Narrow house

United States: the US House of Representatives votes on the climate and social package

The law provides for the largest investment ever made by the United States in climate protection – and separates Republicans and Democrats along party lines. President Biden could misuse the success.

WASHINGTON — After a long dispute over multi-billion investments in climate protection and social affairs, the U.S. House of Representatives is voting on a comprehensive legislative package. “On Friday (today), House Democrats will pass the historic anti-inflation bill and bring it to the President,” House Speaker Nancy Pelosi wrote to her fellow Democrats. The Senate approved the bill on Sunday with a slim majority of Democrats in that chamber. All Republicans voted against.

US President Joe Biden has already announced that he will sign the law. He spoke of the largest investment ever made by the United States to fight climate change. Biden’s original plans for climate protection and social reform were among the major projects of his tenure. The current package is a compromise due to disagreements within his Democratic party. It contains only a fraction of what Biden originally wanted to pursue.

However, the fact remains that the vote is a remarkable success for the president at all – until recently, it was hardly expected. Biden has long struggled with poor approval ratings. According to data from the FiveThirtyEight site, which brings together various surveys, only 40% are satisfied with their work, with no more than 55%.

FiveThirtyEight’s simulations calculate a high probability that Republicans will win a majority in the House of Representatives in November’s congressional elections. Biden will then have even more difficulty with the legislative projects.

The so-called anti-inflation bill that must now be voted on is much broader than its name suggests. It includes, among others, the following aspects:

climate protection

Around 370 billion dollars (around 359 billion euros) are to be invested in the sector over the next ten years. It aims to promote the manufacture of solar cells and wind turbines. Financial incentives are also planned for the construction of electric car factories. Energy research must be encouraged. These measures are expected to reduce CO2 emissions in the United States by approximately 40% by 2030.

cheap drugs

For the first time, public health insurance for the elderly or disabled (Medicare) should be allowed to negotiate the prices of certain expensive drugs directly with pharmaceutical companies. Democrats expect savings of about $290 billion over ten years. By 2025, patient co-payment for the drug will be capped at $2,000 per year. In addition, health insurance premiums are expected to drop for millions of Americans.

to manage

The legislative package aims to close tax loopholes. Companies whose profits exceed $1 billion per year must pay at least 15% in future taxes. This minimum tax is expected to pay the public treasury about $313 billion over the next ten years. The IRS is expected to receive an additional $80 billion over the same period. This should enable the IRS to collect an additional $124 billion in taxes from wealthy and highly profitable corporations. According to the US government, households with family incomes below $400,000 per year should not be affected.

loss reduction

The US government estimates that the legislative package could reduce the state deficit by more than $300 billion. This should also lower inflation, which was 8.5% in July.