What’s in the Manchin-Schumer tax hike and the climate change bill?

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After more than a year of “Build Back Better” talks, Senate Majority Leader Chuck Schumer and Senator Joe Manchin announced an agreement on a heavily scaled-down reconciliation package on Wednesday.

With $433 billion in spending, the package spends less than a sixth of the roughly $3 trillion colossal bill the Democrats discussed at this time last year. It includes far fewer amenities, but Democrats say it will bring in $739 billion in tax revenue.

“The Inflation Reduction Act of 2022 will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and production, and cut carbon emissions by about 40% by 2030,” Schumer, DN. Y., and Manchin, TBEN.Va., said in a joint statement Wednesday, using the bill’s new official name.

“The bill will finally allow Medicare to negotiate prescription drugs and reduce health care costs for millions of Americans,” she added.

MANCHIN, SCHUMER AGREE TO EXTENDED BETTER BUILD BACK BACK

Democrats previously voted in favor of provisions of the bill that would expand portions of the Affordable Care Act (ACA), also known as ObamaCare, and aim to lower prescription drug prices.

According to a summary of the bill published Wednesday, the agreement would extend the ACA through 2025 and allow Medicare to negotiate prescription drug prices. The ACA renewal would cost $64 billion, Democrats say, and prescription drug reform would save the government $288 billion.

Senate Majority Leader Chuck Schumer Called the Bill the "Inflation Reduction Act of 2022."

Senate Majority Leader Chuck Schumer called the bill the “Inflation Reduction Act of 2022.”
(TBEN Photo/J. Scott Applewhite)

Where the Democrats were previously – until Wednesday – stuck were tax, energy and climate provisions. Manchin, who comes from an energy-producing state, is often at odds with his own party over climate policy. Furthermore, the moderate senator, with his expressed concerns about inflation and the economy, repeatedly said that Congress must ensure that any economic policies it conducts will not do any harm.

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But according to the bill’s summary, the Manchin-Schumer package would spend a total of $369 billion on energy and climate efforts. And it includes a minimum corporate tax rate of 15% for companies worth more than $1 billion, which is estimated to bring in $313 billion; souped-up IRS tax enforcement, estimated to bring in $124 billion; and it will close the loophole in the interest-bearing interest rate, which is estimated to bring in $14 billion.

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In addition to protesting increased taxes, Republicans are likely to criticize many of the bill’s clean energy and environmental provisions. Among them is nearly $1.9 billion for a “Nighbourhood Access and Equity Grant Program.” That money would be available, among other things, to help repair areas of “canopy cover holes” in underserved communities.

The deal was announced the same day the CHIPS bill passed in the Senate with wide bipartisan support — an agreement conditioned on Democrats repealing their reconciliation bill.

The deal was announced the same day the CHIPS bill passed in the Senate with wide bipartisan support — an agreement conditioned on Democrats repealing their reconciliation bill.
(TBEN)

Another provision of the bill provides for $1.5 billion “for tree planting and related activities, with a priority for projects that benefit underprivileged populations and areas.”

Yet another portion of the bill provides $403 million for IRS expenses, “including purchase and rental of passenger cars.”

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It would further provide a $7,500 tax credit to families earning up to $300,000 per year for electric vehicles assembled without essential minerals from hostile countries and not assembled in hostile countries.

The tax credit applies to new vans, SUVs and pickups up to $80,000. For other cars, the limit is $55,000.

Families earning up to $150,000 can also get a $4,000 tax credit on used electric vehicles.

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In a recession, Democrats raise taxes, destroy jobs, squeeze their savings and choke on American energy,” said GOP Senator John Barrasso, R-Wyo. and small businesses. Their tax scheme also includes giving tax breaks for electric vehicles and ObamaCare grants to people earning more than $100,000.”

Barrasso added: “This reckless tax and spending wave will leave working families with even higher prices, more tax hikes and more pain than they already feel.”

Rachel Paik of TBEN News contributed to this report.