By Lisa Mascaro
AP Congress Correspondent
WASHINGTON (AP) — What began as a $4 trillion effort during President Joe Biden’s first months in office to rebuild America’s public infrastructure and family support systems has come to naught. by a much thinner, but not substantial, set of compromises on health care versus inflation, climate change and deficit reduction strategies that appear to be heading for quick votes in Congress.
Lawmakers are rushing the $739 billion proposal put forward by two top negotiators, Senate Majority Leader Chuck Schumer and Sen. Joe Manchin, the conservative Democrat from West Virginia who has rejected Biden’s previous plans but surprised his colleagues on Wednesday evening with a new one.
What is and is in the Democrats’ 725-page “Cut Inflation Act of 2022” as it currently stands:
REDUCED PRESCRIPTION DRUG COSTS
Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.
These new revenues would be reinvested in reducing drug costs for seniors, including a $2,000 cap for seniors buying prescriptions at pharmacies.
The money would also be used to provide free vaccinations to the elderly, who are now among the few not guaranteed free access, according to a briefing paper.
HELP PAY HEALTH INSURANCE
The bill would expand subsidies given during the COVID-19 pandemic to help some Americans who purchase health insurance themselves.
Under previous pandemic relief, additional aid was due to expire this year. But the bill would allow the aid to continue for three more years, reducing insurance premiums for people who buy their own health care policies.
“THE LARGEST CLIMATE CHANGE INVESTMENT IN US HISTORY”
The bill would invest $369 billion over the decade in climate change strategies, including investments in renewable energy generation and tax rebates for consumers to buy new or electric vehicles. second hand.
It breaks down to include $60 billion for a clean energy manufacturing tax credit and $30 billion for a wind and solar power production tax credit, seen as ways to stimulate and to support industries that can help reduce the country’s dependence on fossil fuels.
For consumers, there are tax breaks like incentives to go green. One is a 10-year consumption tax credit for renewable energy investments in wind and solar. There are tax breaks for the purchase of electric vehicles, including a tax credit of $4,000 for the purchase of used electric vehicles and $7,500 for new vehicles.
In total, Democrats believe the strategy could put the country on a path to reducing greenhouse gas emissions by 40% by 2030, and “would represent by far the biggest climate investment in history.” the United States “.
HOW TO PAY ALL THIS?
The biggest source of revenue in the bill is a new 15% minimum tax on corporations that make more than $1 billion in annual profits.
It’s a way to crack down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no tax at all.
The new minimum corporate tax would take effect after the 2022 tax year and would raise some $313 billion over the decade.
Money is also collected by strengthening the IRS to fight tax evaders. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is expected to generate $203 billion in new revenue, a net gain of $124 billion over the decade.
The bill respects Biden’s original pledge not to raise taxes on families or businesses earning less than $400,000 a year.
Lower drug prices for seniors are funded by savings from Medicare’s negotiations with drug companies.
EXTRA MONEY TO PAY DEFICITS
With $739 billion in new revenue and some $433 billion in new investment, the bill promises to allocate the difference to deficit reduction.
Federal deficits soared during the COVID-19 pandemic when federal spending soared and tax revenues plummeted as the country’s economy went through shutdowns, closed offices and other massive changes.
The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which this week released a new report on long-term projections.
This latest package after 18 months of start-stop negotiations leaves behind many of Biden’s most ambitious goals.
As Congress passed a bipartisan $1 trillion bill on highways, broadband and other investments that Biden signed into law last year, the president’s and party’s other priorities have slipped into the background.
Among them is the pursuit of a $300 monthly child tax credit that sent money directly to families during the pandemic and which would have significantly reduced child poverty.
For now, the free pre-kindergarten and community college plans are also gone, along with the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths, and deaths. other critical needs.
Associated Press writer Matthew Daly contributed to this report.