President Biden Signs Inflation Reduction Act into Law



 

Legislation will Lower Drug Prices for Older Ohioans, Reduce Health Care Costs, Grow Ohio’s Renewable Energy Industries, Hold Wall Street Accountable

WASHINGTON, D.C. – August 16, 2022 – Today, President Biden signed into law the Inflation Reduction Act of 2022, a legislative package to fight inflation, lower prescription costs for seniors, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030. The legislation also takes historic steps to force Wall Street and corporations to pay their fair share – it makes a historic reduction to the deficit, and will not raise taxes on middle class Ohioans. U.S. Senator Sherrod Brown (D-OH) voted to pass the Inflation Reduction Act out of the Senate last week. This win comes on the heels of President Biden signing into law the CHIPS Act and the PACT Act, two pieces of legislation Brown fought to become law. The Inflation Reduction Act is now the law of the land.

“This is an historic step to fight inflation, lower costs, and create jobs that corporations can’t ship overseas. For the first time in years, we are standing up to three of the most powerful special interests in Washington – we’re taking on Big Pharma to lower seniors’ drug prices, we’re taking on Big Oil to lower energy prices, create Ohio jobs and grow new industries, and we’re taking on Wall Street to rein in stock buybacks that reward CEOs at the expense of workers,” said Brown.

Specifically, the Inflation Reduction Act will:

Lower Drug Prices & Health Care Premiums:

The Inflation Reduction Act directs, for the first time, the Secretary of Health and Human Services (HHS) to negotiate directly to lower the cost of prescription drugs for Medicare beneficiaries to ensure older Americans get the best possible deal on high-cost drugs. For years, Senator Brown has led efforts to allow Medicare to negotiate directly with pharmaceutical companies and to lower drug prices for all Americans. It also includes Brown’s Helping Adults Protect Immunity Act (HAPI) Act, which creates parity in adult vaccine coverage between states that have expanded Medicaid coverage and states that have not done so. It will also:

  • Require the Secretary to negotiate the cost of 10 drugs in 2026, shifting up to 20 drugs over time. There are limitations to those drugs that the Secretary can/must negotiate.
  • Reduce Seniors’ Out-of-Pocket Drug Costs by instituting a $2,000 cap on out of pocket prescription drug costs for Medicare beneficiaries, effective in 2025. Currently, there is no cap on out-of-pocket spending for drug costs in Medicare. This provision also allows seniors to break out the cap by month to spread costs throughout the year instead of facing them all up front at the start of the year.
  • Establish a new Inflation Rebate that requires drug companies that increase the price of their drugs beyond the pace of inflation to pay a rebate to Medicare for Part B drugs (beginning in October 2022) and Part D drugs (beginning April 2023). These provisions should help reduce year-after-year unjustified price increases and limit the astronomical growth in prices for drugs that have been on the market for years.
  • Lower Health Care Costs for Ohioans by extending the enhanced premium subsidies for those who access their health care through the Affordable Care Act for three years, through 2025.These enhanced credits helped 7 million more people qualify for no-cost health insurance, increasing coverage in Ohio by 29 percent. As a result of these enhanced subsidies, more than 259,000 Ohioans saw their health insurance premiums reduced – decreasing consumer costs and saving an average of $67 per month per person in premiums. Extending these enhanced subsidies will ensure no family will be forced to pay more than 8.5 percent of their income for ACA coverage, regardless of income.
  • Establish a $35 Monthly Cap on Insulin Costs for Older Ohioans. The legislation includes a monthly $35 cap on out-of-pocket insulin costs for all Ohioans on Medicare who rely on insulin to stay healthy.

Ensure Wall Street and Corporations Pay Their Fair Share:

  • For the first time, imposes a 1% excise tax on corporate stock buybacks, based on Brown’s Stock Buyback Accountability Act. The 2017 tax law delivered a massive tax windfall to wealthy corporations. A record number of stock buybacks followed, which enriched shareholders and CEOs instead of creating new jobs or raising workers’ wages. To curb this trend, the bill requires corporations to pay a tax on the total amount of stock repurchase.
  • Require the largest corporations to pay a minimum tax. This minimum tax applies to companies with over $1 billion in profits – meaning only the approximately 200 largest corporations will be affected. These companies use tax loopholes to avoid paying the statutory 21% rate and actually pay well below 15%.

