And billions left over to pay down federal deficits. Overall, the Democrats’ “Low Inflation Act” may not do much to immediately curb inflationary price increases. But the package headed for final passage in Congress and the White House for President Joe Biden’s signature will touch countless American lives with long-running bipartisan proposals. Not as strong as Biden’s initial ideas for rebuilding America’s public infrastructure and family support systems, the compromise on health care, climate change and deficit reduction strategies is also a surprising election-year twist, a smaller but not a substantial product returning to political life after collapsing last year. Only Democrats support the package, with all Republicans expected to vote against it. Republicans deride the 730-page bill as big government overreach and are particularly critical of his $80 billion investment in the Internal Revenue Service to hire new employees and crack down on tax fraud. Voters will be left to decide in the November elections, when control of Congress will be decided. Here’s what’s included in the estimated $740 billion package — made up of $440 billion in new spending and $300 billion in deficit relief — set to pass the House on Friday. LOWER PRESCRIPTION DRUG COST Kicking off a long-sought goal, the bill would allow the Medicare program to negotiate prescription prices for certain drugs with pharmaceutical companies, saving the federal government about $288 billion over the 10-year budget. The result is expected to lower seniors’ costs for drugs, including a $2,000 out-of-pocket cap for seniors who buy prescriptions from pharmacies. The revenue raised will also be used to provide free vaccinations for the elderly, who are now among the few without guaranteed free access, according to a summary document. Seniors will also have insulin prices capped at $35 a month. HELP PAYING FOR HEALTH INSURANCE The bill would expand subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own. Under previous pandemic relief, additional aid was due to expire this year. But the bill would allow aid to continue for three more years, lowering premiums for about 13 million people who buy their own health care policies through the Affordable Care Act. USA’S GREATEST INVESTMENT “I WAS” IN CLIMATE CHANGE The bill would pump nearly $375 billion over the decade into strategies to combat climate change that Democrats believe could put the country on a path to cut greenhouse gas emissions by 40 percent by 2030 and “would represent the largest climate investment in US history. far away.” For consumers, that means tax credits for buying electric vehicles — $4,000 for used vehicles and up to $7,500 for new ones, eligible for households with incomes of $300,000 or less for couples or single people with incomes of $150,000 or less. Not all electric vehicles will be fully eligible for the tax credits, thanks to requirements for parts to be manufactured and assembled in the US. Excludes more expensive cars costing more than $55,000 and SUVs and trucks priced more than $80,000. There are also tax breaks to help consumers go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar power. For businesses, the bill has $60 billion in clean energy production tax credits and $30 billion in wind and solar production tax credits, which are seen as ways to boost and support industries that can help reduce the nation’s dependence from fossil fuels. The bill also provides tax breaks for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to promote. The bill would impose a new end to excessive methane emissions from oil and gas drilling, while giving fossil fuel companies access to more leases on federal lands and waters. A late addition pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada and Colorado would set aside $4 billion to fight a major drought in the West, including conservation efforts in the Colorado River Basin , which nearly 40 million Americans rely on for drinking water. HOW TO PAY FOR ALL THIS? One of the biggest revenue-raising drivers in the bill is the new 15% minimum tax on companies that earn more than $1 billion in annual profits. It’s a way to pressure some 200 US companies that avoid paying the standard 21% corporate tax, including some that end up paying no taxes at all. The new minimum corporate tax will kick in after the 2022 tax year and raise more than $258 billion over the decade. A new 1% excise tax on stock buybacks would also be imposed, raising about $74 billion over the decade. Savings from Medicare negotiations with drug companies are expected to generate $288 billion over 10 years, according to the nonpartisan Congressional Budget Office. The bill sticks to Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year. However, the money is also raised by helping the IRS crack down on tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is expected to raise $203 billion in new revenue — a net gain of $124 billion over the decade. ADDITIONAL MONEY TO PAY DEFICIENTS With about $740 billion in new revenue and about $440 billion in new investments, the bill promises to make up about $300 billion in deficit reduction. Federal deficits have ballooned during the COVID-19 pandemic, when federal spending soared and tax revenues fell as the nation’s economy scrambled through shutdowns, office closures and other sweeping changes. The nation has seen deficits rise and fall in recent years. But the overall federal budget is on an unsustainable path, according to the Congressional Budget Office, which recently released a new report on long-term projections. WHAT WAS LEFT BEHIND? The package, which comes nowhere close to the sweeping Build Back Better program that Biden once envisioned, remains a sizable undertaking and, along with the 2017 GOP’s COVID-19 relief and tax cuts, is among the most important bills in Congress here and years. While Congress passed and Biden signed into law a bipartisan $1 trillion infrastructure bill for highways, broadband and other investments that were part of the White House’s original vision, the Democrats’ other big priorities have slipped away. For now, gone are plans for free pre-kindergarten and community college, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other basic needs. The enhanced child care credit that provided $300 a month during the pandemic is also being allowed to expire.
Associated Press writer Matthew Daly contributed to this report.
