REDUCED COSTS FOR COMMERCIAL MEDICATIONS
The bill, ushering in a long-awaited goal, would allow the Medicare program to negotiate prescription drug prices with drug companies, saving the federal government about $288 billion over the 10-year budget window.
That new revenue would translate into lower costs for seniors on medications, including a $2,000 cap for older adults who buy prescriptions from pharmacies.
The money would also be used to provide free vaccinations for seniors, who are among the few now not guaranteed free access, according to a summary document.
Seniors would also have insulin prices capped at $35 per dose. A provision to extend this insulin price cap to Americans with private health insurance was not consistent with Senate budget rules, and Republicans removed it from the final bill.
HELP PAY FOR HEALTH INSURANCE
The bill would extend subsidies provided during the COVID-19 pandemic to help some Americans who purchase health insurance on their own.
Under previous pandemic aid, the additional aid was due to phase out this year. But the bill would allow the support to continue for three more years and reduce insurance premiums for people who buy their own health insurance policies.
“LARGEST SINGLE CLIMATE CHANGE INVESTMENT IN US HISTORY”
The law would invest nearly $375 billion in climate change mitigation strategies over the decade, including investments in renewable energy generation and tax rebates for consumers buying new or used electric vehicles.
It includes $60 billion for a clean energy manufacturing tax credit and $30 billion for a manufacturing tax credit for wind and solar energy, which are seen as a means to encourage and support industries that can help reduce dependency on the planet Curb the country’s use of fossil fuels. The bill also provides tax credits for nuclear power and carbon capture technology, which oil companies like Exxon Mobil have invested millions of dollars in developing.
The bill would impose a new fee on excess methane emissions from oil and gas wells while giving fossil fuel companies access to more leases on state land and water.
A late addition, pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada and Colorado, would allocate $4 billion to address a mega-drought in the West, including conservation efforts of the Colorado River Basin, which totals nearly 40 million Americans rely on for drinking water.
There are tax breaks for consumers as an incentive to go green. One is a 10-year excise tax credit for renewable energy investments in wind and solar power. There are tax credits for purchasing EVs, including a $4,000 tax credit for used EV purchases and a $7,500 tax credit for new ones.
Overall, Democrats believe the strategy could put the country on a path to cutting greenhouse gas emissions by 40% by 2030 and “would represent by far the largest climate investment in U.S. history.”
HOW CAN YOU PAY FOR ALL THIS?
The bill’s biggest source of revenue is a new minimum tax of 15% for companies that generate more than $1 billion in annual profits.
It’s a way to crack down on about 200 US companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.
The new corporate minimum tax would take effect after the 2022 tax year and would bring in more than $258 billion over the decade.
Revenue would have been higher, but Sinema insisted on a 15% change in the company minimum to allow for a depreciation allowance used by the manufacturing industry. That saves about $55 billion in total revenue.
To win over Sinema, Democrats dropped plans to close a tax loophole that wealthier Americans have long enjoyed — the so-called carried interest, which under current law levies a 20% tax on wealthy hedge fund managers and others.
The left has been trying for years to raise the carried-interest tax rate, which was raised to 37% in the original bill to be more in line with upper-income brackets. Sinema would not allow it.
Keeping the tax break for the wealthy deprives the party of $14 billion in revenue it was counting on to fund the package.
ADDITIONAL MONEY TO PAY DEFICIENCES
With about $740 billion in new revenue and about $440 billion in new investment, the bill promises to allocate the difference of about $300 billion to deficit reduction.
Government deficits soared during the COVID-19 pandemic as federal spending soared and tax revenues fell as the country’s economy was roiled by shutdowns, closed offices and other massive changes.
The nation has seen deficits rise and fall in recent years. But the federal budget overall is on an unsustainable path, according to the Congressional Budget Office, which released a new report this week on long-term projections.
WHAT REMAINS?
That latest package, which suddenly emerged in late July after 18 months of stop-start negotiations had left many of Biden’s more ambitious targets behind.
Senate Majority Leader Chuck Schumer, DN.Y., struck a deal with Sen. Joe Manchin to revive Biden’s package and streamline it to bring the West Virginia Democrat back to the negotiating table. Next, they dragged Sinema, the remaining party holdout, with additional changes.
The package remains robust by typical standards, but nowhere near the comprehensive Build Back Better program that Biden once envisioned.
While Congress passed a bipartisan $1 trillion infrastructure bill for highways, broadband and other investments that Biden signed into law last year, the president’s and party’s other key priorities have been forgotten.
Among them is a continuation of a $300 monthly child tax credit that sent money directly to families during the pandemic and is believed to have largely reduced child poverty.
Plans for a free pre-kindergarten and community college and the country’s first paid family vacation program, which would have provided up to $4,000 a month for births, deaths and other essential needs, are also gone for now. ~Associated Press