WASHINGTON, DC – Today, Congresswoman Lori Trahan (MA-03) supported passage of the Inflation Reduction Act, comprehensive anti-inflation legislation that will reduce families’ health care and prescription drug costs, make unprecedented investments in combating the climate crisis, and reduce the deficit.
“The Inflation Reduction Act is a critical step forward in our work to lower out-of-pocket costs for working families, an unprecedented leap in our fight against the climate crisis, and a long overdue reduction in our federal deficit,” said Congresswoman Trahan. “The investments contained in this legislation will reduce monthly insurance bills, lower the price of lifesaving medicines at the pharmacy, and even decrease the costs of our utilities. The Inflation Reduction Act is good for families, good for our economy, and good for our planet. This is what it looks like when Congress puts people over politics to create legislation that actually works for the people who need help most.”
The Inflation Reduction Act is made up of three main portions, including health coverage and prescription drug savings, actions to address climate change, and deficit reduction.
Health Coverage & Prescription Drug Savings:
The health coverage and prescription drug portions of the Inflation Reduction Act will reduce monthly payments and out-of-pocket expenses for working families across Massachusetts. Many will see hundreds or thousands of dollars in savings annually, including the 1.3 million residents with Medicare coverage, workers with employer-based health insurance, and the more than 300,000 Bay Staters who have coverage through the Health Connector. Specifically, the legislation:
- Empowers Medicare to negotiate the price of prescription drugs and passes those savings onto Medicare recipients and taxpayers who pay two to three times more for their medications than people in other wealthy countries.
- Caps the out-of-pocket costs for seniors at $2,000 each year, saving older Americans hundreds or even thousands of dollars annually.
- Sets the price for insulin at $35 per month for Medicare beneficiaries.
- Prohibits pharmaceutical companies from hiking Medicare drug prices higher than the rate of inflation, implementing a penalty paid back into Medicare if they violate this provision.
- Extends critical marketplace subsidies for low-income Americans so 13 million people don’t see their rates skyrocket overnight, including 3 million Americans who would lose their insurance without this provision.
- Closes the “family glitch” by ensuring that no family is forced to pay more than 9.61 percent of their income for health insurance.
Climate Crisis Investments:
The Inflation Reduction Act contains $370 billion to combat the climate crisis – the most significant climate investment in history. The provisions in the bill put the United States on path to cut greenhouse gas emissions by 40 percent by 2030 and invest in a clean energy economy that creates good paying jobs and lowers energy costs by an average of $500 each year for families. Specifically, the bill:
- Creates and funds a suite of new clean energy tax credits designed to incentivize clean energy transitions, electric vehicle purchases, and new technology and manufacturing innovation that will lower energy prices for families.
- Invests $60 billion in the American manufacturing sector to jumpstart the shift to cleaner processes for steel, cement, aluminum, and other key industries, and includes targeted support for Made in America initiatives focused on clean energy technologies.
- Introduces a methane fee on the oil and gas industry for the methane pollution emitted during extraction.
- Establishes a $27 billion green investment fund designed to deploy clean energy resources to communities, with at least 40 percent targeted to disadvantaged communities.
- Provides new rebates and expands existing home energy efficiency tax credits for working families purchasing efficient and electric appliances, including heat pump water heaters, induction cooktops, and upgraded breaker boxes.
- Allocates $25 billion for the conservation and stewardship of the nation’s coasts, forests, and climate-smart agriculture.
The Inflation Reduction Act is paid for by savings from the new Medicare drug negotiation as well as provisions that close tax loopholes that have long been exploited by billion-dollar corporations and the wealthiest Americans. Adhering to the promise that the legislation would not raise taxes on families making less than $400,000, the legislation instead:
- Imposes a corporate alternative minimum tax on corporations that earn more than $1 billion in annual profits but don’t pay at least a 15 percent tax rate. This provision targets as many as 125 corporations averaging nearly $9 billion in profits each that paid effective tax rates of just 1.1 percent. The minimum corporate tax will raise $222 billion.
- Provides the Internal Revenue Service with the resources necessary to update its outdated systems and fully staff the agency to ensure the wealthy pay their fair share. The IRS investments will lead the agency to collect $203 billion in unpaid taxes from corporations and the wealthy.
- Institutes a 1 percent fee on stock buybacks conducted by publicly traded corporations to help level the playing field for workers. The provision targets stock buybacks, which traditionally favor rich shareholders and top executives over investments in workers. The buyback fee will raise $74 billion.
- Prevents the wealthiest Americans from sheltering their nonbusiness income to avoid taxes by extending the limitation on excess business losses for two years. This provision will raise $52 billion.
- Medicare negotiation, price gouging penalties, and other prescription drug provisions would also save $287 billion.
Experts across the political, ideological, and economic spectrum agree that the Inflation Reduction Actwill drive down inflation and reduce costs for working families while combating the climate crisis and reducing the federal deficit. A fact sheet on the legislation, including additional dollar figure amounts, can be accessed by clicking HERE.
The Inflation Reduction Act now moves to President Joe Biden’s desk to be signed into law.