By David Morgan, Moira Warburton and Rose Horowitch WASHINGTON (Reuters) -The U.S. House of Representatives will vote Friday on a $430 billion bill to fight climate change and lower prescription drug prices, in what Democrats view as a major political win for President Joe Biden ahead of November’s midterm elections. Democrats say the legislation will […]
U.S. House set to give Biden huge win with $430 billion bill on climate, drug prices
By David Morgan, Moira Warburton and Rose Horowitch
WASHINGTON (Reuters) -The U.S. House of Representatives will vote Friday on a $430 billion bill to fight climate change and lower prescription drug prices, in what Democrats view as a major political win for President Joe Biden ahead of November’s midterm elections.
Democrats say the legislation will help reduce the federal deficit, cut domestic greenhouse gas emissions, allow Medicare to negotiate lower drug prices for the elderly and ensure corporations and the wealthy pay the taxes they owe.
Titled the “Inflation Reduction Act,” the measure passed the Senate along party lines on Sunday after a marathon, 27-hour session. House approval would send the bill on to Biden to sign into law. A vote on passage was expected on Friday afternoon.
“If you are sitting at your kitchen table, wondering how you’re going to pay the bills – your healthcare bills, your prescription drug bills – this bill is for you,” House Speaker Nancy Pelosi, the chamber’s top Democrat, told reporters.
Republicans oppose the legislation, warning it will kill jobs by raising corporate tax bills, further fuel inflation with government spending and inhibit the development of new drugs.
“It will only make the suffering Americans face today that much worse,” Representative Jason Smith, the top Republican on the House Budget Committee, said on the House floor.
The bill has been more than 18 months in the making. It represents a final version of Biden’s original sweeping Build Back Better plan, which had to be whittled down in the face of opposition from Republicans and key legislators from his own party.
Business groups have had a mixed reaction to the legislation, which offers the prospect of higher tax bills for some companies while at the same time giving protections to the fossil fuel industry.
The bill’s main revenue source is a 15% corporate minimum tax aimed at stopping large, profitable companies from gaming the Internal Revenue Service code to slash their tax bills to zero.
Investors looking to pour cash into clean energy products can expect at least a decade of federal subsidies through long-term tax credits for wind and solar and new credits for energy storage, biogas and hydrogen. Developers who use U.S.-made equipment or build in poorer areas will have additional support.
But the bill does not leave the U.S. fossil fuels industry out in the cold. Some provisions allow the federal government to authorize new wind and solar energy developments on federal land only when it is also auctioning rights to drill for oil and natural gas.
The fossil fuel protections disappointed progressives but posed no barrier to Democratic support.
“We don’t support the expansion of fossil fuel leasing,” said Representative Pramila Jayapal, who heads the Congressional Progressive Caucus. “But critically … independent analyses show that their impact will be far outweighed by the bill’s carbon pollution cuts.”
A $7,500 tax credit to encourage U.S. consumers to buy electric vehicles could not be used for most EV models on the market, according to major automakers, who warn that the legislation will put achieving U.S. EV adoption targets for 2030 in jeopardy.
To be eligible for the credit, vehicles must be assembled in North America, which would make some current EVs ineligible as soon as the bill takes effect.
Democrats, who have been weighed down for months by inflation and Biden’s anemic job approval numbers, hope the legislation will help them at the polls in November, when voters decide the balance of power in Congress ahead of the 2024 presidential election.
Biden himself plans to travel across the country to tout the bill along with a series of other legislative victories as a win for voters and a defeat for special interests.
Republicans are favored to win a majority in the House in November and could also take control of the Senate.
About half of Americans – some 49% – support the climate and drug pricing legislation, including 69% of Democrats and 34% of Republicans, according to a Reuters/Ipsos poll conducted on Aug. 3 and 4. The most popular element of the bill is giving Medicare the power to negotiate drug prices, which 71% of respondents support, including 68% of Republicans.
(Reporting by David Morgan; Additional reporting by Moira Warburton and Rose Horowitch; Editing by Ross Colvin, Alistair Bell and Daniel Wallis)