free counter
World

Analysis: U.S. Senate Democrats’ bill can make mark on climate, healthcare costs

WASHINGTON, Aug 6 (Reuters) – The $430 billion climate change, healthcare and goverment tax bill the U.S. Senate began debating on Saturday night could deliver a significant win for Democrats and may lessen the carbon emissions that drive climate change while also cutting charges for older people.

Democrats hope the bill, that they try to push through the Senate over united Republican opposition, will enhance their chances in the Nov. 8 midterm elections, when Republicans are favored to capture almost all in a minumum of one chamber of Congress.

The package, called the Inflation Reduction Act, is really a dramatically scaled-back version of a prior bill backed by Democratic President Joe Biden that has been blocked by maverick Senate Democrats Joe Manchin and Kyrsten Sinema as very costly.

Register now free of charge unlimited usage of Reuters.com

“It’s what the American people want,” Senate Majority Leader Chuck Schumer told reporters. “We’re prioritizing the center class, working families, those struggling to access the center class, rather than what Republicans do: prioritize those towards the top.”

If the Senate passes the bill, which likely would need a tie-breaking vote from Vice President Kamala Harris, it could send the legislation to the Democratic-controlled House of Representatives, which intends to go on it through to Friday, and Biden could sign it into law.

Republicans blasted the bill as a spending “wish list” they argued would hurt an economy weighed down by inflation, saying it could kill jobs, raise energy costs and undermine growth at the same time once the economy is facing a potential recession.

“The Democrats latest reckless tax and spending spree is suffering from a significant case of policy whiplash,” said Republican Senator Chuck Grassley on Saturday. “The final thing businesses and families need at this time are tax hikes and a rash of poorly vetted policies creating a lot more confusion and uncertainty throughout the market.”

About 50 % of Americans — some 49% — support the bill, including 69% of Democrats and 34% of Republicans, in accordance with a Reuters/Ipsos poll conducted Aug. 3 and 4. The most famous part of the bill is giving Medicare the energy to negotiate drug prices, which 71% of respondents support, including 68% of Republicans.

Economists, who say the legislation may help the Federal Reserve combat inflation, usually do not expect a sizeable effect on the economy in coming months.

CLIMATE FOCUS

With $370 billion in climate-focused spending, it could end up being the most consequential climate change bill ever passed by Congress.

The bill offers businesses and families billions in incentives to encourage purchases of electric vehicles and energy-efficient appliances, in addition to to spur new investments in wind and solar powered energy that could double the quantity of new, clean electricity-generating capacity coming online in the usa by 2024, in accordance with modeling by the Repeat Project at Princeton University.

That could help put the U.S. on course to meet up its pledge to slash its greenhouse gas emissions in two by 2030 below 2005 levels, made finally year’s Glasgow climate summit.

While environmental groups largely embraced the bill, they noted that compromises secured by Manchin, who represents coal-producing West Virginia, would prolong U.S. usage of fossil fuels.

Those provisions include rules that could only permit the authorities to authorize new wind and solar technology developments on federal land when it’s also auctioning rights to drill for oil and gas.

DRUG COSTS

The legislation would lower drug charges for the federal government, employers and patients, said Juliette Cubanski, deputy director of the Medicare program at the Kaiser Family Foundation.

“Possibly the biggest effect will be for those who have prescription drug coverage through Medicare,” she said.

An integral change may be the provision allowing the federal Medicare health arrange for older and disabled Americans to negotiate lower prescription drug prices.

The pharmaceutical industry says price negotiation would stifle innovation. Negotiated charges for 10 of the costliest drugs for Medicare would apply starting in 2026, with that number rising until it caps at 20 per year in 2029.

The nonpartisan Congressional Budget Office estimates Medicare would save $101.8 billion over 10 years by negotiating drug prices.

The provision also introduces a $2,000 annual cap on out-of-pocket charges for older people through the Medicare program.

TAX PROVISIONS

The bill also imposes a fresh excise tax on stock buybacks, a late change after Sinema raised objections over another provision that could have imposed new levies on carried interest, currently a tax loophole for hedge fund and private equity financiers. The provision was dropped.

The excise tax is likely to raise yet another $70 billion in tax revenue each year, lawmakers said. That’s a lot more than the carried interest provision have been forecast to improve.

A written report by the nonpartisan Congressional Budget Office released ahead of that last change estimated the measure would decrease the federal deficit by way of a net $101.5 billion on the next decade.

That has been about one-third of the $300 billion in deficit reduction predicted by Senate Democrats, but excluded a projected $204 billion revenue gain from increased IRS enforcement.

Register now free of charge unlimited usage of Reuters.com

Reporting by David Morgan, additional reporting by Valerie Volcovici and Ahmed Aboulenein; Editing by Scott Malone and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Read More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker