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US Senate Democrats bill will make a mark on climate, health care costs According to Reuters


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© Reuters. FILE PHOTO: US Senate Majority Leader Chuck Schumer (D-NY) departs after a news conference to introduce $430 billion in drug, energy and tax prices backed by Democrats at the Palace US Capitol in Washington, USA August 5, 2022. REUTERS / Jonathan Ernst

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By David Morgan

WASHINGTON (Reuters) – The $430 billion tax, health care and climate change bill passed the U.S. Congress on Friday aims to help reduce the carbon emissions that cause climate change and reduce medical costs for older Americans.

President Joe Biden’s Democrats hope the bill, which has now passed both houses of Congress, will boost their chances in the November 8 midterm elections, when Republicans are elected. favorably regain a majority in at least one chamber of Congress.

The package, called the Inflation Reduction Act, is a dramatically scaled-down version of a bill previously backed by Biden that was blocked by Senate Democrats Joe Manchin and Kyrsten Sinema for being too expensive.

The bill will be sent to Biden to be signed into law.

“Today is truly a glorious day for us. We deliver to the president’s desk a monumental bill that will truly be for the people,” House Speaker Nancy Pelosi, the top Democrat of the house, told reporters on Friday ahead of the vote. .

Republicans see the bill as a spending “wish list” that they say would hurt an economy wracked by inflation, saying it would kill jobs and raise spending. energy costs and undermine growth at a time when the economy is facing a potential recession.

“The most recent reckless taxing and spending by Democrats is influenced by a serious policy case,” said Republican Senator Chuck Grassley. “The last thing businesses and families need right now is increased taxes and a series of ineffective policies, creating further confusion and uncertainty in the economy.”

About half of Americans – about 49% – support the bill, including 69% of Democrats and 34% of Republicans, according to a Reuters/Ipsos poll conducted on 3 and 4. August. The most popular element of the bill is giving Medicare older and disabled Americans the right to negotiate drug prices, which 71% of respondents support, including 68% of Republicans.

Economists, who say the law could help the Federal Reserve fight inflation, do not expect a major impact on the economy in the coming months.

Climatic Concentration

With $370 billion in climate-focused spending, it is the most consequential climate change bill passed by Congress.

The bill that gives businesses and families billions of dong in incentives to encourage the purchase of electric vehicles and energy-efficient appliances, as well as spur new investments in wind and solar energy will double the amount of new, clean electricity generation capacity coming online in the US by 2024, modeled after the Iteration Project at Princeton University.

That would help the US fulfill its pledge to cut greenhouse gas emissions in half by 2030 below 2005 levels, made at last year’s Glasgow climate summit.

While environmental groups largely accepted the bill, they noted that the compromises secured by Manchin, who represents coal-producing West Virginia, would extend the life of US fossil fuels. .

Those provisions include rules that only allow the federal government to authorize new wind and solar energy development on federal land when it is also auctioned off oil and gas rights.

COST OF MEDICINE

Juliette Cubanski, deputy director of Medicare programs at the Kaiser Family Foundation, said the law would reduce drug costs for governments, employers and patients.

“Probably the biggest impact will be on people with prescription drug coverage through Medicare,” she said.

One important change is a provision that allows the federal Medicare health plan to negotiate lower prescription drug prices.

Negotiated prices for the 10 most expensive Medicare drugs will apply starting in 2026, with that number going up until reaching 20 a year in 2029.

The nonpartisan Congressional Budget Office estimates Medicare will save $101.8 billion over 10 years by negotiating drug prices.

The provision also places an annual $2,000 limit on out-of-pocket expenses for seniors through Medicare.

The pharmaceutical industry says price negotiations will stifle innovation.

TAX TERMS

The bill also imposes a new excise tax on share buybacks, a late change after Sinema raised an objection over another provision that could impose a new tax on capital gains. concession, which is currently a tax loophole for hedge funds and private equity backers. The provision has been eliminated.

Lawmakers say the excise tax is expected to add $70 billion in tax revenue each year. That is more than the net profit provision is forecast to increase.

A report by the Congressional Budget Office released ahead of that final change estimated the measure would reduce the federal deficit by a net $101.5 billion over the next decade.

That’s about a third of the $300 billion deficit reduction predicted by Senate Democrats, but excludes a projected $204 billion revenue increase from increased Internal Revenue Service enforcement. The Congressional Budget Office has not released a report on the final version of the bill.



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