President Joe Biden signed the Inflation Reduction Act, the roughly $700 billion climate, health care and tax package that passed Congress last week on a party line vote.
Biden handed a pen to Sen. Joe Manchin (D-WV) just after he signed the bill, a gesture to one of the Senate’s Democratic holdouts to earlier versions of the bill that were far more sweeping and costly.
“Joe, I never had a doubt,” Biden said during his remarks in the State Dining Room.
The president also took a swipe at the GOP, unified in opposition to the legislation. He said that “Democrats sided with the American people, and every single Republican sided with special interests.”
Biden called the bill “one of the most significant laws in our history,” as it marks the federal governments largest outlay to address climate change.
Biden also tried to convey that Democrats have actually accomplished a lot since he took office, characterizing the passage of the bill as proof that “democracy still works in America.” “We are in a season of substance,” Biden said, as he works to improve his approval numbers and Democrats’ prospects the midterms.
The Inflation Reduction Act includes $369 billion for energy and climate programs over the next decade, including tax credits for the purchase of electric vehicles and other credits for home solar energy.
The bill also includes $64 billion to extend Affordable Care Act benefits, and $4 billion to address the drought in western states. Another $300 billion in the bill would be directed to deficit reduction.
The bill would be financed by a new 15% corporate minimum tax, raising an estimated $222 billion, according to congressional estimates. The provision was intended to capture large companies with at least $1 billion in profit that, because of accounting maneuvers and write-offs, pay at a lower rate or no federal corporate tax. Another $265 billion would come from prescription drug pricing reform, and Medicare will be allowed to negotiate for the cost of prescription drugs. An estimated $74 billion would come from a 1% fee on stock buybacks.
For a time, it looked as if major climate and health care legislation had stalled out, as Manchin and Sen. Kyrsten Sinema (D-AZ) refused to endorse Democrats’ Build Back Better bill. That massive legislation at one point had a price tag of $3.5 trillion, but was pared back by the time it passed the House in November. Still, Manchin publicly resisted the smaller bill, then pegged to cost about $1.8 trillion, as he cited concerns over rising inflation.
Last month, Manchin gave signals that he wouldn’t sign on to any climate legislation at all, but he continued to talk with Schumer. Eventually, they announced a surprise agreement on July 28.
Senate Majority Leader Chuck Schumer (D-NY), Rep. Frank Pallone (D-NJ), Rep. Kathy Castor (D-FL) and House Majority Whip Jim Clyburn joined Biden for the ceremony.
Biden has enjoyed a series of successes in recent weeks that also include major legislation to boost American computer chip production and to expand veterans’ health care. Some of those accomplishments have been eclipsed by news about Donald Trump, but Democrats hope that Biden’s predecessor will only remind midterm voters of the chaos of his presidency.
Clyburn said to Biden, “Many seem surprised at your successes. I am not, because I know you, but more importantly because you know and respect the American people.”
Republicans have hammered Democrats over a provision to raise revenue by boosting IRS enforcement. That provision is aimed at those in higher income levels, but it is likely to emerge as a key talking point going into the fall elections.
Manchin, though, told reporters that the IRS has been drastically underfunded. He also blamed the lack of Republican support on the fact that it is an election year, and “basically they weren’t going to touch the tax code.”
Manchin gave Biden credit for his role in the negotiations. “He knew enough, being a former senator, sometimes you just got to let us do what we got to do. I give him all the credit for that. You don’t do something of this magnitude with him not … having involvement and knowing what is going on.”
Former President Barack Obama tweeted that the legislation “is a BFD.” That was a reference to what Biden said when Obama signed the Affordable Care Act. Biden’s comment was caught on a hot mike.
This is a BFD. https://t.co/L0sh8ULo4T
— Barack Obama (@BarackObama) August 16, 2022
Update: Some industry reaction: The Producers Guild of America released a statement in support of the legislation.
“The Producers Guild applauds the inclusion in the Inflation Reduction Act of significant legislation that seeks to reduce and address the impact of climate change. We acknowledge the challenges still present within the legislation while being hopeful that its magnitude underscores the urgency of the Producers Guild’s own call to action for the entertainment industry’s transition to clean energy by 2030. The Producers Guild has been committed to the promotion of sustainable practices for over a decade.”
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