The US House of Representatives will vote Friday on a $430 billion bill to fight climate change and lower prescription drug prices, in what Democrats view as a major political win for President Joe Biden ahead of November’s midterm elections.
Democrats say the legislation will help reduce the federal deficit, cut domestic greenhouse gas emissions, allow Medicare to negotiate lower drug prices for the elderly and ensure corporations and the wealthy pay the taxes they owe.
Titled the “Inflation Reduction Act,” the measure passed the Senate along party lines on Sunday after a marathon, 27-hour session. House approval would send the bill on to the White House for Biden to sign into law. A vote on passage was expected on Friday afternoon.
“House Democrats will pass and send to the president the landmark Inflation Reduction Act,” House Speaker Nancy Pelosi, the chamber’s top Democrat, predicted this week in a letter to her party colleagues.
“This bill makes a tremendous difference at the kitchen table of America’s families,” Pelosi said.
Republicans oppose the legislation, warning that it will kill jobs by raising corporate tax bills, further fuel inflation with government spending and inhibit the development of new drugs.
Business groups have had a mixed reaction to the bill, which offers the prospect of higher tax bills for some companies while at the same time giving protections to the fossil fuel industry.
The bill’s main revenue source is a novel 15% corporate minimum tax aimed at stopping large, profitable companies from gaming the Internal Revenue Service code to slash their tax bills to zero.
Investors looking to pour cash into clean energy products can expect at least a decade of federal subsidies through long-term tax credits for wind and solar and new credits for energy storage, biogas and hydrogen. Developers who use U.S.-made equipment or build in poorer areas will find additional support.
But the bill does not leave the U.S. fossil fuels industry out in the cold. Some provisions allow the federal government to authorize new wind and solar energy developments on federal land only when it is also auctioning rights to drill for oil and natural gas.
A $7,500 tax credit to encourage U.S. consumers to buy electric vehicles could not be used for most EV models on the market, according to major automakers, who warn that the legislation will put achieving U.S. EV adoption targets for 2030 in jeopardy.
To be eligible for the credit, vehicles must be assembled in North America, which would make some current EVs ineligible as soon as the bill takes effect.
The bill has been more than 18 months in the making. It represents a final version of Biden’s original sweeping Build Back Better plan, which had to be whittled down in the face of opposition from Republicans and key legislators from his own party.
Democrats, who have been weighed down for months by inflation and Biden’s anemic job approval numbers, hope the legislation will help them at the polls in November, when voters decide the balance of power in Congress ahead of the 2024 presidential election.
Biden himself plans to travel across the country to tout the bill along with a series of other legislative victories as a win for voters and a defeat for special interests.
Republicans are favored to win a majority in the House in November and could also take control of the Senate.
But in a hopeful sign for Democrats, Biden’s public approval has risen this week to its highest level since early June, as a result of recent legislative successes, according to a Reuters/Ipsos opinion poll.
The two-day national poll found that 40% of Americans approve of Biden’s job performance, a level of support that is historically low for a U.S. president but up from his rock-bottom level of 36% in May.
In addition to the Inflation Reduction Act, Biden has gained momentum from legislative wins aimed at boosting U.S. competitiveness against China and expanding healthcare benefits for millions of veterans exposed to toxic burn pits. About half of Americans — some 49% — support the climate and drug pricing legislation, including 69% of Democrats and 34% of Republicans, according to a Reuters/Ipsos poll conducted Aug. 3 and 4. The most popular element of the bill is giving Medicare the power to negotiate drug prices, which 71% of respondents support, including 68% of Republicans.