Last night, Sen. Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer introduced The Inflation Reduction Act of 2022, a compromise to President Joe Biden’s proposed $4 trillion Build Back Better plan. After 18 months of negations, the Inflation Reduction Act addresses everything from prescription drug costs to corporate taxes to the climate, but contains significantly less than what Democrats pushed for with Build Back Better. The new act includes previously agreed upon health care provisions as well as a 15 percent corporate minimum tax, a proposal to close the carried interest tax loophole, and a provision for IRS enforcement.
Democrats estimate the bill will bring in $739 billion in revenue and will invest $433 billion in spending. It addresses Manchin’s goal of reducing the deficit, and would do so by $300 billion or more.
It also contains spending for “energy security and climate change,” although there are few specifics about what that includes. In a statement, Manchin alluded to investments that help the U.S. “decarbonize,” as well as new funding for multiple energy sources including fossil fuels and renewable energy.
“We will improve our energy security and tackle the climate crisis – by providing tax credits and investments for energy projects,” President Biden said in a statement. “This will create thousands of new jobs and help lower energy costs in the future.”
In response to the release of the Inflation Reduction Act of 2022 text, Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy (ACEEE), urged passage of the plan in the following statement:
“We need bold action to address both the climate crisis and the challenges of high energy bills. This plan includes historic investments that will reduce energy waste, cut costs for homes and businesses, and slash greenhouse gas emissions.
“It would enable major efficiency and electrification upgrades in millions of homes and buildings to save energy and improve comfort and health, especially for low- and moderate-income households. It would provide transformational investments to help American industry decarbonize and become more competitive using next-generation low-carbon technologies. It would accelerate the shift to clean, electric vehicles while widening access to affordable transportation and cutting air pollution in disadvantaged communities.
“We cannot wait. We urgently need these investments, and Congress should pass this bill into law.”