After months of wrangling, deal-making, and pork-trading, the Senate narrowly passed the sweeping Inflation Reduction Act last week.
Among the key environmental provisions in the bill are various financial incentives for Americans to modify their homes with clean-energy infrastructure, like solar panels and electric HVAC systems. It also earmarks tens of billions of dollars to “support energy reliability and cleaner energy production” and sets aside billions specifically to address environmental inequalities in both disadvantaged as well as rural communities.
Overall, it offers “historic investments in American clean energy manufacturing,” per a rundown of the bill provided by Senate Democrats.
It calls for up to $7,500 in tax credits for the purchase of a new electric vehicle, and $4,000 for a used EV.
The transportation sector is the worst polluters in the U.S., per the EPA, accounting for 27% of greenhouse gas emissions alone in 2020. Cutting down on car and truck emissions would be significant.
The bill also makes significant progress toward lowering health care costs, thanks to a $64 billion investment in expanding the Affordable Care Act.
Per the White House, the law will also result in 3 million more Americans having health insurance than would have otherwise.
This will happen via revenue-raising efforts, including a 15% minimum tax on corporate profits and a more than $100 billion investment in the IRS to boost tax enforcement.
Shai Akbas, the director of economic policy at the Bipartisan Policy Center, told NPR that cutting into the deficit should help with inflation by reducing how much money is circulating in the economy. Less cash waiting to be spent typically translates to less demand, which makes price hikes less likely.
Still, given the bulk of the bill is centered on climate spending and health care wins, some have called out the name as deceptive marketing. Several nonpartisan analyses have questioned whether the bill will really meaningfully affect inflation.
The IRA follows the passage of the bipartisan CHIPS Act, which allotted money to boost the U.S. semiconductor industry, and the bipartisan PACT Act, which expanded health care benefits for veterans exposed to toxic burn pits.