Cicilline: Inflation Reduction Act Builds on Economic Recovery

Cicilline: Inflation Reduction Act Builds on Economic Recovery

Luke.Zakedis@m…

Fri, 08/12/2022 - 19:08

WASHINGTON, DC – Congressman David N. Cicilline (RI-01) today voted to pass the Inflation Reduction Act which will tackle inflation, address the climate crisis, and reduce costs for the American people. This bill builds on the economic recovery and progress spurred by the American Rescue Plan, the Bipartisan Infrastructure Bill, and the CHIPS and Science Act. 

 

“Although we have the lowest unemployment rate in 50 years, too many Americans and Rhode Islanders are struggling to get by because of the rising cost of goods. The Inflation Reduction Act will help us drive down costs for hardworking Americans while also tackling the climate crisis head-on. Importantly, this legislation will also lower prescription drug costs, an expense that has been plaguing families for far too long. I was proud to vote for this bill, and will continue to work with my colleagues to build on this progress as we deliver an equitable economy that works for everyone.” 

 

Background 

Inflation Reduction Act: Historic Action to Lower Kitchen-Table Costs, Act on Climate, Reduce Deficit 
The Inflation Reduction Act is historic legislation that will lower families’ kitchen table costs, creates millions of good-paying jobs delivering the most significant action on climate in history, and dramatically reduce the deficit.  The bill: 

  • Lowers the cost of health care:  reduces the cost of health care for millions by extending ACA enhanced subsidies for three more years, locking in lower health care premiums that save 13 million people an average of $800 a year and lowering drug prices. 

  • Slashes prescription drug costs: For the first time ever empowers Medicare to negotiate the price of prescription drugs; requires drug companies to pay Medicare rebates if they raise prices faster than the rate of inflation starting in October 2022; and creates a new out-of-pocket cap for Part D drug costs for Medicare beneficiaries of $2,000 a year, starting in 2025. 

  • Lowers the deficit and reduces inflation: makes a historic down payment on deficit reduction of approximately $300 billion to fight inflation 

  • Fights climate change: Through the largest environment investment in our nation's history, this bill will invest $370 billion in addressing climate change and reduce our carbon emissions by roughly 40 percent by 2030. 

Below is an overview of many of the key provisions in this historic legislation – including health care, climate, and tax provisions.  

HEALTH CARE 

Key Provisions: 

  • Empowering Medicare to Negotiate Drug Prices:  For the first time, empowers Medicare to negotiate prices for the highest cost single-source drugs in Medicare, a policy that Democrats have been trying to enact for years. The provisions save more than $100 billion over 10 years. It allows Medicare to negotiate lower prices for about 100 drugs over the next decade: 10 high-cost drugs beginning in 2026, 15 additional drugs in both 2027 and 2028, and 20 more in 2029 and thereafter. The Secretary must negotiate a price that is no more than the 75 percent of the non-federal Average Manufacturer Price, a price that is used by the Department of Defense and others. 

  • An Inflation Rebate for Seniors on Medicare:  Over the past 20 years, price increases for brand-name drugs in Medicare Part D have risen at more than twice the rate of inflation.  Under this bill, if drug companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to Medicare for the difference, beginning in October 2022.  Senate Republicans forced the removal of a provision that applied inflation rebates to drug sales to families with private health insurance. 

  • New $2,000 Out-Of-Pocket Cap for Part D Drugs for Seniors on Medicare:  Caps Part D out-of-pocket drug costs at $2,000 a year for seniors and individuals with disabilities on Medicare, starting in 2025. 

  • Caps Insulin Costs at $35 A Month for Seniors and Individuals with Disabilities on Medicare:  Caps Medicare beneficiaries’ insulin costs at $35 a month.  Republicans voted against capping insulin out-of-pockets costs for Americans with private health insurance keeping this vital protection out of the bill. 

  • Lowers Premiums in ACA Marketplaces for 13 Million Americans:  Extends enhanced ACA subsidies for three years, through 2025.  Without these provisions, these enhanced ACA subsidies would expire in January, causing increases in the premiums Americans would pay who are in the ACA marketplace and leading roughly 3 million Americans to lose their health coverage. 

ENERGY SECURITY AND CLIMATE CHANGE INVESTMENTS  

Key Points: 

  • The Inflation Reduction Act includes approximately $370 billion in investments addressing climate change – by far the single biggest climate investment in U.S. history.    

