The law provides for the largest US investments in climate protection to date – and separates Republicans and Democrats along party lines. President Biden could use the success badly.
After a long dispute over billions in investments in climate protection and social affairs, the US House of Representatives is voting on a comprehensive legislative package. “On Friday (today) House Democrats will pass the landmark anti-inflation bill and submit it to the President,” House Speaker Nancy Pelosi wrote to her fellow Democrats. The Senate approved the bill on Sunday with a narrow majority of Democrats in that chamber. All Republicans voted against.
US President Joe Biden has already announced that he will sign the law. He spoke of the largest investments by the United States to date to combat climate change. Biden’s original plans for climate protection and social reforms were among the core projects of his tenure. The current package is a compromise because of disagreements within his Democratic Party. It contains only a fraction of what Biden originally wanted to push through.
However, the fact that there is a vote at all is a remarkable success for the President – until recently this was hardly expected. Biden has struggled with poor approval ratings for a long time. According to statistics from the Fivethirtyeight website, which brings together various surveys, only 40 percent are satisfied with their work, and more than 55 percent are not.
Fivethirtyeight’s simulations calculate a high probability that the Republicans will win a majority in the House of Representatives in November’s congressional elections. Then Biden will have an even harder time with legislative projects.
The so-called anti-inflation bill that is now up for a vote is much broader than its name suggests. It includes the following aspects, among others:
climate protection
Around 370 billion dollars (about 359 billion euros) are to be invested in this area over the next ten years. The aim is to promote the manufacture of solar cells and wind turbines. Financial incentives are also provided for the construction of electric car plants. Energy research should be promoted. The measures should lead to a reduction in CO2 emissions in the USA of around 40 percent by 2030.
Cheaper drugs
The state health insurance for older or disabled people (Medicare) is to be allowed for the first time to negotiate the prices for certain expensive medicines directly with the pharmaceutical companies. The Democrats expect savings of almost $290 billion over ten years. By 2025, patient co-payments for medication will be capped at $2,000 per year. In addition, health insurance premiums are expected to decrease for millions of Americans.
Steer
The legislative package is intended to close tax loopholes. Companies with profits of more than one billion dollars a year should pay at least 15 percent in taxes in the future. This minimum tax should flush around 313 billion dollars into the household coffers over the next ten years. The IRS is expected to receive an additional $80 billion over the same period. This should enable the IRS to collect an additional $124 billion in taxes from the wealthy and highly profitable companies. According to the US government, families with a household income of less than $400,000 a year should not be affected.
deficit reduction
The US government assumes that the legislative package can reduce the state deficit by more than $300 billion. This should also slow down inflation, which was 8.5 percent in July.
Fivethirtyeight Democrat US government’s summary of the legislative package
Source: Stern
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