U.S. Senate Passes Sweeping Inflation Reduction Act

U.S. Senate Passes Sweeping Inflation Reduction Act

Thomas Nelson
August 8, 2022
News, Politics
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On Sunday, August 7th, the United States Senate passed the Inflation Reduction Act of 2022, which includes $369 billion for clean energy and climate. This legislation, should it be signed into law, would put the United States on track to reduce its carbon footprint to 2005 levels by 2030.

48 Democrats, and 2 Independents, who both caucus with the Democrats, voted in favor of the bill’s passage. All Republicans voted no. Vice President Kamala Harris cast the tie-breaking vote, fulfilling a duty of the vice presidency should the Senate be split 50-50 on a vote.

Democratic leadership in congress has been pushing for the bill, dubbed the Build Back Better Act, since early in President Biden’s term, but initially met with resistance from center-right Democratic Senators Sinema and Manchin, denying Democratic leadership the 50 votes they needed for passage.

The bill represents the single largest investment in reversing climate change in U.S. history. It also makes changes to health care policy by giving Medicare the power to negotiate the prices of prescription drugs for the first time.

Additionally, The Inflation Reduction Act would reduce the deficit, be paid for through new taxes, and increase the Internal Revenue Service’s ability to collect taxes. These measures would raise more than $700 billion over the next decade and spend $369 billion on reducing carbon emissions.

President Joe Biden said in a statement that the Inflation Reduction Act of 2022 “makes the largest investment ever in combating the existential crisis of climate change.”

“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” Biden said.

What’s in the Inflation Reduction Act?

The bill will include:

$60 billion invested in U.S. clean energy manufacturing
- $30 billion in incentives for wind, solar, and battery manufacturing
- $10 billion in tax credits for electric car construction facilities and other renewable energy tech
- $2 billion in grants to existing electric vehicle factories
$60 billion in investments to low-income communities to reduce pollution
$30 billion to states and electric utilities to transition to cleaner energy
$27 billion for clean energy technology deployment
Over $20 billion to agricultural practices that reduce carbon pollution

The bill also includes several customer rebates and tax incentives, including:

A $7,500 tax credit for the purchase of a new electric vehicle
A $4,000 tax credit for the purchase of a used electric vehicle
Restoring a tax deduction for home solar installations up to 30% of project costs until 2032.
$9 billion in tax incentives and rebates for home energy efficiency

The bill is being applauded by clean energy groups as a massive step forward. 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,” the American Council for an Energy-Efficient Economy wrote in a statement.

What’s next?

The Inflation Reduction Act of 2022 will now go to the House of Representatives for a vote, which is expected to pass. Following its passage in the house, it will go to President Biden’s desk for his signature.