  • The Inflation Reduction Act's investments will restore American global leadership on climate change by reducing carbon emissions by roughly 40 percent by 2030. 

  • The Inflation Reduction Act lowers costs for American consumers, invests in American-made solutions that restore American global leadership and energy independence, and ensures that environmental justice and rural communities reap the benefits of the clean economy. 

  

Lower Consumer Energy Costs: 

  • Consumer Home Energy Rebate Programs:  Provides $9 billion in consumer home energy rebate programs, focused on low-income consumers, to electrify home appliances and for energy efficient retrofits. 

  • 10 Years of Consumer Tax Credits to Make Homes Energy Efficient:  Provides 10 years of consumer tax credits to make homes energy efficient and run on clean energy, making heat pumps, rooftop solar, electric HVAC, and water heaters more affordable. 

  • Consumer Tax Credits to Buy Used or New Clean Vehicles:  Provides a $4,000 consumer tax credit for lower/middle income individuals to buy used clean vehicles, and up to $7,000 tax credit to buy new clean vehicles. 

  • $1 Billion Grant Program to Make Housing More Energy Efficient:  $1 billion grant program to make affordable housing more energy efficient. 

  • Methane Emissions Reduction Program:  Leaked or intentionally wasted natural gas never makes its way to customers, but they are nevertheless stuck with the bill.  The Methane Emission Reduction Program will ensure consumers no longer pay for wasted energy. 

  

American Energy Security and Domestic Manufacturing 

Overview: The bill will support energy reliability and cleaner energy production coupled with historic investments in American clean energy manufacturing.  It includes over $60 billion for clean energy manufacturing in the United States across the full supply chain of clean energy and transportation technologies.  These manufacturing incentives will help alleviate inflation and reduce the risk of future price shocks by bringing down the cost of clean energy and clean vehicles and relieving supply chain bottlenecks. 

  • Production and Investment Tax Credits: The bill provides production and investment tax credits to accelerate U.S. manufacturing of electric vehicles, solar panels, wind turbines, batteries, and critical minerals processing, with an estimated total investment of $40 billion. 

  • Defense Production Act: Provides $500 million in Defense Production Act funding to support heat pump manufacturing and critical minerals processing. 

  • Domestic Manufacturing: Provides $2 billion for grants to retool existing auto manufacturing facilities to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them. 

  • Financing for Energy Infrastructure, Next Generation Technologies, and Tribal Energy Projects: Provides loans and loan guarantees for more than $300 billion in clean energy infrastructure, advanced technologies, and transmission projects in across the United States, including in historical energy producing communities and on Tribal lands. 

  • Investing in Our National Laboratories: The bill provides $2 billion for National Labs to accelerate breakthrough energy research. 

  

Decarbonize the Economy 

  • Overview:  The investments in the bill will reduce emissions in every sector of the economy, substantially reducing emissions from electricity production, transportation, industrial manufacturing, buildings, and agriculture: 

  • Tax Credits for Clean Sources of Electricity and Energy Storage:  Provides tax credits for clean sources of electricity and energy storage and roughly $30 billion in targeted grant and loan programs for states and electric utilities to accelerate the transition to clean electricity. 

  • Tax Credits and Grants for Clean Fuels and Clean Commercial Vehicles:  Provides tax credits and grants for clean fuels and clean commercial vehicles to reduce emissions from all parts of the transportation sector. 

  • Grants and Tax Credits to Reduce Emissions from Industrial Manufacturing:  Provides grants and tax credits to reduce emissions from industrial and manufacturing processes, including almost $6 billion for a new Advanced Industrial Facilities Deployment Program to reduce emissions from energy intensive industrial and manufacturing facilities like chemical and cement plants. 

  • Over $9 Billion for Federal Procurement of American-Made Clean Technologies:  Provides over $9 billion for Federal procurement of American-made clean technologies to create a stable market for clean products, including $3 billion for the U.S. Postal Service to purchase zero-emissions vehicles. 

  • $27 Billion Greenhouse Gas Reduction Fund:  Provides $27 billion for nonprofit, state, and local climate finance institutions that support the rapid deployment of low- and zero- emission technologies to help communities reduce and avoid pollution, especially in disadvantaged communities. 

