(The Center Square) – The US House on Friday passed a $740 billion package that raises taxes on big business, funds green energy initiatives, allows the federal government to set caps on some prescription drugs and doubles the size of the Internal Revenue Service to grow audits.
The measure, dubbed the Inflation Reduction Act, was passed strictly along party lines, 220-207, with Democrats in support and Republicans opposed. In its analysis, Penn Wharton’s nonpartisan fiscal model indicated that it would actually increase inflationary price increases over the next two years.
The Senate added amendments to the measure on Sunday before passing it along party lines and returning it to the House for Friday’s approval vote. The bill is now heading to President Joe Biden, who has said he will sign it.
It’s “a robust cost-cutting plan that responds to the moment, ensuring our families survive and our planet survives,” House Speaker Nancy Pelosi, D-California, said moments before the vote. .
“Remember this day,” said House Minority Leader Kevin McCarthy, R-California. “When Democrats blocked a 700-page bill that raises your taxes and doubles the size of the IRS.”
Among other provisions, the law authorizes $386 billion in spending on clean energy and climate initiatives, including more than $270 billion in tax credits for the manufacture of solar panels, wind turbines, batteries, green energy technologies and electric vehicles.
Republicans say increased spending is good for businesses and will add to high inflation.
The law would allow the Department of Health and Human Services to set price caps on several prescription drugs, including a $35 monthly cap on insulin co-payments for individuals. Critics say the caps will discourage pharmaceutical companies from investing in the development of new drugs and lead to higher health care costs in the future.
It imposes a minimum income tax of 15% on companies with revenues over $1 billion. And it provides $80 billion to the IRS to hire about 87,000 new auditors.
The Biden administration argues the funds gained from auditing Americans will more than pay for the $80 billion in new spending, but critics say small businesses and middle-class families will pay the price.
“Sen. [Chuck] Schumer calls the Inflation Reduction Act a “game changer,” but pundits and economists call it a $740 billion scam that fails to reduce inflation, lower prices, or reduce prices. crack down on wealthy tax cheats,” Burgess said in a statement. “Instead of working to provide relief, the Inflation, Recession, and IRS Army Act is raising inflation, raising taxes on Americans earning less than $200,000 a year and weaponizing the IRS by funding 87,000 new agents to check all income levels. This partisan package only makes life harder and more expensive for ordinary Americans. »
“It would mainly be the 30 million small businesses in America,” said Chris Edwards of the CATO Institute, like The Center Square before. reported.