Robert SchroederVictor Reklaitis
Democrats’ Inflation Reduction Act passed the House of Representatives in a 220-207 vote on Friday after clearing the Senate last weekend, and with it, some big changes could be coming to key sectors of the U.S. economy.
The measure, though a slimmed-down version of President Joe Biden’s Build Back Better proposal, would pump billions of dollars into climate and healthcare programs, while levying new taxes on big companies and stock /zigman2/quotes/210599714/realtime SPX +0.11% buybacks to pay for it all.
Below is a look at some of the key provisions of the bill, which passed the Senate in a 51-50 vote on Sunday , as Vice President Kamala Harris broke a tie. No Republicans in the Senate or House voted for it, as the GOP argued the measure wouldn’t live up to its name as an inflation-fighting measure.
Related: Inflation Reduction Act wouldn’t lower prices by all that much, analysts say
And see: Will the Inflation Reduction Act actually reduce inflation?
The legislation is expected to get signed into law quickly by Biden.
CLIMATE
The bill includes $369 billion for climate and energy provisions and would accelerate the U.S.’s transition away from fossil fuels.
As MarketWatch reported, the bill’s energy and climate-focused /zigman2/quotes/205740995/composite ICLN -0.43% incentives are peppered with rebates and tax credits that will directly impact households. They address heat pumps, appliance efficiency, solar panels, electric vehicles /zigman2/quotes/203558040/lastsale TSLA +4.06% /zigman2/quotes/208911460/composite F +1.18% and more.
Sen. Joe Manchin, a key West Virginia Democrat, also said he’d secured a side agreement to advance an energy-permitting reform package before the end of September — which could make it easier to build pipelines.
Investors earlier this week saw an immediate impact of the Senate’s advancing the bill, as shares of solar /zigman2/quotes/209356097/composite FSLR -0.17% , EV and fuel-cell /zigman2/quotes/203763461/composite FCEL +0.87% companies all rallied Monday.
See: Fuel cell, EV and solar stocks rally as climate bill makes ‘alternative’ energy more ‘in the money’
HEALTHCARE
Medicare would be able to negotiate the cost of some prescription drugs with pharmaceutical companies /zigman2/quotes/200345932/composite PJP -0.08% under the deal — a provision that’s been blasted by the industry, which says the measure would throttle innovation .
Retirement: Thanks to the Inflation Reduction Act, Medicare is on track to negotiate drug prices — what it means for you
The bill also caps out-of-pocket drug costs for Americans on Medicare at $2,000 a year, beginning in 2025.
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