Disclaimer: This information is accurate and true to the best of my knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
"After a year of infighting, Senate Democrats are now working to pass legislation that could reduce the cost of prescription drugs, health care premiums and energy for millions of Americans. The $369 billion package, known as the Inflation Reduction Act, is essentially a pared-down version of President Joe Biden’s massive Build Back Better social-spending agenda. Except this iteration has a notable perk: the approval of Democratic holdout Sen. Joe Manchin III of West Virginia. That, plus the signoff of Senate Majority Leader Chuck Schumer, indicates the proposal could become law soon." —Adam Hardy
Although similar to President Biden's Build Back Better Plan, the proposed legislation does not include certain benefits, such as extended child tax credit payments, universal preschool, and more affordable housing.
"The proposed legislation does not include funding for many staples of Build Back Better, such as extended child tax credit payments, universal preschool or more affordable housing." —Adam Hardy
Nonetheless, it will likely have a significant impact on the U.S. economy.
"...the Inflation Reduction Act could have a broad economic impact on the U.S., given that it's aimed at addressing the climate crisis, bringing down drug prices, raising taxes for high-income earners and billion-dollar corporations, and extending health care subsidies — all while reducing the federal deficit." —Adam Hardy
Although the name is misleading, many financial experts believe that this act will probably increase inflation until 2024 instead of lowering it, but it will reduce the federal deficit.
"The analysts at University of Pennsylvania did find that the legislation would reduce the federal deficit by approximately $250 billion by 2031. A separate estimate from Senate Democrats said the deficit reduction would be more than $300 billion." —Adam Hardy
HOW WILL THE INFLATION REDUCTION ACT AFFECT YOU?
The Inflation Reduction Act would likely save you money through:
- Extended healthcare subsidies
- Tax credits for electric vehicles
- Incentives for energy-efficient home upgrades
- A prescription drug cost cap for Medicare
Currently, the Inflation Reduction Act is not law, but many believe that it will be soon.
"With Manchin's support, many Democrats and analysts are optimistic that some version of the bill will ultimately have the votes it needs to clear the House and Senate. But, as always, logistical hurdles complicate the way forward. Democrats hold only a razor-thin majority in the Senate, and that's counting Vice President Kamala Harris’ tie-breaking vote. Through a process called reconciliation, Senate Democrats can avoid the filibuster for certain tax and budgetary bills, meaning the IRA could pass with only the support of a simple majority." —Adam Hardy
That being said, there are no guarantees and a further complication is the upcoming Senate's recess, beginning on August 8, 2022.