The House will vote on - and likely pass - the Inflation Reduction Act this Friday after the Senate advanced the bill in a party line vote Sunday. The act is what is left of the centerpiece of the Biden administration's agenda - introduced in 2021 and dubbed the human infrastructure bill then. The much larger package failed last year due to opposition within the Democratic Party. As both bills were devised under the budget reconciliation process, they were designed to circumvent the Senate filibuster and be passed without bipartisan support.
Democratic moderates Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) emerged as the most vocal critics of Biden's Build Back Better agenda and the massive $3.5 trillion proposal. Manchin recently made a stunning turnaround, which made the current bill possible, albeit in its much slimmer format. While Manchin insisted on certain exceptions for the fossil fuel industry, Sinema was especially opposed to closing the carried interest loophole that allows private equity firms to pay a low tax rate on their profits. Manchin also secured support for a natural gas pipeline in his home state.
The new bill will introduce a 15-percent corporate minimum tax and raise money through a reform of Medicaid drug price negotiations and tax enforcement, bringing in around $737 billion dollars. $369 billion will be spent on climate change mitigation and energy security, while $64 billion will be used to extend the Affordable Care Act. The rest of the money - $300 billion - will go towards deficit reduction.
The older bill had also included tax cuts for those Americans making less than $400,000 per year, investments in housing, job training and education as well as lower prices for all prescription drugs, an agenda point found to be incompatible with budget reconciliation. There could be efforts to pass other parts of the Build Back Better agenda independently, the Biden administration has said, even though this might have to include Republican support to break the filibuster