Inflation Reduction Act
The Inflation Reduction Act is a victory for all Americans and our planet. The Inflation Reduction Act delivers transformative investments to the American people, including cutting healthcare costs, protecting our planet, and reducing rising inflation hurting consumers. This bill cuts the deficit, and will not raise taxes on residents, families, or small businesses in my district. I am proud to pass legislation that will cut kitchen table costs for Americans.
An overwhelming majority of the American public supports the Inflation Reduction Act's transformative health care, climate, and inflation-fighting measures. Data for Progress found that 73 percent of likely voters support the Inflation Reduction Act – including 95 percent of Democrats, nearly three-quarters of Independents, and more than half of Republicans.
According to 126 leading economists—including seven Nobel Prize winners, three former chairs of the Council of Economic Advisers, and two former Treasury Secretaries — this legislation "will fight inflation and lower costs for American families while setting the stage for strong, stable, and broadly-shared long-term economic growth." This bill will not raise or implement new taxes on families making $400,000 or less, or on small businesses.
Table of Contents:
Lower Healthcare Costs
Lower Out-of-Pocket Drug Costs
Capping Insulin Costs at $35/month
Tackling Climate Change
Boosting Domestic Manufacturing
Safeguarding American Energy Security
Lowering Consumer Energy Costs
Investing in a Clean Energy Economy
Investing in Agriculture and Water
Addressing the Drought Crisis
Supporting Farmers, Ranchers, and Farming communities
Taxes and Reducing our Deficit
Lower Healthcare Costs
The Inflation Reduction Act will make health coverage more affordable for millions of Americans by extending key Affordable Care Act (ACA) tax credits through 2025.
There are an estimated 24,792 people in the district who are currently enrolled in subsidized marketplace health insurance coverage through the ACA. In 2022, they will pay an average annual premium of $592. Without the Inflation Reduction Act, the average premium for these individuals would have increased by 151%, to $1,487, in 2023.
Thanks to the Inflation Reduction Act, the average enrollee is expected to save $895 in premiums starting next year.
Families: A family in the district with two adults, two children, and a household income of $75,000 could save $2,832 on their premiums next year.
Single Parents: A single-parent household with one adult, one child, and a household income of $30,000 could save $1,260 on their premiums next year.
Seniors: A household of two adults over the age of 60 with a joint income of $70,000 could save $13,908 on their premiums next year.
Lower Out-of-Pocket Drug Costs
In 2020, an estimated 88,000 people in the district were enrolled in Medicare Part D. The total cost of prescriptions filled by these beneficiaries in 2020 was $494 million. This law caps Medicare beneficiaries' annual out-of-pocket costs for prescription drugs covered by Medicare Part D at $2,000 per year starting in 2025, benefiting an estimated over 1.4 million Medicare beneficiaries annually.
For the first time in history, this law authorizes Medicare to negotiate the prices of high-cost prescription drugs starting in 2023. The Inflation Reduction Act will also require drug manufacturers to pay a rebate to Medicare if they increase their prices faster than the rate of inflation.
Capping Insulin Costs
An estimated 5,700 Medicare beneficiaries in my district used insulin in 2020. Beginning in 2023, monthly copayments for insulin products will be capped at $35 per month for seniors and individuals with disabilities on Medicare, benefitting up to 1.7 million people who use insulin.
Tackling Climate Change
The Inflation Reduction Act makes the largest climate investment in American history.These investments willrestore America's global leadership on climate change byreducing carbon emissions by roughly 40 percent by 2030. This law cuts costs for American consumers safeguards our energy security and will create good-paying American jobs.
Boosting Domestic Manufacturing and Safeguarding American Energy Security
The Inflation Reduction Act supports energy reliability and cleaner energy production coupled with historic investments in American clean energy manufacturing.
Tax Credits for Clean Sources of Electricity and Energy Storage: $30 billion in production tax credits to advance domestic production of solar panels, wind turbines, batteries, and other renewable energy products.
Investing in Clean Energy Production and Creating Jobs: $10 billion investment tax credit for clean technology manufacturing facilities to build electric vehicles, solar panels, and wind turbines.
Defense Production Act: Provides $500 million in Defense Production Act funding to support heat pump manufacturing and critical minerals processing.
Domestic Manufacturing: Provides $2 billion for grants to retool existing auto manufacturing facilities to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.
Investing in Alternative Fuel Sources: Includes provisions from Costa's bill, H.R. 3072, which would extend and modify the tax credits for biodiesel, renewable diesel, and alternative fuels through 2024. It will provide economic relief for producers, fuel retailers, truckers, and consumers as they plan and adjust to alternative fuel sources.
Lowering Consumer Energy Costs
The law includes direct consumer incentives to buy energy-efficient and electric appliances, clean vehicles, and rooftop solar, and invest in home energy efficiency, with a significant portion of the funding going to lower-income households and disadvantaged communities.
Consumer Home Energy Rebate Programs: $9 billion in consumer home energy rebate programs, with a focus on uplifting low-income consumers to help electrify home appliances and for energy-efficient retrofits.
