Democrats Pass the Inflation Reduction Act

On Sunday, August 7, 2022, Senate Democrats unanimously agreed to lower the cost of prescription drugs and health insurance, cap the price of insulin for Medicare recipients, empower Medicare to negotiate directly for the price of prescription drugs in 2026, require mega-corporations to pay taxes, and reduce the national deficit.

The 2022 Inflation Reduction Act also makes the largest investment ever to combat the existential crisis of climate change. It strengthens our energy security, in part by creating jobs manufacturing solar panels, wind turbines, and electric vehicles in America with American workers, and it will lower families’ energy costs by hundreds of dollars each year. The Act passed the Senate with 50 Democratic votes for, 50 Republican votes against, and a tie-breaking vote by the president of the Senate, VP Kamala Harris.

Medical Costs to Go Down

The bill caps seniors’ out-of-pocket spending for prescription drugs at $2,000 per year, no matter what their costs would otherwise be for their medications. And 13 million Americans covered under the Affordable Care Act (Obamacare) will have their health insurance premiums reduced by $800 through federal subsidies.

In addition, the Act puts a cap on the price of insulin paid by people with diabetes, but only for those covered by Medicare. That price will be a maximum of $35 per month. Unfortunately, the Senate Parliamentarian did not permit the requirement that private insurance providers rebate money to insulin users, because that measure would not involve government money (for a bill to be eligible for Reconciliation, requiring only 51 votes for passage in the Senate instead of 60, it must impact federal spending.) Democrats tried unsuccessfully to ensure that the price for insulin would be affordable for everyone who needs it. (See African Americans Need Affordable Insulin)

Minimum Corporate Tax Enacted

The bill pays for all this by establishing a minimum corporate tax so that our richest corporations start to pay their fair share. A 15% corporate minimum tax on their revenue—not on profits, which corporations move overseas—will be levied on all corporations doing business in the United States.

Nobody earning less than $400,000/year will be negatively affected by this bill. Nobody with income under that will pay higher taxes; instead, millions of Americans will see their monthly and annual expenses reduced through healthcare benefits and subsidies.

IRS $$ to Catch Wealthy Tax-Evaders

Another benefit of the bill is additional enforcement funding for the Internal Revenue Service. Now, with $80 billion in new funding, the agency will be able to hire tax auditors and upgrade its 30-year-old computer systems.

According to the Congressional Budget Office, every dollar invested in the IRS has a return on investment of six times, so $80 billion in funding will bring in over $480 billion in hidden, untaxed revenue. Nobody making less than $400,000 per year will see a tax increase.

The 2022 Inflation Reduction Act is a huge win for the American people. For the first time in a generation, the US House, Senate, and Administration have been able to focus on what’s good for everyday citizens.

President Biden on the Inflation Reduction Act

The Inflation Reduction Act will help Americans save money on prescription drugs, health premiums, and much more. It will make our tax system more fair by making corporations pay a minimum tax. It also makes the largest investment in history in combatting climate change and increasing energy security, creating jobs here in the US and saving people money on their energy costs.

I look forward to the Senate taking up this legislation and passing it as soon as possible.