Senator Chuck Schumer following passage of the Inflation Reduction Act
Senator Chuck Schumer following passage of the Inflation Reduction Act

This after­noon, after pulling a “vote-a-rama” all nighter, the Unit­ed States Sen­ate resolved — with Vice Pres­i­dent Kamala Har­ris’ tiebreak­ing vote! — to pass the cli­mate and health focused Infla­tion Reduc­tion Act of 2022 nego­ti­at­ed by Sen­ate Major­i­ty Leader Chuck Schumer and Sen­a­tor Joe Manchin.

This is eas­i­ly the most ambi­tious cli­mate bill the Sen­ate has ever passed, so it’s a pret­ty big moment. But it does­n’t just take cli­mate action. It would also low­er drug costs for mil­lions of Amer­i­can fam­i­lies by allow­ing Medicare to final­ly — final­ly! — nego­ti­ate the cost of pre­scrip­tion drugs.

The leg­is­la­tion is a frac­tion of the size of Build Back Bet­ter, and includes give­aways to Joe Manchin and Kyrsten Sine­ma to win their votes. Nev­er­the­less, it puts us in a bet­ter posi­tion to tack­le the cli­mate cri­sis and cost of liv­ing increases.

President Biden’s comments

“Today, Sen­ate Democ­rats sided with Amer­i­can fam­i­lies over spe­cial inter­ests, vot­ing to low­er the cost of pre­scrip­tion drugs, health insur­ance, and every­day ener­gy costs and reduce the deficit, while mak­ing the wealth­i­est cor­po­ra­tions final­ly pay their fair share,” said Pres­i­dent Joe Biden in a spe­cial statement.

“I ran for Pres­i­dent promis­ing to make gov­ern­ment work for work­ing fam­i­lies again, and that is what this bill does — peri­od. This bill caps seniors’ out of pock­et spend­ing for pre­scrip­tion drugs at $2000 per year – no mat­ter what their drug bills would oth­er­wise be, seniors will not have to spend more than $2000.”

“In addi­tion, thir­teen mil­lion Amer­i­cans, cov­ered under the Afford­able Care Act, will see their health insur­ance pre­mi­ums reduced by $800. This bill tack­les infla­tion by low­er­ing the deficit and low­er­ing costs for reg­u­lar families.”

“It address­es the cli­mate cri­sis and strength­ens our ener­gy secu­ri­ty, cre­at­ing jobs man­u­fac­tur­ing solar pan­els, wind tur­bines, and elec­tric vehi­cles in Amer­i­ca with Amer­i­can work­ers. It low­ers fam­i­lies’ ener­gy costs by hun­dreds of dol­lars each year. Final­ly, it pays for all this by estab­lish­ing a min­i­mum cor­po­rate tax so that our rich­est cor­po­ra­tions start to pay their fair share. It does not raise tax­es on those mak­ing under $400,000 a year – not one cent.”

“I want to thank Leader Schumer and every mem­ber of the Sen­ate Demo­c­ra­t­ic cau­cus for sup­port­ing this bill. It required many compromises.”

“Doing impor­tant things almost always does. The House should pass this as soon as pos­si­ble and I look for­ward to sign­ing it into law.”

Governor Inslee’s comments

“Wash­ing­to­ni­ans will take deep sat­is­fac­tion know­ing our decades-long vision of a clean ener­gy econ­o­my cre­at­ing good, fam­i­ly wage jobs all across Amer­i­ca is com­ing clos­er to real­i­ty,” said Gov­er­nor Jay Inslee, who mon­i­tored the vote.

“These long-sought mea­sures, part of the sin­gle largest invest­ment to address cli­mate change in Amer­i­can his­to­ry, should right­ful­ly encour­age both our state and the fed­er­al gov­ern­ments to take fur­ther nec­es­sary steps.”

“We need more if we are to ful­ly meet Amer­i­ca’s com­mit­ments under the Paris Cli­mate Accords. I urge the admin­is­tra­tion to build on this break­through by tak­ing all exec­u­tive action avail­able to them. We must not miss this moment.”

“The Sen­ate has tak­en the essen­tial step, and Amer­i­cans are right­ful­ly opti­mistic. I thank Sen­a­tors Pat­ty Mur­ray and Maria Cantwell for their unflag­ging, hero­ic efforts to pass rec­on­cil­i­a­tion leg­is­la­tion through the Sen­ate that meets the scale of our cli­mate cri­sis, low­ers health care costs for Wash­ing­to­ni­ans, and fights infla­tion. They delivered.”

“The House of Rep­re­sen­ta­tives should pass the Infla­tion Reduc­tion Act this week so that Pres­i­dent Biden may sign it into law – a day all Amer­i­cans will remember.”

Senator Murray’s comments

“No one should have to wor­ry about whether they can afford the health care or med­i­cine they need. This bill will final­ly give Medicare pow­er to force drug com­pa­nies to the bar­gain­ing table and nego­ti­ate low­er drug prices for patients across the coun­try,” said Wash­ing­ton’s senior U.S. Sen­a­tor Pat­ty Murray.

