President Joe Biden on Tuesday signed the Democrat-backed “Inflation Reduction Act” into law amid decades-high inflation.
In a signing ceremony at the White House Tuesday, Biden asserted the bill will be one of the “most significant laws in our history” and claimed that the bill was a win for “democracy,” though it was not supported by any Republicans in either the House or Senate. To applause, Biden also said that people who make less than $400,000 per year will “not pay a penny more” in taxes.
He was joined by House Majority Whip Jim Clyburn (D-S.C.) and Senate Majority Leader Chuck Schumer (D-N.Y.). “It shows how dedicated and persistent our caucus is. I want to give all 50 of my colleagues … huge credit for getting this bill over the finish line,” Schumer said of Democrats in the Senate.
The bill will direct spending, tax credits, and loans to bolster technology such as solar panels as well as equipment to reduce pollution at coal- and gas-powered power plants.
Another $64 billion would help 13 million people pay premiums over the next three years for privately bought health insurance under the Affordable Care Act, known as Obamacare.
Medicare would also gain the power to negotiate costs for pharmaceuticals, initially in 2026 for only 10 drugs. Medicare beneficiaries’ out-of-pocket prescription costs would be limited to $2,000 annually starting in 2025, and beginning next year would pay no more than $35 monthly for insulin, the diabetes drug.
Impact
Neither the White House nor top Democrats have said when the Inflation Reduction Act will begin to cut inflation.
The nonpartisan Congressional Budget Office concluded this month that the changes would have a “negligible” impact on inflation this year and next. Meanwhile, the University of Pennsylvania’s Penn Wharton Budget Model concluded that, over the next decade, “the impact on inflation is statistically indistinguishable from zero.”
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