Consumer Tax Credits to Make Homes Energy Efficient: 10 years of consumer tax credits to make homes more energy efficient and run-on clean energy, making heat pumps, rooftop solar, electric heating, ventilation, air conditioning (HVAC), and water heaters more affordable.
Consumer Tax Credits to Buy Used or New Clean Vehicles: Creates new tax credits for clean vehicles – up to $4,000 for Americans who purchase a used-electric vehicle and extends the current $7,500 tax credit for new vehicles through 2023.
Investing in a Clean Economy
The investments in this law will help reduce emissions in various sectors of our economy and invest in new technologies to advance our transportation systems.
Investing in Clean Commercial Transportation: Tax credits and grants for clean fuels and clean commercial vehicles to reduce emissions from all parts of the transportation sector.
Reducing emissions from Industrial Manufacturing: Provides grants and tax credits to reduce emissions from industrial manufacturing processes, including almost $6 billion for a new Advanced Industrial Facilities Deployment Program to reduce emissions from the largest industrial emitters like chemical, steel, and cement plants.
Investing in Clean Heavy-Duty Vehicles: $1 billion for clean heavy-duty vehicles nationwide, like school and transit buses and garbage trucks.
Procurement of American-Made Clean Technologies: $3 billion for the purchase of clean, zero-emission vehicles at the U.S. Postal service.
Reducing Air Pollution at Ports: $2.25 billion for clean, sustainable port infrastructure to help reduce emissions, improve air quality for nearby communities, and install new technologies at our ports.
Methane Emissions Reduction Program: $1.5 billion to implement a methane emissions reduction program to install monitoring and emissions reduction technology, including incentives to reduce methane emissions from conventional oil wells.
Investing in Agriculture and Water
These investments will affirm the central role of agricultural producers and forest landowners in our climate solutions by investing in climate-smart agriculture, forest restoration, and land conservation. The law makes critical investments in drought resiliency to mitigate the ongoing impacts of the drought in the West.
Addressing the Drought Crisis
Investing in Drought Resiliency: $4 billion in drought resiliency funding to mitigate the impact of drought in the West, compensate water users for voluntary water use reductions, and fund multi-benefit projects like canal lining, which would prioritize drought-prone areas such as the San Joaquin Valley.
Funding Critical Water Projects: $25 million for solar-over-canals pilot projects to generate renewable power and conserve water.
Supporting Farmers and Ranchers
Addressing Natural Resources Concerns: $8.45 billion for theEnvironmental Quality Incentives Program (EQIP), which would benefit San Joaquin Valley farmers by providing financial and technical assistance to address natural resource concerns like soil conservation, air quality, fire recovery, and on-farm energy infrastructure.
Climate-Smart Agricultural Practices: Builds on the efforts of the 2018 farm bill by providing $4.95 billion for theRegional Conservation Partnership Program (RCPP), which would help Valley farmers meet the challenges of increased groundwater management, wildlife habitat conservation, and other natural resources concerns affecting our Valley.
Investing in Forest Restoration: $1.8 billion for the Hazardous Fuels Treatment on National Forest Service Land to support forest restoration efforts.
Protecting our National Parks: $500 million for conservation and ecosystem restoration on National Park Service and Bureau of Land Management lands.
Reducing our Deficit
The historic Inflation Reduction Act honors our promise to the American people – and is fully paid for by making the biggest corporations and ultra-wealthy pay their fair share:
Establishes a 15 percent corporate minimum tax rate - which applies only to the 150 corporations earning over $1 billion in profits that pay less than 15% in taxes.
Creates a 1 percent excise tax on stock buybacks to encourage companies to invest in production and workers instead of shareholder profits.
Lowers the deficit and reduces inflation: Makes a historic down payment on deficit reduction of approximately $300 billion to fight inflation.
NO new taxes on families making $400,000 or less and NO new taxes on small businesses: Not one middle-class person filling out their taxes will find that they are facing higher taxes or higher tax rates.
Meanwhile, Republicans are desperately spreading falsehoods in order to protect wealthy tax cheats and the obscene profits of Big Pharma – with false claims that have earned repeated fact-checks and three Pinocchio lies about the Inflation Reduction Act's investments in ensuring the IRS has the resources to take on those wealthiest few using well-heeled armies of lawyers and accountants to break the law and cheat on their taxes.
Unlike honest, hard-working middle-class families paying their fair share, the top 1% is estimated to not pay $160 billion in owed taxes each year.
Treasury Secretary Yellen has specifically directed the IRS Commissioner not to increase the audit rate for households making under $400,000 a year.
The IRS Commissioner himself, a Republican appointed by President Trump, has said, "These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans. As we have been planning, our investment of these enforcement resources is designed around Treasury's directive that audit rates will not rise relative to recent years for households making under $400,000."
A bipartisan group of former IRS commissioners verified that "for ordinary Americans who already fulfill their tax obligations, audit scrutiny will decline because the IRS will be better at selecting returns for examination." […] This bill is about getting to the heart of the problem and pursuing high-end taxpayers and corporations who today illegally evade their tax obligations."