Lower costs & Create Jobs in Ohio Industries of the Future:

The Inflation Reduction Act includes Brown’s priorities that will help lower costs for families in Ohio and create jobs in growing industries that cannot be sent overseas, including:

  • Linear Generator Parity Act: Brown’s bill will spur investment in an innovative new energy technology and support jobs in Ohio. The provision will benefit companies like Sunpower Inc., located in Athens, which has developed a promising electric power generation technology – the high-efficiency linear generator. It will also provide parity to these companies by allowing them to access an investment tax credit that will help them scale their product to market. 
  • Agriculture Environmental Stewardship Act: part of Brown’s bill will encourage investment in biodigester and nutrient recovery systems, while establishing a market for farmers who already have a surplus of waste materials that can be used for biogas production. It will help expand the market for renewable biogas by providing a 30 percent investment tax credit to help offset the upfront costs associated with building biodigester systems.
  • Sustainable Skies Act: Brown’s bill to fight carbon emissions and promote the transition to sustainable aviation fuel. Today, air travel accounts for as much as 2.5% of global carbon emissions. The Sustainable Skies Act aims to cut aviation’s carbon emissions in half. This bill was supported by the Pilots Association, Airlines for America, the Environmental Defense Fund, and others.
  • Permanent funding for Black Lung Disability Trust Fund: The Black Lung Disability Trust Fund is funded by an excise tax on coal. For the past few years, the level of the excise tax has been increased for one year at a time, sunsetting each year to a lower rate that puts the funding for the Trust Fund in jeopardy. The bill makes the increased funding for the Trust Fund permanent.
  • $500 million for the Defense Production Act to strengthen U.S. production of critical materials and reduce our reliance on vulnerable supply chains.

The Inflation Reduction Act includes Brown’s priorities to improve domestic clean energy manufacturing and housing, and to support consumers. These provisions were included with prevailing wage requirements for construction facilities and Buy America/domestic content requirements for the steel, iron, and manufactured products that go into the construction. The bill also includes a special additional 10% tax incentive for the construction of these clean energy manufacturing facilities in historic energy communities, defined as communities with significant employment related to coal, oil, and natural gas. The provisions include:

  • $30 billion investment in production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing.
  • $10 billion investment tax credit to build clean technology manufacturing facilities, like facilities that make electric vehicles, wind turbines and solar panels.
  • $2 billion in grants to retool existing auto manufacturing facilities to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.
  • $4,000 consumer tax credit for lower/middle income individuals to buy used clean vehicles, and up to $7,500 tax credit to buy new clean vehicles.
  • Made-in-America requirement: The $7,500 tax credit for new clean vehicles requires that final assembly of the car be made in the United States.
  • 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.
  • Over $9 billion for Federal procurement of American-made clean technologies to create a stable market for clean products, including $3 billion for the U.S. Postal Service to purchase zero-emission vehicles. Brown has specifically called for the U.S. Postal Service to purchase 100% zero-emission vehicles made in the United States. 
  • $1 billion to improve the quality, safety, and sustainability of affordable housing for seniors, families, and people with disabilities through energy- and water-efficient and resilient retrofits.

Support Ohio Agriculture, Urban and Rural Development, Forestry:

  • 1890s Institution Funding: $250 million for research, extension and education activities, and scholarships at 1890s Land-Grant Institutions and other minority serving institutions.
  • Urban Tree Planting Funding$1.5 billion to build more climate resilient communities through historic investments in urban forestry, with a priority for projects that benefit underserved populations and areas, and cost-share waiver authority. The inclusion of this funding is modeled after Brown’s Neighborhood Trees Act.
  • Small Farm Debt Relief: $5 billion to provide debt relief for struggling small farms including those that have experienced historic discrimination.
  • Agriculture Conservation Program Funding: $18 billion for voluntary agriculture conservation programs, which will give farmers and rural communities a seat at the table when it comes to fighting climate change. 
  • Rural Energy For America: $1.3 billion for grants to farmers and rural businesses to install renewable energy production systems and energy efficiency upgrades.