On August 16, President Joe Biden signed the Inflation Reduction Act of 2022 into law which will lower costs for families, combat the climate crisis, reduce the deficit, and finally ask the largest corporations to pay their fair share.
“Let me say from the start: With this law, the American people won and the special interests lost,” President Biden proclaimed at the signing of the law.
The Inflation Reduction Act of 2022 is being referred to as a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and middle out. It aims to curb inflation by reducing the deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy.
“It’s about delivering progress and prosperity to American families,” stated President Biden. “It’s about showing the American and the American people that democracy still works in America — notwithstanding all the — all the talk of its demise — not just for the privileged few, but for all of us.”
Under this new law, Americans can expect the following changes:
Cutting Prescription Drug Cost
Americans pay two to three times more for their prescription drugs than people in other wealthy countries and high prices contribute to racial and ethnic health inequities.
- Among adults 65 and older, Black Medicare beneficiaries were roughly 1.5 times as likely as White beneficiaries to have trouble affording medications, and about 2 times as likely to not fill needed prescriptions due to cost.
- Among adults 65 and older, Latino Medicare beneficiaries were roughly 1.5 times as likely as White beneficiaries to have trouble affording medications, and about 2 times as likely to not fill needed prescriptions due to cost.
- 5-7 million Medicare beneficiaries could see their prescription drug costs go down because of the provision allowing Medicare to negotiate prescription drug costs.
- 50 million Americans with Medicare Part D will have their costs at the pharmacy capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year.
- 3.3 million Medicare beneficiaries with diabetes will benefit from a guarantee that their insulin costs are capped at $35 for a month’s supply.
Lowering Health Care Costs
- 13 million Americans will continue to save an average of $800 per year on health insurance premiums
- 3 million more Americans will have health insurance than without the law.
- The uninsured rate is at an all-time low of 8%, which this law will build on.
Defeating Special Interests
- $187 million: The amount the Pharmaceutical industry has spent on lobbying in 2022.
- 1,600: number of lobbyists the pharmaceutical companies had in 2021 – three times the number of Members of Congress
- 33 years: the amount of time Congressional Democrats have been trying to lower prescription drug costs by allowing Medicare to negotiate drug prices.
- 19 years: number of years Medicare has been blocked from negotiating prescription drug costs
Lowering Energy Costs
- Families that take advantage of clean energy and electric vehicle tax credits will save more than $1,000 per year.
- $14,000 in direct consumer rebates for families to buy heat pumps or other energy-efficient home appliances, saving families at least $350 per year.
- 7.5 million more families will be able to install solar on their roofs with a 30 percent tax credit, saving families $9,000 over the life of the system or at least $300 per year.
- Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950 per year.
- Putting America on track to meet President Biden’s climate goals, which will save every family an average of $500 per year on their energy costs.
Building a Clean Energy Economy
- Power homes, businesses, and communities with much more clean energy by 2030, including:
- 950 million solar panels
- 120,000 wind turbines
- 2,300 grid-scale battery plants
- Advance cost-saving clean energy projects at rural electric cooperatives serving 42 million people.
- Strengthen climate resilience and protect nearly 2 million acres of national forests.
- Creating millions of good-paying jobs making clean energy in America.
Reducing Harmful Pollution
- Reduce greenhouse gas emissions by about one gigaton in 2030, or a billion metric tons
- Deploy clean energy and reduce particle pollution from fossil fuels to avoid up to 3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.
Making the Tax Code Fairer
Some of the largest and most profitable corporations pay $0 in federal income tax. And, according to the White House’s BY THE NUMBERS: The Inflation Reduction Act report, the top one percent of earners is estimated to evade $160 billion in taxes each year.
- With the Inflation Reduction Act of 2-22, the minimum tax on corporate profits on the largest, most profitable corporation is 15%.
- By collecting taxes already owed by wealthy people and large corporations, the Inflation Reduction Act will generate $124 billion in savings, according to the Congressional Budget Office.
- No family making less than $400,000 will see their taxes go up a penny.
Reducing the Deficit
- The Inflation Act will achieve hundreds of billions in deficit reduction.
- The deficit is projected to fall by more than $1.5 trillion this year after falling by more than $350 billion last year.
- 126 leading economists – including 7 Nobel Laureates, 2 former Treasury Secretaries, 2 former Fed Vice Chairs and 2 former CEA Chairs – have said reducing the deficit will help fight inflation and support strong, stable economic growth.
“The Inflation Reduction Act is a total game-changer for America. California is proud to stand with the President as we usher in a new era for unprecedented federal climate action. Here in the Golden State, we’re on the front lines of the climate crisis every single day – from weathering drought to fighting wildfires to dealing with extreme heat,” stated California Governor Gavin Newsom following the signing of the law.
Newsom continued to explain how the funding will protect Californians from climate change.
“The significant funding that will flow to states like ours is essential to protecting people from the worst impacts of climate change and accelerating our transition to a clean energy future,” said Newsom. “With our own record $54 billion Climate Commitment and world-leading efforts to cut carbon pollution and move toward an oil-free future, our state has been a global leader on climate change. But California can’t wage this battle alone – and thanks to today’s action by President Biden, we won’t have to.”