Congressional Democrats appear to be on the cusp of passing legislation that would dedicate $369 billion to combat climate change through a combination of grants, tax cuts, subsidies and other measures aimed at reducing carbon emissions.
In addition to its climate-related elements, the Inflation Reduction Act of 2022 (IRA) makes it possible for Medicare, the government-sponsored health insurance program for older Americans, to negotiate certain drug prices with the pharmaceuticals industry, a move expected to lower drug costs for all Americans. It also creates a minimum tax on large corporations, raises taxes on the wealthiest Americans, and will reduce the federal deficit by an estimated $300 billion over 10 years.
In a statement issued Thursday, President Joe Biden praised the legislation and called on lawmakers to pass it quickly.
The bill, Biden said, “makes the largest investment in history in combating climate change and increasing energy security, creating jobs here in the U.S. and saving people money on their energy costs. I look forward to the Senate taking up this legislation and passing it as soon as possible.”
Key provisions
A major element of the bill is a package of rebates, tax credits, and grants to help individual American families reduce their reliance on fossil fuels by subsidizing energy efficient home improvement projects and the purchase of electric vehicles.
The bill would dedicate $60 billion to helping establish clean energy production in the U.S. That includes tax credits to support $30 billion in spending on the domestic production of solar panels, wind turbines, batteries and other critical clean energy components as well as $20 billion in low-cost loans to support the manufacture of electric vehicles.
Other elements of the bill aim to support a broad range of decarbonization efforts across the economy, including $30 billion in grants and loans to states and electric utilities to “accelerate the transition to clean energy.”
The bill also earmarks tens of billions of dollars for “environmental justice” efforts meant to reduce the impact of climate change on disadvantaged communities and billions more toward increasing the climate resilience of farms and rural communities.
A catalyst for global action
“We could not be more excited about this huge breakthrough,” David Kieve, president of EDF Action, an arm of the Environmental Defense Fund, told VOA. “There’s been a shift in the attitudes of the American public in recent years towards an understanding that the jobs of the future are going to be in clean energy. And the only open question is, are they going to be here in the United States?”
Kieve said that in addition to creating those jobs in the U.S., he believes the investments in the bill will put the U.S. “on the fast track” to hitting the administration’s broader climate goals. He said he also expects it to catalyze action in other countries.
“What we’ve heard from other nations for quite some time, is that it’s nice that America has a president who’s saying the right thing about climate change, but do they really have the political will to execute on it?” he said. “When this bill is passed, and goes to President Biden’s desk, we will have answered that question definitively for the rest of the world and other nations will have no excuse but to get in line and follow our lead.”
Big promises
In an effort to push the bill across the finish line, Democrats in Congress have been touting its expected impact on the Biden administration’s pledge to reduce U.S. carbon emissions. While the $369 billion of climate-directed spending falls short of the $555 billion that the administration was seeking last year, many experts say that the IRA will have a major impact.
As negotiations were ongoing last week, Sen. Tom Carper, a Democrat from the state of Delaware who chairs the Senate Committee on Environment and Public Works issued a statement that said, “In what would amount to the most ambitious climate bill ever enacted, this legislation would put our nation on track to nearly 40% emissions reduction by the end of the decade, unleash the potential of the American clean energy industry, and create good-paying jobs across the country.”
Experts and activists who have reviewed the legislation have broadly agreed that the bill lives up to the hype.
In a statement calling the legislation “transformative,” Sierra Club President Ramón Cruz said the bill “will be the single largest investment in our communities — including those that have long been disproportionately impacted by climate-fueled disasters — and a healthy and secure future for all of us.”
Energy Innovation: Policy and Technology, a non-partisan energy and climate policy think tank analyzed the legislation and issued a report that read, in part, “We find that the IRA is the most significant federal climate and clean energy legislation in U.S. history, and its provisions could cut greenhouse gas emissions 37-41% below 2005 levels.”
Criticism from the right
Not all analyses of the bill’s climate provisions were positive. The Heritage Foundation, a conservative think tank, argued that the effort to move the country toward greater use of renewable energy is an infringement on Americans’ freedom.
“Energy impacts every aspect of our lives and every sector of the economy. By dictating how we produce and consume energy, this bill would dictate how we live our lives and limit the freedoms we enjoy,” the report argued. “It’s a pretext for control. And there is little to no regard for the high prices incurred by Americans and the costs that will arise for trying to achieve the left’s radical climate agenda. And what’s even worse, this is all pain for no gain.”
Republican Sen. Shelley Moore Capito, who represents West Virginia, a state that relies heavily on fossil fuel for both jobs and energy, also criticized the bill.
“It will hurt our industries in West Virginia, our hard working men and women in the oil and gas business or in the coal business,” she said. “That will also, I think, hamper our energy security in this country.”
Former EPA officials in support
A bipartisan group of former Environmental Protection Administration leaders released a statement Friday in support of the bill’s climate components.
“The legislation meets the moment of urgency that the climate crisis demands, and will position the U.S. to meet President Biden’s climate goals of reducing emissions 50-52% by 2030, while making unprecedented investments in clean energy solutions that will save families hundreds of dollars a year and create new, good paying union jobs across the country,” the former administrators said.
The group included Carol Browner, who ran the EPA under President Barack Obama, and Christine Todd Whitman, who ran the agency under President George W. Bush.
Complicated process
The bill is the product of months of negotiations among Senate Democrats, who had to make a number of concessions to appease centrist members of their party. Keeping all Democrats on board was essential because the Senate is currently divided 50-50 between Democrats and Republicans, with Democratic Vice President Kamala Harris able to cast deciding votes in the instance of a tie. Republicans appear united in opposition to the bill.
Democrats are moving to pass the bill through a process called “budget reconciliation” that makes legislation immune to the filibuster, a rule that allows a minority of senators to block a piece of legislation unless it receives 60 votes in the 100-member body. Under budget reconciliation, the Democrats’ 50 votes, plus Harris’s tie-breaker, would be sufficient to pass the Inflation Reduction Act even if Republicans unanimously oppose it.
If the Senate passes the bill, which could happen within days, it would then go to the House of Representatives, where it is expected to pass and to be sent to Biden for his signature.