What started as a $4 trillion effort during President Joe Biden’s first months in office to rebuild America’s public infrastructure and family support systems has ended up a much slimmer, but not unsubstantial, compromise package of inflation-fighting health care, climate change and deficit reduction strategies that appears headed toward quick votes in Congress. Lawmakers are poring over the $739 billion proposal struck by two top negotiators, Senate Majority Leader Chuck Schumer and holdout Sen. Joe Manchin, the conservative West Virginia Democrat who rejected Biden’s earlier drafts but surprised colleagues late Wednesday with a new one. What’s in, and out, of the Democrats’ 725-page “Inflation Reduction Act of 2022” as it stands now: LOWER PRESCRIPTION DRUG COSTS Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window. Those new revenues would be put back into lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies. Money would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document. HELP PAY FOR HEALTH INSURANCE The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own. Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for people who are purchasing their own health care policies. ‘SINGLE BIGGEST INVESTMENT IN CLIMATE CHANGE IN U.S. HISTORY’ The bill would invest $369 billion over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles. It’s broken down to include $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels. For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar. There are tax breaks for buying electric vehicles, including a $4,000 tax credit for purchase of used electric vehicles and $7,500 for new ones. In all, Democrats believe the strategy could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in U.S. history, by far.” HOW TO PAY FOR ALL OF THIS? The biggest revenue-raiser in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits. It’s a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all. The new corporate minimum tax would kick in after the 2022 tax year and raise some $313 billion over the decade. Money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in […]

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