“And for seniors who are often on fixed incomes: we are going to cap the price of insulin at just $35 per month, cap out-of-pock­et costs, and we are stop­ping big phar­ma from jack­ing up the cost of their drugs.”

“Life­sav­ing med­i­cine doesn’t do any good if peo­ple can’t afford it—and this leg­is­la­tion makes mean­ing­ful progress toward mak­ing sure peo­ple don’t have to emp­ty their sav­ings account just so they can fill their prescription.”

“This bill helps peo­ple get qual­i­ty, afford­able insur­ance too, by extend­ing the health care tax cred­its we passed in the Amer­i­can Res­cue Plan—that makes a dif­fer­ence right now for mil­lions of peo­ple,” Mur­ray added.

“More than 100,000 peo­ple found cov­er­age on Wash­ing­ton state’s exchange for no more than $100 a month because of these tax cred­its. These aren’t just words on paper and it’s not just about sav­ing patients’ mon­ey — this will save lives.”

“We are help­ing patients who are rationing their pre­scrip­tions to make ends meet, or who are afraid to see their doctors—not because they are scared of get­ting a diag­no­sis, but because they are scared of the price tag. And I am going to keep build­ing on this momen­tum with even more bold poli­cies to ensure health care is tru­ly a right, not a priv­i­lege, for every­one in our country.”

“I talk to young peo­ple in Seat­tle who are urgent­ly call­ing on Con­gress to take bold cli­mate action and fam­i­lies in Yaki­ma Coun­ty who are deeply con­cerned by a wild­fire sea­son that seems to get worse and worse every year — the cli­mate cri­sis is here and it’s time we take action,” con­tin­ued Sen­a­tor Mur­ray on the Infla­tion Reduc­tion Act’s cli­mate and ener­gy provisions.

“This his­toric leg­is­la­tion will be the largest-ever invest­ment in cli­mate action in our country’s his­to­ry. Wash­ing­ton state is unique­ly poised to take full advan­tage of fed­er­al clean ener­gy tax cred­its and grants that will deliv­er low­er ener­gy costs for con­sumers, mil­lions of good-pay­ing jobs, and pro­mote real ener­gy independence.”

“And final­ly — this leg­is­la­tion won’t just bring down fam­i­lies’ every day costs, it will bring down the deficit—by more than $300 bil­lion,” Mur­ray observed.

“Because every cent of this bill is paid for — and then some — by sim­ply ensur­ing giant cor­po­ra­tions pay their fair share in taxes.”

“There’s no rea­son a bil­lion dol­lar cor­po­ra­tion should pay less in tax­es than a fire­fight­er or a teacher in Wal­la Wal­la, Wash­ing­ton — just because the cur­rent sys­tem lets them skirt or even plain cheat on their tax­es. That’s not right. And Democ­rats won’t let it fly any longer and no work­ing or mid­dle-class fam­i­ly in Wash­ing­ton state will see their tax­es go up one penny.”

Senator Wyden’s comments

“This his­toric clean ener­gy pack­age has been a decade in the mak­ing,” said Ore­gon’s senior U.S. Sen­a­tor Ron Wyden in a statement.

“When clean ener­gy leg­is­la­tion failed in 2010, we regrouped to ensure suc­cess the next time Democ­rats had an oppor­tu­ni­ty. We turned to emis­sions-based, tech­nol­o­gy-neu­tral tax incen­tives, and spent near­ly a decade prepar­ing this bill.”

“My lodestar has been achiev­ing the great­est emis­sions and cost-sav­ings pos­si­ble with fifty votes. That’s why the Infla­tion Reduc­tion Act’s clean ener­gy tax pack­age is about nine­ty per­cent of the Clean Ener­gy for Amer­i­ca Act that the Sen­ate Finance Com­mit­tee approved in May 2021.”

“We built the sup­port need­ed over time.”

Wyden con­tin­ued: “This bill will reduce ener­gy costs, secure our ener­gy inde­pen­dence, and dras­ti­cal­ly cut car­bon emis­sions. For the first time, the tax code is going to reward emis­sions reduc­tions, and encour­age the devel­op­ment of new clean ener­gy tech­nolo­gies as soon as they come online.”

“No longer will Con­gress need to leg­is­late tech­nol­o­gy by tech­nol­o­gy, mak­ing it eas­i­er to inno­vate and bring new tech­nolo­gies to market.”

“Impor­tant­ly, this is per­ma­nent ener­gy pol­i­cy. Con­gress will no longer need to extend these incen­tives every few years, giv­ing com­pa­nies and states cer­tain­ty to plan clean ener­gy projects and cre­ate jobs.”

“This is among the most con­se­quen­tial bills of my ser­vice in the Senate.”

“For too long, Medicare has been forced to con­tend with Big Phar­ma with one hand tied behind its back – that ends when this bill is signed into law,” Wyden added. “Ever since I became the top Demo­c­rat on the Finance Com­mit­tee, I have been spot­light­ing how the drug pric­ing sys­tem is bro­ken top to bottom.”