Invest in Communities and Environmental Justice 

  • Overview: Building on regular engagement with Environmental Justice leaders from across the country, this package includes over $60 billion in environmental justice priorities to drive investments into disadvantaged communities.  Some of the highlight include: 

  • Environmental and Climate Justice Block Grants:  Provides Environmental and Climate Justice Block Grants, funded at $3 billion, that invest in community-led projects in disadvantaged communities and community capacity building centers to address disproportionate environmental and public health harms caused by pollution and climate change. 

  • Neighborhood Access and Equity Grants: Provides Neighborhood Access and Equity Grants, funded at $3 billion, that support neighborhood equity, safety, and affordable transportation access with competitive grants to reconnect communities divided by existing infrastructure barriers, mitigate negative impacts of transportation facilities or construction projects on disadvantaged or underserved communities, and support equitable transportation planning and community engagement activities. 

  • Grants to Reduce Air Pollution at Ports:  Provides grants to reduce air pollution at ports, funded at $3 billion, that support the purchase and installation of zero-emission equipment and technology at ports. 

  • $1 Billion for Clean Heavy-Duty Vehicles:  Provide $1 billion for clean heavy-duty vehicles, like school and transit buses and garbage trucks. 

  • Clean Energy Tax Credits:  Many of the clean energy tax credits also include either a bonus or a set-aside structure to drive investments and economic development in disadvantaged communities. 

Farmers, Forestland Owners, and Resilient Rural Communities 

  • Overview:  The bill will make historic investments to ensure that rural communities are at the forefront of climate solutions.  The investments affirm the central role of agricultural producers and forest landowners in our climate solutions by investing in climate-smart agriculture, forest restoration and land conservation.  It also makes significant investments in clean energy development in disadvantaged communities: 

  • Climate-Smart Agriculture Practices:  Provides more than $20 billion to support climate-smart agriculture practices. 

  • Grants to Support Healthy Forests:  Provides $5 billion in grants to support healthy, fire resilient forests, forest conservation, and urban tree planting. 

  • Tax Credits and Grants to Support the Domestic Production of Biofuels:  Provides tax credits and grants to support the domestic production of biofuels, and to build the infrastructure needed for sustainable aviation fuel and other biofuels. 

  • Grants to Conserve and Restore Coastal Habitats:  Provides $2.6 billion to conserve and restore coastal habitats and protect communities that depend on those habitats. 

TAXES 

The historic Inflation Reduction Act honors our promise to American families – and is fully paid for: 

  • Makes biggest corporations and ultra-wealthy pay their fair share:  is paid for by strengthening IRS enforcement against wealthy tax cheats, closing tax loopholes exploited by the wealthiest few, and implementing a 15 percent corporate minimum tax – which applies only to the 150 corporations making earning over $1 billion in profits that pay less than 15% in taxes. 

  • NO new taxes on families making $400,000 or less and NO new taxes on small businesses:  Not one middle class person filling out their taxes will find that they are facing higher taxes or higher tax rates. 

Meanwhile, Republicans are desperately spreading falsehoods in order to protect wealthy tax cheats and the obscene profits of Big Pharma – with false claims that have earned repeated factchecks and three Pinocchio lies about the Inflation Reduction Act’s investments in ensuring the IRS has the resources to take on those wealthiest few using well-heeled armies of lawyers and accountants to break the law and cheat on their taxes. 

  • Unlike honest, hard-working middle class families paying their fair share, the top 1% is estimated to not pay $160 billion in owed taxes each year. 

  • Treasury Secretary Yellen has specifically directed the IRS Commissioner not to increase the audit rate for households making under $400,000 a year. 

  • The IRS Commissioner himself, a Republican appointed by President Trump, has said, “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans.  As we have been planning, our investment of these enforcement resources is designed around Treasury’s directive that audit rates will not rise relative to recent years for households making under $400,000.” 

  • A bipartisan group of former IRS commissioners verified that “for ordinary Americans who already fulfill their tax obligations, audit scrutiny will decline, because the IRS will be better at selecting returns for examination.” […] This bill is about getting to the heart of the problem and pursuing high-end taxpayers and corporations who today illegally evade their tax obligations.”

Congress Number
August 12, 2022
August 12, 2022

JOIN THE TEAM

DNC Twitter