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America Likes Dems' Inflation Reduction Act; GOP Votes No


August 2022 - After months of back and forth negotiations, Senate Majority Leader Chuck Schumer (D-NY) and Pro-Gun Democratic Senator Joe Manchin of West Virginia hammered out a scaled back version of President Biden's Build Back Better proposals and the finished product looks to be a winner for the country.


The details of the bill are described below, including the results of polling done by Reuters/Ipsos on various components of the bill. Those polling results show that America's Citizens approve of this legislation.


(Schumer, Manchin images from yahoo)

Known as the Inflation Reduction Act, the Schumer-Manchin bill addresses a number of long-standing policy issues. Most of the solutions will lower costs for American consumers and/or reduce the federal deficit. The Act was approved by the Senate in early August, by the House a week later, and signed into law by President Biden shortly thereafter. Here are the key provisions of the legislation:
    Lowering Medicare Drug Costs - Fulfilling a goal that Democrats and even some Republicans have advocated, the bill allows Medicare to negotiate drug prices with pharmaceutical companies. This will allow the Medicare program and Medicare recipients to buy many drugs at a lower price than they currently have to pay. In addition, the legislation caps out-of-pocket drug costs so no Medicare enrollee will pay more than $2,000 per year for prescription medications. 71% of Americans favor these Medicare changes.


    Permanent Funding for the Black Lung Disability Trust Fund - Unless the Republicans take control of Congress and repeal this provision, the 25,000 coal miners suffering from black lung disease can be assured the trust fund will continue paying their disability benefits.


    Tax Credits and Rebates for Clean Energy - Utilities and private companies who produce renewable energy (solar, wind, hydro, etc.) or who manufacture parts necessary for renewable energy production can qualify for tax credits. Consumers may qualify for tax credits if they purchase new or used electric vehicles or if they install geothermal, solar, or other renewable heating/cooling systems in their homes. 65% of the country is in favor of these credits.


    (Solar panel image from Modern Farmer)

    Extension of Affordable Care Act Subsidies - During the Covid pandemic, ACA subsidies were temporarily expanded to include middle-class wage earners. The Inflation Reduction Act extends these middle-class subsidies for three more years. This extension is supported by 64% of Americans.


    Support for Fossil Fuel Projects - In order to help reduce fuel prices and promote energy independence from the OPEC countries, new oil and gas leasing will be allowed in the Gulf of Mexico and off the coast of Alaska. Separately from this bill, the Democrats also pledged to make it easier to build energy infrastructure projects such as pipelines and natural gas export facilities. 55% of Americans agree with these changes.


    Methane Emissions Reduction Program - This program will subsidize gas and oil companies for investments that reduce their methane emissions. Methane is known to trap more heat in the atmosphere than carbon dioxide. Public support of these subsidies comes in at 58%.


    (The wealthy will help lower the deficit - image from Vox)

    Minimum Corporate Tax for Large Companies - Corporations that earn over a billion dollars in profits now will have to pay a 15% minimum income tax. With many large profitable corporations (like Amazon) not paying any federal income tax in recent years, this is a popular change to the tax code (61% of America approves) because most Citizens believe this change will make the tax code fairer.


    Funding to Catch Wealthy Tax Cheats - Estimates on the amount of taxes that America's wealthy underpay are as high as $1.4 trillion dollars. The new funding this bill provides will upgrade the IRS computer systems and allow for more audits of wealthy taxpayers. Despite what you may have heard on Fox News, President Biden has pledged that those new audits will be limited only to those Americans who earn over $400,000 per year. That approach makes sense from a fairness perspective and from a practical sense as well, because only above that level of income is where you will find the big tax cheaters and, consequently, where you will get the biggest bang for the audit buck.


    Excise Tax on Corporate Stock Buybacks - Last minute changes in the tax section of the bill (as demanded by Arizona Senator Krysten Sinema) stopped Schumer-Manchin from eliminating a tax break enjoyed by Wall Street hedge fund managers. Instead, a 1% excise tax on companies who buy back shares of their own company stock was substituted. Shark Tank's Mark Cuban likes this tax; he has called corporate stock buy-backs a poor use of corporate capital, one that artificially makes the company's financials look better so senior executives can get bigger bonuses.

(Biden discusses benefits of the legislation - image from yahoo)

For some reason, and despite the popularity these provisions enjoy with the American public, no Republican in either the Senate or the House voted in favor of the Inflation Reduction Act. It appears again that either the Republicans in Congress are out of touch with their constituents or they did not want to give the Democrat's a "victory" heading into the fall elections. Fortunately, the Dems' slim majorities in both Houses of Congress held firm and gave us another bill that will help the country.


Let's make sure we do all we can this fall not only to keep those Democratic majorities, but to increase them as well.







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