Democratic leaders in Washington, D.C. have reached an agreement on a spending package that aims to lower health-care costs, combat climate change and reduce the federal deficit, marking a massive potential breakthrough for President Joe Biden’s long-stalled economic agenda.
The deal was struck between the US Senate Majority Leader and the right-wing Democrat who scuttled Biden’s ‘Build Back Better’ plan, which would have provided funding to establish programs relating to education, labor, health, taxes, immigration, child care, and the environment.
Senators Joe Manchin and Chuck Schumer say the agreement was approved by House Speaker Nancy Pelosi and President Joe Biden, so they expect to add the compromise to the budget reconciliation bill, which means success will not hinge on Republican cooperation.
“This is the action the American people have been waiting for,” said Biden. “This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future.”
The Inflation Reduction Act includes some climate and clean energy provisions, but environmentalists plan on reviewing the fine print before celebrating.
The joint statement from Manchin and Schumer said the Inflation Reduction Act of 2022 will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.
“The press release says this will reduce global greenhouse gas emissions by 43% by 2030; but I am waiting to see the actual legislation,” said Lisa McCormick, a New Jersey environmentalist. “As wildfires burn in over 12 U.S. states and much of the country faces sweltering heat waves, the public is demanding America do more, not less, to address the climate crisis.”
McCormick said “Democrats have to chew gum and walk at the same time,” by passing measures to deal with inflation, the broader economy, and the environment.
“The Sierra Club is encouraged by the potential of the Senate finally passing bold climate action,” said Sierra Club Legislative Director Melinda Pierce. “For months, the environmental community, President Joe Biden and Leader Chuck Schumer, and economists have pointed out that climate action would reduce inflation and lower energy costs for Americans, and we’re glad the Senate is recognizing the opportunity they have before them. Climate action cannot wait one day longer.”
Pierce added, “We are eager to see text of this legislation, and are grateful that Biden and Schumer have remained resolute in finding a path to pass once-in-a-generation investments in our communities, our economy, and our future.”
The Inflation Reduction Act of 2022 contains Democratic priorities, which:
- reduces the cost of health care for millions by extending ACA subsidies for three more years;
- allows Medicare to negotiate the price of prescription drugs;
- combats the climate crisis by reducing carbon pollution by roughly 40 percent by 2030; and
- lowers energy costs and advances energy security.
The agreement would reduce the deficit and help fight inflation by allocating $300 billion for deficit reduction. It is also fully paid for by implementing a 15 percent corporate minimum tax; and strengthening IRS enforcement.
This agreement also honors Biden’s pledge not to impose new taxes on families making less than $400,000 or on small businesses.
“This agreement sounds like a victory for America’s families and for protecting our environment but we need to see the details,” said McCormick. “We must also continue to fight for priorities not contained in this legislation — because more must be done on behalf of America’s working families and to save the planet.