- In one of the most tangible provisions for patients, the bill caps the cost of out-of-pocket medications to $2,000 per year for seniors on Medicare starting in 2025.
- The bill also limits patients’ insulin costs to $35 per month, but only for seniors on Medicare. Republicans voted against overriding the Senate Houseman to extend this protection to patients with private insurance.
Individuals enrolled in ACA plans receive a financial assistance boost.
- The bill would extend extended financial assistance by three years to help people enrolled in Affordable Care Act plans afford premiums. Otherwise, the extra aid would have expired at the end of this year. The provision expands eligibility to allow more middle-class people to receive premium assistance and increases the scope of assistance overall.
– Peter Sullivan
The bill would pay for climate and health measures by imposing new taxes on big corporations and prosecuting wealthy tax dodgers.
At the heart of the bill’s tax plan is a minimum tax of 15 percent on income that large companies report to their shareholders.
- The tax is expected to raise $222 billion over the next decade, most of the $740 billion raised by the legislation. It applies to companies with $1 billion in annual profits and would only affect about 150 large companies, according to the Joint Committee on Taxation.
- At Sinema’s request, the tax would exempt companies that benefit from accelerated depreciation, a popular deduction that helps pay for capital investments such as new equipment and small businesses that are subsidiaries of private equity firms.
The new IRS funding aims to encourage tax collection.
- The IRS will get $80 billion to improve enforcement, an effort that is expected to rake in another $204 billion in taxpayer dollars. The Treasury Department and IRS have asserted that the intended targets are wealthy individuals and businesses, whose audit rates have fallen more sharply in recent years relative to ordinary Americans.
- Another $15 million is funding a task force to determine how the IRS can provide a “direct e-file tax filing system” that would likely replace or compete with commercial products, some of which have been accused of fraudulent marketing practices.
- The bill also expands a range of restrictions on losses that companies can deduct from their taxes. The limits, which are expected to raise $52 billion, prevent wealthy individuals from significantly reducing or even wiping out their income tax liability.
New tax targets share buybacks.
- The bill imposes a 1 percent excise tax on stock buybacks to replace revenue lost by Sinema’s appeasement. Democrats expect the provision will raise $74 million over a decade, mostly from big companies like Apple, Nike and ExxonMobil.
Share buybacks by S&P 500 companies have surged in recent years and are expected to top $1 trillion this year. Companies buy back their shares to reward shareholders and increase their share price by artificially limiting supply. Democrats have criticized the practice, arguing that companies should invest in workers and innovation instead.
– Tobias Burns and Karl Evers-Hillstrom