Biden signs Inflation Reduction Act, bringing historic climate crisis investment
President Joe Biden hands the pen he used to sign the Democrats' landmark climate change and health care bill to Sen. Joe Manchin, D-W.Va., as Senate Majority Leader Chuck Schumer of N.Y., watches in the State Dining Room of the White House in Washington, Aug. 16, 2022. | Susan Walsh / AP

The most significant investment in addressing the climate crisis in U.S. history was signed into law by President Joe Biden on Aug. 16 before a jubilant White House gathering. The investments in climate and green energy will help put the country within striking distance of reaching goals to reduce global warming carbon emissions by 2030.

While celebrating the achievement, Biden pointedly noted the Inflation Reduction Act (IRA) passed without a single Republican vote. GOP elected officials ignored the historic heatwave, floods, and extreme weather events engulfing much of the world.

“The American people won, and the special interests lost,” said Biden. “We are in a season of substance. This administration began amid a dark time in America—‘a once-in-a-century pandemic’—devastating joblessness, clear and present threats to democracy and the rule of law, doubts about America’s future itself.”

The IRA will reduce U.S. greenhouse gas emissions by 40% by 2030, still short of Biden’s goal. According to climate scientists, the world must reduce carbon emissions by 50% by 2030 and 100% by 2050 to avoid surpassing 1.5 degrees Celsius, which would trigger far more catastrophic environmental changes.

The historic law results from decades of movement building and battles to pass transformative climate legislation against entrenched opposition from the fossil fuel industry. Biden and Democrats settled for a far less ambitious plan because they needed the vote of Sen. Joe Manchin, D-W.Va. Manchin was central to crafting the compromise legislation and stood behind Biden at the signing.

The IRA is “filled with all the gifts to Big Oil that Joe Manchin could cram in. But it’s what we should have done 30 years ago: started moving aggressively towards clean energy,” said environmentalist Bill McKibbon. “And so now it’s game on.”

Biden ticked off significant legislation Democrats have managed to pass with the narrowest of majorities requiring the tie-breaking vote of Vice President Kamala Harris in the Senate against total GOP obstruction. The IRA needed a simple majority to pass through the budget reconciliation process.

Democrats have also passed the American Rescue Plan, the Jobs and Infrastructure Act, CHIPs legislation to spur domestic high-tech manufacturing, healthcare aid to veterans exposed to toxins, and gun safety legislation. These accomplishments in the face of Republican opposition will make a strong contrast for voters in the 2022 elections.

The IRA will allow Medicare to negotiate bulk drug prices for the first time in history, starting in 2026. “I got here as a 29-year-old kid,” said Biden. “We were promising to make sure that Medicare would have the power to negotiate lower drug prices back then—back then—prescription drug prices. But guess what? We’re giving Medicare the power to negotiate those prices now, on some drugs.”

The new law caps prescription drug costs at $2,000 a year and insulin payments at $35 a month for Medicare recipients. Republican Senators stripped limiting insulin costs generally from the bill, but the victory opened the door to winning it later.

The IRA also funds the Affordable Care Act (Obamacare) through 2024, locking in lower insurance premiums for about 13 million people and expanding coverage to another 3 million.

The law establishes a 15% minimum tax on corporations with $1 billion or more in profits and, for the first time, imposes a new 1% tax on stock buyouts, a measure corporations bitterly opposed.

The IRA invests $369 billion in addressing the climate crisis. It funds consumer and business tax credits to accelerate the transition toward clean energy technologies, reduction in methane gas emissions, and investments in agriculture, rural economic development, forest restoration, and community resiliency projects against the impact of climate change.

It establishes environmental, labor, and equity standards in public investment. It directs about $60 billion in funding to historically discriminated and vulnerable frontline communities suffering the worst climate change consequences.

One such mechanism is a Greenhouse Gas Reduction Fund to make community renewable energy investments. The climate bank would lend $28 billion for low-interest loans across the country.

The bill contains tax credits for consumers to purchase new and used electric vehicles and partially funds the conversion of the USPS truck fleet to electric vehicles. It provides corporate tax credits to produce solar and offshore wind farms, geothermal, batteries, and green technology production facilities.

The bill makes it easier for working-class households to winterize their homes and buy energy-efficient home appliances like electric heat pumps and induction stoves. It will enable 7.5 million families to install rooftop solar, providing additional energy savings.

Studies show the more renewable energy, electric vehicles, and other products manufactured, the cheaper they become, which is not the case with fossil fuel energy production.

The IRA contains painful compromises to gain Manchin’s vote. The bill mandates on- and offshore drilling lease sales, but which are more restricted and carry higher royalty costs. Environmental activists vowed to continue fighting the new leasing. Ultimately, plummeting production costs of renewables will make oil drilling unnecessary.

Besides, the total impact of the new leasing on the climate could be minimal, according to one study. “For every ton of emissions increases generated by [the bill’s] oil and gas provisions, at least 24 tons of emissions are avoided by the other provisions,” concludes Energy Innovation.

Democrats also promised a vote on reforms to the federal energy permitting process by the end of the fiscal year. Environmentalists vowed to fight any changes that would promote fossil fuels.

Environmental organizations hailed the law’s enactment but noted it’s only the first step in a more protracted fight to reach 100% carbon emission reductions by 2050. It will require more significant political mobilization on the state level to ensure full implementation. Many are also urging the Biden administration to declare a National Climate Emergency to unlock powers to speed to transition to renewables.

“Today, we celebrate the power of movements and this historic moment for climate action,” tweeted the Sunrise Movement. “But as families across the U.S. suffer from climate disasters, @POTUS must now declare a climate emergency, and use every tool he has to stop the climate crisis.”

“This bill isn’t perfect, and we will continue to fight against any efforts to weaken our environmental protections or greenlight additional fossil fuel infrastructure,” tweeted the Sierra Club.

“Passage of the IRA, despite its drawbacks and limitations, is the most significant climate legislation ever passed into law,” said the Labor Network on Sustainability. “It could represent a huge opportunity for the labor-climate movement to shape the significant federal subsidies for non-fossil energy development, manufacturing, and consumers. It will create an estimated 1 to 1.5 million jobs.

“The Inflation Reduction Act can provide the basis for an unprecedented people’s mobilization for climate, labor, and justice. That is what it will take to provide a sustainable future for our environment and a fairer economy,” the group said.

Passing the IRA, along with the other legislative achievements, may help Democrats defend and expand their majorities in November. If voters elect a Democratic, pro-climate, and anti-filibuster majority, then passing even more comprehensive climate legislation may be possible to get the country to net zero emissions in time.


CONTRIBUTOR

John Bachtell
John Bachtell

John Bachtell is president of Long View Publishing Co., the publisher of People's World. He served as national chair of the Communist Party USA from 2014 to 2019. He is active in electoral, labor, environmental, and social justice struggles. He grew up in Ohio, Pittsburgh, and Albuquerque and attended Antioch College. He currently lives in Chicago where he is an avid swimmer, cyclist, runner, and dabbler in guitar and occasional singer in a community chorus.

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