WASHINGTON – Today, Congresswoman Jahana Hayes (CT-05) voted to pass the Inflation Reduction Act of 2022, a legislative package to fight inflation, lower prescription costs, invest in domestic energy production and manufacturing, and reduce carbon emissions.
“Today, the House took an incredible step forward to building a healthier, cleaner, and fairer future for families across my district,” said Congresswoman Hayes. “my constituents are concerned about medical costs, the environment and cost of living. The Inflation Reduction Act will provide help to these families by fighting inflation, lowering health care costs, fighting climate change and reducing our carbon footprint. The effects of this legislation will improve the lives of millions struggling to afford day-to-day costs and future generations who will see the impacts of reduced carbon emissions and affordable prescription drugs. This legislation will also work to ensure our tax system is fair and equitable and corporations and the wealthiest Americans are paying their fair share. I support these groundbreaking policies and look forward to the President signing this bill into law.”
The Inflation Reduction Act will lower costs, create millions of good-paying jobs delivering the most significant action on climate in history, and dramatically reduce the deficit. The bill:
- Lowers the cost of health care and prescription drugs: reduces the cost of health care for millions by extending Affordable Care Act (ACA) enhanced subsidies for three years, locking in lower health care premiums that save 13 million people an average of $800 a year and lowering drug prices. For the first time ever, Medicare will be empowered to negotiate the price of prescription drugs; requires drug companies to pay Medicare rebates if they raise prices faster than the rate of inflation starting in October 2022; and creates a new out-of-pocket cap for Part D drug costs for Medicare beneficiaries of $2,000 a year, starting in 2025.
- Lowers the deficit and reduces inflation: makes a historic down payment on deficit reduction of approximately $300 billion to fight inflation.
- Invests in efforts to fight climate change and reduce carbon emissions: includes approximately $370 billion in investments addressing climate change – the single biggest climate investment in U.S. history, and works to reduce carbon emissions by roughly 40 percent by 2030.
126 of the top economists in the country — including seven Nobel Laureates — wrote the Inflation Reduction Act “will fight inflation and lower costs for American families while setting the stage for strong, stable, and broadly-shared long-term economic growth.” Below is an overview of many of the key provisions in this historic legislation – including health care, climate, and tax provisions.
- Empowering Medicare to Negotiate Drug Prices: For the first time, empowers Medicare to negotiate prices for the highest cost single-source drugs in Medicare, a policy that Democrats have been trying to enact for years. The provisions save more than $100 billion over 10 years. It allows Medicare to negotiate lower prices for about 100 drugs over the next decade: 10 high-cost drugs beginning in 2026, 15 additional drugs in both 2027 and 2028, and 20 more in 2029 and thereafter. The Secretary must negotiate a price that is no more than the 75 percent of the non-federal Average Manufacturer Price, a price that is used by the Department of Defense and others.
- An Inflation Rebate for Seniors on Medicare: Over the past 20 years, price increases for brand-name drugs in Medicare Part D have risen at more than twice the rate of inflation. Under this bill, if drug companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to Medicare for the difference, beginning in October 2022.
- New $2,000 Out-Of-Pocket Cap for Part D Drugs for Seniors on Medicare: Caps Part D out-of-pocket drug costs at $2,000 a year for seniors and individuals with disabilities on Medicare, starting in 2025.
- Caps Insulin Costs at $35 A Month for Seniors and Individuals with Disabilities on Medicare: Caps Medicare beneficiaries’ insulin costs at $35 a month.
- Lowers Premiums in ACA Marketplaces for 13 Million Americans: Extends enhanced ACA subsidies for three years, through 2025. Without these provisions, these enhanced ACA subsidies would expire in January, causing increases in the premiums Americans would pay who are in the ACA marketplace and leading roughly 3 million Americans to lose their health coverage.
ENERGY SECURITY AND CLIMATE CHANGE INVESTMENTS
Lower Consumer Energy Costs
- Consumer Home Energy Rebate Programs: Provides $9 billion in consumer home energy rebate programs, focused on low-income consumers, to electrify home appliances and for energy efficient retrofits.
- 10 Years of Consumer Tax Credits to Make Homes Energy Efficient: Provides 10 years of consumer tax credits to make homes energy efficient and run on clean energy, making heat pumps, rooftop solar, electric HVAC, and water heaters more affordable.
- Consumer Tax Credits to Buy Used or New Clean Vehicles: Provides a $4,000 consumer tax credit for lower/middle income individuals to buy used clean vehicles, and up to $7,000 tax credit to buy new clean vehicles.
- $1 Billion Grant Program to Make Housing More Energy Efficient: $1 billion grant program to make affordable housing more energy efficient.
- Methane Emissions Reduction Program: Leaked or intentionally wasted natural gas never makes its way to customers, but they are nevertheless stuck with the bill. The Methane Emission Reduction Program will ensure consumers no longer pay for wasted energy.
American Energy Security and Domestic Manufacturing
- The bill will support energy reliability and cleaner energy production coupled with historic investments in American clean energy manufacturing. It includes over $60 billion for clean energy manufacturing in the United States across the full supply chain of clean energy and transportation technologies. These manufacturing incentives will help alleviate inflation and reduce the risk of future price shocks by bringing down the cost of clean energy and clean vehicles and relieving supply chain bottlenecks.
Decarbonize the Economy
- The investments in the bill will reduce emissions in every sector of the economy, substantially reducing emissions from electricity production, transportation, industrial manufacturing, buildings, and agriculture.
Invest in Communities and Environmental Justice
- Building on regular engagement with Environmental Justice leaders from across the country, this package includes over $60 billion in environmental justice priorities to drive investments into disadvantaged communities. Some of the highlight include:
Farmers, Forestland Owners, and Resilient Rural Communities
- The bill will make historic investments to ensure that rural communities are at the forefront of climate solutions. The investments affirm the central role of agricultural producers and forest landowners in our climate solutions by investing in climate-smart agriculture, forest restoration and land conservation. It also makes significant investments in clean energy development in disadvantaged communities.
- The bill will make sure the biggest corporations and ultra-wealthy pay their fair share, and is paid for by strengthening Internal Revenue Service (IRS) enforcement against those not paying their fair share, closing tax loopholes, and implementing a 15 percent corporate minimum tax – which applies only to the 150 corporations making earning over $1 billion in profits that pay less than 15% in taxes.
- There will be no new taxes on families making $400,000 or less and no new taxes on small businesses; not one middle class person filling out their taxes will find they are facing higher taxes or higher tax rates.