In what nearly became a stalemate in the US Senate, all 50 Democrat senators voted to pass the $430 billion Inflation Reduction Act, which will make an impact on climate change initiatives, public healthcare, and taxes.
As all 50 of the Upper House’s Republican senators voted against the Act, it fell to Vice-president Kamala Harris to cast the tie-breaking vote.
Before the Act’s final passage, it took senators over fifteen hours to deliberate over many amendments from the evening of Saturday, August 6th. The amendments in question included several posed by Republican senators, as well as independent senator Bernie Sanders.
There was a bit of confusion, however, when Democrat senator Kyrsten Sinema of Arizona sought the exemption of smaller subsidiaries of several major equity companies from the 15% minimum corporate tax imposed under the act.
Fellow Democrats eventually accepted Sinema’s revisions, opting to make up for the deficit in revenues by extending limits on companies writing off losses.
What Exactly is the Inflation Reduction Act?
If readers will recall, Senate Democrats proposed the multi-trillion-dollar Build Back Better Bill, which was meant to address both economic and environmental issues. However, the bill was junked as several party leaders expressed skepticism about how beneficial it would actually be.
The recently passed Act is a modified version of Build Back Better on a more manageable scale. If signed into law by President Joe Biden, it will authorize the release of nearly $370 billion for clean energy projects and climate change programs, possibly the US’ largest investment into clean energy in history.
Likewise, the Act will allow for extending healthcare subsidies under the Affordable Care Act until at least 2025. It will also allow Medicare to negotiate for lowered prices on prescription medication.
In terms of the national economy, it aims to impose a 15% minimum tax on companies earning at least $1 billion a year. In doing so, the Act may help reduce the national deficit by $300 billion within the current decade and gradually lower inflation over the next several years.
Who’s Behind the Inflation Reduction Act?
This landmark bill was initially proposed by Senate Majority Leader Chuck Schumer of New York and West Virginia senator Joe Manchin.
It was seen as a way that Democrats could again raise the issue of getting approval for funding environmental and health-related initiatives following months of stalemates with their Republican colleagues.