The proposal for the Inflation Reduction Law, approved on Sunday in the Senate, awaits approval in the Lower House on Friday
Although less ambitious than Biden’s original social spending plan, it represents a Democratic victory months before the legislative elections
It has been a hard journey of 18 months. On that long journey, which until recently seemed destined for failure, some of the treasures that would have established the largest expansion of the welfare state in decades have been lost. The ship, which was about to sink not only the Republican blockade but especially the opposition of two Democratic senators, Joe Manchin and Kyrsten Sinema, is now about to reach port. and the president, Joe Biden, is practically guaranteed in the next few days a legislative victory To leave historical achievements in fight against climate emergencyin health and in tax matter.
This is a victory that could be crucial for the president, with his popularity ratings at rock bottom, but which could point to his ability to advance legislation even with a precarious control of Congress. And it may also be important for Democrats in the face of November legislative electionsin which his control of the Chambers is at stake.
The proposal of Inflation Reduction Law, a rule much less ambitious than the Build Back Better package of three trillion dollars with which Biden initially proposed his social revolution, received green light in the Senate on Sunday. It did so days after Manchin and Sinema agreed to support the proposal after imposing some changes and after, also, restrictions were included to be able to vote on it through the so-called reconciliation process, which allows the approval of norms with a simple majority always that the provisions only affect federal budget issues.
The long-awaited 51-50 was reached with the definitive vote of the vice president, Kamala Harris, after a marathon session debate and vote on amendments that lasted all night on Saturday. And the Friday will be voted on House of Representatives, where democrat control gives almost certainly the rule will be approved.
It will only remain then for Biden to stamp his signature, who already issued a celebratory statement on Sunday. “I ran for president promising to make the government works again for working families and this is what this law does. Period,” he declared.
Climate, health and taxes
The proposal raises mobilize some 430,000 million dollars in the next decade. Before the alterations to the text over the weekend it had been calculated that it would generate some 740,000 million in revenue, with a potential reduction of 300,000 million in the deficit.
Includes an iunprecedented investment of more than 370,000 million destined to fight the climate change. Most of it (260,000 million) goes to tax subsidies that encourage clean energy. And it has been calculated that everything will help the US to cut their emissions by 40% by 2030 compared to the 2005 indices, bringing Biden closer to his promise of a reduction of between 50 and 52% of the one that the Supreme Court recently distanced him from.
The bill also includes the most significant changes in the public health system since Barack Obama’s health reform was approved. For the first time in history, Medicare, the system for people over 65, will be able to directly negotiate the price of medicines (although it will start modestly for only 10 drugs). The older ones, in addition, will see established in $2,000 the limit of what they may have to pay out of his own pocket for medicines. In addition, for three years extend subsidies so low and middle income people can get insured through Obamacare.
The fiscal measureThe most significant is the establishment of a 15% minimum corporate tax that have benefits of more than a billion dollars annually and that they had been using fiscal maneuvers to avoid federal rates, although to achieve Sinema’s vote companies in the hands of venture capital firms have been excluded. It also establishes a 1% share repurchase tax and reinforces investment in the Treasury so you can be stricter.
To get the green light for the bill, which despite its title it is not expected to have immediate effects on inflation, especially given that some provisions will take years to begin to apply, the Democrats have had to Leave ambitious measures initially proposed by Biden as the universalization of nurseriesthe establishment of paid maternity leave or the elimination of tax cuts approved by Donald Trump. that’s why voices progressives like the Bernie Sander they have questioned and criticized the bill (although the senator from Vermont, who has called it “a very modest step forward”ended up voting in favour).
Republicans, for their part, have attacked the rule as “partisan”, they have denounced that it will not contribute to reducing inflation and they assure that it will raise taxes on ordinary citizens, an extreme that Biden rejected in his statement, recalling that “he does not raise taxes on those who earn less than 400,000 dollars a year, not a penny ”.