US President Joe Biden has signed into law a $430 billion bill billed as the largest climate change package in history. The law aims to reduce greenhouse gas emissions and lower prescription drug costs, global agencies reported.
In Biden’s words, this law is the “last piece” of his domestic political agenda. He’s also trying to improve Democrats’ standing with voters three months before this fall’s midterm elections.
The law includes the largest federal investment to date in the fight against climate change, about $375 billion. It also raises to $2,000 the cap on annual prescription drug costs that are reimbursed under Medicare and will help about 13 million Americans pay for their health insurance.
The funds provided by the law are expected to come from increased taxes on large companies and wealthy individuals and entities. Part of the money under the law will go to reducing the federal deficit.
Republicans say the new business taxes will raise prices and inflation to levels higher than in 1981. Although Democrats have dubbed it the Deflation Act, nonpartisan analysts say its impact on prices will be little noticeable.
Because of the climate, the US Senate approved the “biggest investment in history”
The US Senate passed a $369 billion bill to fight climate change, lower drug prices, and raise some corporate taxes. It’s a big win for President Joe Biden, which Democrats hope will help their chances of retaining control of Congress in this year’s elections, Reuters reports.
The BBC described the package as “the biggest investment in American history”. It includes a target to reduce the country’s carbon emissions by 40% by 2030 (compared to 2005 levels).
After a debate that lasted more than 24 hours over the weekend, and despite efforts by Republicans to derail the package, the Senate approved the legislation, known as the Deflation Act, on a 51-50 vote along party lines. Vice President Kamala Harris (who presides over the Senate) had the deciding vote.
The vote in the House of Representatives is likely to take place on Friday and will bring lawmakers into the chamber amid their summer break. According to Senate Majority Leader Chuck Schumer, the “history-making” legislation introduces “the boldest clean energy package in American history.”
What is predicted
Because the document contains spending of 369 billion dollars (430 billion along with some measures other than climate) and net revenues of 740 billion euros, it was sharply criticized by the Republicans. Its goal is to reduce carbon emissions and redirect consumers to green energy.
Measures such as the possibility (for some households) of a tax credit of 7,500 dollars for the purchase of an electric car (4,000 – if it is second-hand) are foreseen. Such credits will also be available for the development of clean energy. It also plans to create a “clean energy technology accelerator” alongside aid to rebuild communities hit hardest by fossil fuel pollution.
Prescription drug costs for the elderly are also being reduced, with a cap on out-of-pocket co-payments. Tax rules on corporations and the wealthy are being tightened – a tool to fund these policies that will raise $739 billion (which will reduce the US budget deficit by nearly $300 billion).
Before the midterm elections
With this text, Democrats hope to help themselves in the Nov. 8 midterm elections, as Biden tries to deal with his low approval rating amid high inflation. Democrats argue that inflation will fall under the new bill because the measures are self-financing and even reduce the federal deficit over time.
Republicans dispute that, arguing that the new rules will only kill jobs and hurt economic growth at a time when it is at risk of recession.
A legislative trick was used to allow budget-related texts to avoid the 60-vote threshold in the 100-member Senate, requiring only a simple majority.
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