The proposed $2 billion social care legislative package known as Build Back Better suffered a virtual death blow last December when Sen. Joe Manchin, (D-W. Va.), a moderate, said he could not support it. He cited the package’s high cost and spiraling inflation, which remains a major problem.
Fortunately, he didn’t give up totally on the idea of adopting some elements of BBB. He and Senate Majority Leader Chuck Schumer (D-N.Y.) agreed to a slimmed-down pact that includes several noteworthy goals. And, on the weekend of Aug. 6, following an all-nighter “Vote-A-Rama” session, the Senate passed the bill via a tactic known as reconciliation, which requires only a simple majority vote and avoids a filibuster. The House of Representatives pass it last Friday and President Biden signed it on Tuesday.
While it doesn’t have a catchy title like Build Back Better (it’s officially called the Inflation Reduction Act of 2022), the revised package will help stymie climate change that has contributed to extraordinary weather events, reduce health care inequities by making prescription drugs more affordable and providing insurance subsidies, and even reduce the federal deficit.
Among the items in the proposal are:
- Providing tax credits of $7,500 or $4,000 to purchase new or used electric vehicles for income-eligible households
- Home energy tax credits to hep in solar panel installation, batteries, and other technologies
- Billions of dollars in investment for clean energy manufacturing (solar panels, wind turbines, geothermal, etc.)
- Giving Medicare the ability to negotiate the prices of prescription drugs, when it can be especially cost-prohibitive for senior citizens on fixed incomes.
- Free vaccines for seniors
- A three-year extension on subsidies for people enrolled in health insurance plans, through the Affordable Care Act, also known a s Obamacare.
- A financial incentive program to deter the release of methane, a major greenhouse gas
- A $2,000 annual cap for senior-citizens’ out-of-pocket spending for prescription drugs
Another really interesting proposal is a $60 billion line item to address the disproportionate burden of pollution on low-income populations and communities of color. While details on this item are not available, we nonetheless believe it’s a promising step to at least start addressing a long-standing inequity.
Islamic Relief USA believes climate change is an existential threat, greatly exacerbated by the actions and decisions made by us in our daily life that contribute to an excessive amount of greenhouse gas pollution. This legislative package provides common-sense incentives for residents to wean-off their dependence on fossil fuels and adopt clean energy technologies. It’s a win-win on many levels.
The programs would be paid for through a new minimum 15% corporate tax. While corporations are technically taxed at 21 percent, many of them use loopholes to avoid even paying that share. The 15% tax is a way to address that.
The tax revenue will help generate some $739 billion over the next decade. Of that, $433 billion will go toward funding the clean energy and health care initiatives, and the remaining $300 billion will go toward cutting the deficit.
Schumer described the proposed legislation as transformative, saying, among other things, that it will “tackle the climate crisis with urgency and vigor, ensure the wealthy corporations and individuals pay their fair share in taxes, and reduce the deficit.”
The bill was slightly modified. Sen. Kyrsten Synema, (D-Ariz.), requested that the carried interest loophole, which enables private equity and venture capitalists to pay much lower taxes on their earnings, remain unchanged, as they are taxed at capital gains rates instead of income tax rates. That single move alone means about $14 billion less in taxes, which is a a lot of money, but a relatively small amount when compared to the size of the package.
There are some who will say this bill leaves out a lot of the core elements that comprised BBB, including affordable child care, elder care, free community college, and an expansion of Medicare to provide eyeglasses and hearing aids. While all of those are noteworthy programs, the simple fact is there just wasn’t sufficient support among federal lawmakers to move forward on them.
Thus, we must refrain from making perfect the enemy of the good. What’s being presented now is a reasonable package that we hope will generate just enough support to see it enacted.
Millions of working- and middle-class families, some of whom Islamic Relief USA has worked with, are depending on this legislative package for a cleaner and more breathable planet, affordable drugs that won’t bankrupt households, and overall sustainability.
We’re pleased to see progress on some crucial issues.