With global climate extremes devastating many parts of the world America is putting money where its mouth is in the passage today of a hugely ambitious climate and tax bill.
This morning the 755-page bill known as the Inflation Reduction Act was expected to squeak through the Senate with the barest minimum of 50 votes, all coming from Senate Democrats, and Vice President Kamala Harris casting the tiebreaking 51st vote. It did despite some anxious moments in the afternoon because of Arizona Senator Kyrsten Sinema hedging her support over some very narrow and specific demand to preserve a tax break for venture capitalists and hedge fund managers which lets them pay much lower taxes than regular taxpayers.
That insistence on such a narrow tax break both baffled and angered liberal Democrats but in the end, she won that concession in return for her support for the bill at the last moment. Sinema also extracted $4 billion to help drought-hit Western states.
Senator Joe Manchin III of West Virginia, her compatriot in vehemently standing in the way of President Joe Biden’s overarching climate agenda for months, too got his pound of flesh on behalf of his coal-producing state. He secured commitments to complete construction of a natural gas pipeline in West Virginia. He also got his demand for tax credits for carbon capture technology.
Notwithstanding those politically expedient concessions, the fact that the bill invests nearly $400 billion in climate and energy-related programs makes it unprecedented in US history giving Biden the badge as America’s most climate-friendly president. Experts say those investments could lead to America cutting down greenhouse gas emissions some 40 percent below the 2005 levels by 2030. That is a signature legacy for a president not being able to lift his sagging poll numbers despite some significant legislative and other successes.
This week, in particular, has been extraordinary for Biden beginning on Monday with the precisely conducted lethal drone strike on a house in Kabul that killed Al Qaeda leader Ayman al-Zawahiri. That was followed by the Senate passing on Tuesday the Burn Pits Bill whose language explains it thus: “This bill requires the Department of Veterans Affairs (VA) to concede, for the purposes of health care benefits and wartime disability compensation, that a veteran was exposed to certain toxic substances, chemicals, and hazards from burn pits if such veteran served on active duty in a covered location during a specified time frame (unless there is affirmative evidence to establish that the veteran was not exposed during such service). A burn pit is an area used for burning solid waste in open air without equipment.”
That was followed on Wednesday by voters in Kansas defeating an amendment to the abortion law that would have severely restricted the medical procedure. Add to that Thursday when Manchin and Sinema agreed to support the bill that passed today and finally a robust jobs report that said America added 528,000 jobs in July. By any measure even half of those accomplishments should have lifted any president to the heights of popularity but not so with Biden. One part of the reason is said to be that Americans do not “feel” the effects of these achievements because of the inflation.
Apart from its massive investment into climate and energy, another piece of this bill is also of great and more immediate benefit to the people. It lowers the cost of prescription drugs. It does that by allowing for the first time Medicare to negotiate the prices of medicines directly and laying the upper ceiling on the amount that recipients pay out of pocket for drugs each year at $2,000. It also extends larger premium subsidies for health coverage for low- and middle-income families under the Affordable Care Act for three years.
What is remarkable about the bill is that everything in it is paid for by significantly increasing tax on corporations. Large corporations will now have to pay a 15 percent corporate minimum tax. The bill also imposes a new tax on company stock buybacks.
Barely three months before the midterm elections in November, these are extraordinary gains for Biden and Democrats. However, it is not a given that they would swing the November outcome such that it would keep both the houses for the Democratic Party.