Joe Biden is back from his vacations with a mission. With his approval ratings falling due to the rising cost of living, the US president wants to get back on course and is shifting the focus onto his flagship plan: the Inflation Reduction Act. Biden is set to embark on a cross-country effort to promote the bill, which will be signed into law on Tuesday at the White House.
In the coming weeks, Biden will “travel across the country to highlight how the bill will help the American people,” the White House said in a statement. The US president will also host an event to celebrate the enactment of the bill at the White House on September 6.
The Inflation Reduction Act has given back some impetus to the Democrats ahead of the November midterm elections, where they risk losing control of the House of Representatives and in the Senate. Now, at least, they have a major political achievement to sell. Despite its name, the Inflation Reduction Act will not help reduce inflation in the short term (the effect of relevant measures will not be seen for a few years), but it has come at a moment when inflation appears to have peaked and is beginning to ease.
“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.
Just two months ago, the passage of the bill appeared to be dead. But Biden and Senate Majority Leader Chuck Schummer were able to secure its support, although this required significantly reducing the bill’s scope to appease two wayward senators.
Since the Senate passed Biden’s landmark bill on August 7, the White House has flooded journalists with statements, reports and arguments about the benefits of the measure. Now, Biden wants to bring that message closer to the American people with a cross-country tour. In parallel, Biden will also participate in campaign events such as the Democratic National Committee in Montgomery County on August 25.
The message Biden wants to send is that he has approved a law that benefits families by going after the corporate interests defended by Republicans, who voted en bloc against the legislation.
The part of the law that most directly affects citizens concerns reducing the cost of medicine. According to the White House, Americans pay two to three times more than citizens of other countries for prescription drugs. For the first time, Medicare – the public insurance that principally protects the over-65s – will be able to negotiate drug prices directly with big pharmaceutical companies, which is expected to cut costs. Between five and seven million Medicare beneficiaries could pay less for their prescription drugs thanks to this provision.
In addition, 50 million beneficiaries “will have the peace of mind knowing their costs at the pharmacy are capped at $2,000 per year,” the White House said. This will directly benefit the 1.4 million people who spend more than $2,000 on medicine, especially those with chronic or serious illness. And 3.3 million Medicare beneficiaries with diabetes “will benefit from a guarantee that their insulin costs are capped at $35 for a month’s supply.” This cap was intended to apply to insulin in the private market, but the Republicans blocked the measure.
According to the White House, under the health package, 13 million Americans will save an average of $800 per year on health insurance premiums and three million more Americans will have health insurance. In the United States, 8% of the population does not have medical coverage of any kind, although this is at record-low numbers.
The bill also aims to combat climate change. For families, it includes incentives, tax credits and aid to buy electric cars (although with severe limitations that have drawn criticism from the industry), install more efficient heat pumps and appliances and to install more efficient solar panels.
For businesses and communities, the bill has incentives to increase the number of solar panels, wind farms and large batteries for energy storage. The bill also allocates funds to protect forests and areas threatened by the effects of climate change.
These measures are principally financed with a tax reform for large companies. The bill imposes 5% minimum tax on corporations that make more than $1 billion each year, but that use deductions, tax credits and other fiscal maneuvers to reduce their tax rates. The package also incorporates a 1% excise tax on the repurchase of stock by large companies.