Washington — President Biden is signing the Inflation Reduction Act into law at the White House on Tuesday, finalizing a landmark piece of legislation aimed at fighting climate change, lowering health care costs and raising taxes on corporations.
The House and Senate passed the bill along party lines last week, after Democratic Sen. Joe Manchin and Senate Majority Leader Chuck Schumer struck a deal after many months of negotiations. The president is returning from vacation in South Carolina to sign the bill in a White House ceremony at 3:30 p.m. ET. First lady Jill Biden tested positive for COVID-19 on Tuesday and will remain in South Carolina, but the president returned a negative test and returned to Washington.
The Inflation Reduction Act provides almost $400 billion to fund energy and climate projects aimed at reducing carbon emissions by 40% in 2030, the most significant investment fight climate change ever. It will also limit out-of-pocket drug expenses for seniors on Medicare to $2,000 annually, and allow Medicare to negotiate with drugmakers on prescription prices. The legislation also sets a minimum 15% corporate tax rate for most large companies and provides $80 billion in funding to the IRS, allowing the agency to hire thousands of agents and revamp decades-old technological systems.
In the weeks ahead, the White House says the president will travel across the country to articulate how the bill will help Americans. He’ll also host an event celebrating the enactment of the bill on Sept. 6.
“This historic bill will lower the cost of energy, prescription drugs, and other health care for American families, combat the climate crisis, reduce the deficit, and make the largest corporations pay their fair share of taxes,” the White House promised in announcing the signing Tuesday.
Despite its name, the extent to which the bill will help lower inflation remains to be seen. A model from Penn Wharton says the bill won’t measurably affect inflation, and the Congressional Budget Office called the impact on inflation “negligible” this year before helping lower inflation in later years. Still, the White House points to a letter signed by more than 120 economists promoting the bill and insisting it will put “downward pressure on inflation by reducing the government’s budget deficit by an estimated $300 billion over the next decade.”
Democrats are hoping the passage of the legislation will boost their prospects ahead of the midterm elections this fall. Republicans, who uniformly oppose the bill, say it won’t fight inflation.
