[Epoch Times, August 13, 2022](The Epoch Times reporter Lin Yan comprehensive report) The U.S. House of Representatives on Friday (August 12) narrowly passed a sweeping tax, health and climate bill, which will be used in the midterm elections. One more addition to the Democrats’ list. The bill also includes a swift end to reliance on China’s battery supply chain.
The Reducing Inflation Act of 2022, also known as the Energy Security and Climate Change Investment Act, passed the $430 billion spending bill by a 220-207 vote in the House of Representatives on Friday. All Democrats voted yes, and basically all Republicans voted no.
The bill previously passed the Senate on Aug. 7, with all Democrats voting in favor and all Republicans opposed, with Vice President Harris casting a key vote on a tie basis. President Biden said Friday that he will sign the bill next week.
Bill focuses on climate coverage, health care, corporate taxes and more
The Reducing Inflation Act is a scaled-down and reshaped version of the past Build Back Better (BBB). The Build It Back proposal has stalled in the Senate due to opposition from all Republicans and Democratic Senator Joe Manchin. After much negotiation, Manchin finally agreed to a Democrat version of the “Inflation Reduction Act” that was ultimately passed on a partisan line in the Democratic-led Senate, despite Republicans’ opposition to the climate deal.
The bill, which focuses primarily on climate issues but also includes important corporate taxes and prescription drug and health care benefits, is partly aimed at curbing inflation over the next decade.
The bill’s largest spending is on climate, with a total of $369 billion, down from $550 billion in the Build Back Better proposal.
Specifically, the climate spending component includes $60 billion for solar panel and wind turbine manufacturing (and $30 billion in credits for new projects), $60 billion for poor climate-vulnerable communities, and $27 billion for For clean technology research and development, $20 billion to reduce agricultural emissions, $5 billion to protect forests, and $4 billion to fight drought in Western states, credit for new battery manufacturing, and other climate-related priorities.
Some of this money will go towards carbon capture. At the same time, it imposes a fee on excess methane emissions.
The bill also provides a number of home-related credits, including heat pumps, induction cookers, electric service upgrades, home battery storage, extended rooftop solar credits, and electric vehicle tax breaks.
On the health insurance front, the bill would allow Medicare to negotiate low prices for 10 high-cost drugs starting in 2026. By 2029, that number is expected to grow to 20 drugs. In addition, the bill allows for caps on the cost of some drugs, but mainly for red and blue cards (Medicare, Medicare).
Bill to impose corporate tax on big corporations, expand IRS enforcement
The bill promises to bring in $739 billion in future revenue and $433 billion in spending (including $369 billion in energy and climate change programs and $64 billion in health care subsidies), and cut as much as $64 billion over the next decade $300 billion deficit.
To get there, Democrats plan to impose a minimum 15% corporate tax on companies with more than $1 billion in profits and limit their carried interest. According to the Joint Commission on Taxation, 150 companies will be affected.
The bill also allocates $80 billion to increase enforcement by the Internal Revenue Service (IRS) and ensure wealthy individuals and corporations do not evade taxes. Also included in the bill is a 1% excise tax on share buybacks.
Bill calls for automakers to quickly end reliance on China’s battery supply chain
The bill contains an element related to China. The bill requires automakers to assemble electric vehicles in North America and quickly end their reliance on China’s battery supply chain to qualify for tax breaks of up to $7,500.
The requirements are designed to stimulate domestic manufacturing and a more diverse supply chain for EV materials, which are currently heavily reliant on China. Mineral and battery material requirements will take effect from 2023.
At present, this clause has attracted the attention of car manufacturers.
Hyundai Motor, LG Energy Solutions Co., Samsung SDI Co. and SK On Co. have “concerns and difficulties” about the provisions in the U.S. tax and energy bill, South Korea’s trade ministry official said in a statement on Thursday.
Bipartisan lawmakers have polarized views on the bill
House Speaker Nancy Pelosi praised the bill ahead of the vote as a “package for the people” that expands health and financial security for current and future generations.
Senate Majority Leader Chuck Schumer said the bill would allow the U.S. to achieve roughly 40 percent emissions reductions by 2030, the largest climate investment to date in U.S. history.
While some radical Democrats complained that the bill was not as broad as they had hoped, the entire caucus eventually came together to support the bill.
Republicans argue that the bill will do little to curb price increases and argue that the new tax will ultimately hit ordinary Americans because these companies could raise wages or increase employment now that the economy is slowing.
House Minority Whip Steve Scalise criticized the Reducing Inflation Act, which should be renamed the Inflation, Recession, and IRS Army Act.
Minority Leader Kevin McCarthy, in a speech about 50 minutes in the House of Representatives on Friday, called the Lower Inflation Act a “misguided and inactive bill” that would further spur inflation, And to draw attention to the rise in US prices.
“More than any other majority in history, Democrats are obsessed with spending other people’s money, no matter what our country can afford,” McCarthy said.
Responsible editor: Ye Ziwei