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House passes massive climate, tax and health bill

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US Speaker of the House Nancy Pelosi, Democrat of California, speaks during her weekly press conference on Capitol Hill in Washington, DC, on August 12, 2022.

Olivier Douliery | AFP | Getty Images

The House passed a sweeping tax, health and climate bill on Friday, delivering a significant win for Democrats and President Joe Biden lower than three months before the pivotal midterm elections.

The chamber approved the greater than $430 billion package by a 220-207 margin, as all Democrats backed it and all Republicans opposed it. The measure, which caps a greater than yearlong slog by Democrats to pass a core piece of their agenda, will head to President Joe Biden’s desk for his signature.

The bill, dubbed the Inflation Reduction Act, embodies the thrust of the Biden administration’s domestic “Construct Back Higher” agenda to reshape the U.S. economy because it emerged from the coronavirus pandemic.

Its provisions are estimated to boost $737 billion over 10 years. Democrats say the bill would scale back the deficit by greater than $300 billion, citing analyses from nonpartisan congressional tax and budget offices.

The plan features a record $369 billion in spending on climate and energy policies projected to slash the country’s carbon emissions by roughly 40% by 2030. It also allocates $64 billion to increase an Reasonably priced Care Act program to cut back insurance costs.

One other key provision is prescription drug pricing reform: The bill would empower Medicare to barter prices on 100 drugs over the following decade, amongst other reforms that the Senate estimates will herald $265 billion.

On the tax side, the bill would impose a 15% corporate alternative minimum tax aimed toward wealthy corporations which were in a position to shrink their tax burden far below the 21% rate. It will also spend $80 billion on boosting the IRS’ tax enforcement and compliance capabilities, a move that the Congressional Budget Office estimates will yield $124 billion in revenue.

During Senate negotiations last week, Democrats also added in an excise tax on stock buybacks that’s projected to usher in $74 billion.

The laws narrowly passed the Senate on Sunday, overcoming the most important obstacle on its path to Biden’s desk. Democrats substantially whittled down and reshaped the bill over greater than a 12 months with a purpose to gain the support of a handful of key Democratic holdouts.

The bill passed the upper chamber through the reconciliation process, enabling Democrats to ram it through with none Republican support within the Senate, which is split evenly by party. Vice President Kamala Harris forged the tie-breaking vote, sending the bill to the Democrat-majority House.

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