“At last, the Sen­ate has begun to rede­fine the rela­tion­ship between Medicare and Big Phar­ma. That work began last Con­gress on a bipar­ti­san basis, and vir­tu­al­ly the entire­ty of the Finance Committee’s work two years ago is includ­ed in the Infla­tion Reduc­tion Act. Democ­rats have tak­en the crit­i­cal next step by lift­ing the curse that has pre­vent­ed Medicare from nego­ti­at­ing low­er prices.”

“Medicare nego­ti­a­tion is the cen­ter­piece of the Infla­tion Reduc­tion Act’s drug pric­ing reforms. No longer will drug com­pa­nies be able to string Medicare along for years or even decades while tax­pay­ers foot the bill.”

“This pol­i­cy tar­gets the most expen­sive, most used drugs that have had zero com­pe­ti­tion for years on end. It low­ers prices in a way that is fair and designed to pro­mote inno­va­tion, not sti­fle it. Those nego­ti­a­tions will begin next year.”

“It cre­ates a lim­it on Big Pharma’s abil­i­ty to price gouge with the Medicare infla­tion rebate, requir­ing drug com­pa­nies to pay a fee to Medicare if they raise their prices faster than inflation.”

“Crit­i­cal­ly, the bill will pro­tect seniors from high out-of-pock­et costs in less than a year and a half with a $2,000 out-of-pock­et cap on drug costs, which will spare more than a mil­lion seniors from finan­cial per­il. Tak­en togeth­er, these poli­cies rep­re­sent a seis­mic shift in how Medicare pays for med­i­cine, and it does so in a way that will great­ly low­er costs for seniors and taxpayers.”

Senator Merkley’s comments

“Today is a big day for Amer­i­ca,” said Sen­a­tor Jeff Merkley of Ore­gon, Wyden’s seat­mate. “For the first time, the U.S. Sen­ate has passed major leg­is­la­tion to remake our ener­gy sys­tem — and to do so while also low­er­ing health care costs and cre­at­ing good-pay­ing, fam­i­ly wage jobs, all paid for by ensur­ing bil­lion­aires and big cor­po­ra­tions pay their fair share in taxes.”

“We’re tak­ing on Big Phar­ma to low­er drug prices. This bill starts the process of nego­ti­at­ing pre­scrip­tion drug prices and caps out-of-pock­et costs for pre­scrip­tions at $2,000 a year for seniors on Medicare.”

“Addi­tion­al­ly, it helps mid­dle class fam­i­lies get afford­able insur­ance cov­er­age by extend­ing key tax cred­its and pre­vent­ing big cost increas­es that would have hit fam­i­lies this fall. This bill is a big win for afford­able health care, and we need to keep build­ing on it. Amer­i­can tax­pay­ers con­tribute more than the cit­i­zens of any oth­er nation in the world to research and devel­op­ment of drugs.”

“They deserve the best prices in the world, not the worst.”

“We’re going to tran­si­tion to clean ener­gy and cre­ate high-qual­i­ty union jobs while we do it. Year after year, I’ve seen my home state of Ore­gon and oth­er states across the West dec­i­mat­ed by mega wild­fires and record droughts.”

“In oth­er parts of the coun­try, we’ve seen super­storms, sea rise, and unprece­dent­ed flood­ing. Cli­mate chaos is here, and we have to act now to save lives and liveli­hoods from cat­a­stro­phe. This bill is the most sig­nif­i­cant piece of cli­mate leg­is­la­tion ever passed through the U.S. Sen­ate and final­ly puts us on a path to tran­si­tion to clean and renew­able energy.”

Evergreen Action’s reaction

“This is a his­toric moment for cli­mate action, and a turn­ing point in Amer­i­can cli­mate pol­i­cy,” said Ever­green Action’s Jamal Raad.

“Today, the Sen­ate passed the largest cli­mate invest­ment in his­to­ry — by far. This is the end of a decades-long road to pass a cli­mate bill, but it’s only the begin­ning of the road towards achiev­ing the green­house gas pol­lu­tion reduc­tions that sci­ence demands and build­ing a bet­ter future for us all.”

NPI’s position

The North­west Pro­gres­sive Insti­tute sup­ports the Infla­tion Reduc­tion Act of 2022. This land­mark bill will advance Amer­i­ca’s efforts to meet its moral oblig­a­tion to tack­le the cli­mate cri­sis and will final­ly allow Medicare to nego­ti­ate pre­scrip­tion drug costs, which will help mil­lions of Amer­i­cans in the years to come. Final­ly, this bill actu­al­ly makes our tax code fair­er for a change, increas­ing fund­ing for the Inter­nal Rev­enue Ser­vice and putting us on a path to greater fis­cal responsibility.

We look for­ward to House pas­sage and the White House sign­ing ceremony.

About the author

Andrew Villeneuve is the founder and executive director of the Northwest Progressive Institute, as well as the founder of NPI's sibling, the Northwest Progressive Foundation. He has worked to advance progressive causes for over two decades as a strategist, speaker, author, and organizer. Andrew is also a cybersecurity expert, a veteran facilitator, a delegate to the Washington State Democratic Central Committee, and a member of the Climate Reality Leadership Corps.

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