Clean energy is one of the tentpoles of US President Joe Biden's massive climate and health proposal
Washington (AFP) - Hundreds of billions of dollars for clean energy projects, cheaper prescription drugs and new corporate taxes are a few of the key items in US President Joe Biden’s massive investment plan, which Congress has now passed.
Here’s a closer look at the signature elements of the package, which represents a big political win for the Democratic president heading into November’s crucial midterm elections.
Biden said he will sign it into law next week.
- $370 billion for clean energy, climate -
Producers and consumers of solar energy, as well as wind and nuclear power, would earn tax credits under the new US scheme
The legislation marks the biggest investment in US history in the fight against climate change.
Rather than attempting to punish the biggest polluters in corporate America, the bill put forward by Biden’s party instead offers a series of financial incentives aimed at steering the world’s biggest economy away from fossil fuels.
Tax credits will be given to producers and consumers of wind, solar and nuclear power.
It allots up to $7,500 in tax credits to every American who buys an electric vehicle. Anyone installing solar panels on their roof will see 30 percent of the cost subsidized.
Around $60 billion will be allocated for clean energy manufacturing, from wind turbines to the processing of minerals needed for electric car batteries.
The plan put forth by US Democrats would help protect the nation's forests from the ravages of persistent wildfires
The same amount will go towards programs to help drive investment in underprivileged communities, notably through grants for home renovation to improve energy efficiency and access to less polluting modes of transportation.
Huge investments will go into making forests less susceptible to wildfires and protect coastal areas from erosion caused by devastating hurricanes.
The bill aims to help the United States reduce its carbon emissions by 40 percent by 2030, as compared with 2005 levels.
- $64 billion for health care -
Bringing down US prescription drug costs is a key part of the proposed legislation
The second major aspect of the legislation is to help reduce the huge disparities in access to health care across the United States, notably by reining in skyrocketing prescription drug prices.
Under the new plan, Medicare – the nation’s health insurance plan for those aged 65 and older, or with modest incomes – will be permitted to negotiate prices of certain medications directly with Big Pharma for the first time, likely yielding far better deals.
The plan requires pharmaceutical companies to offer rebates on certain drugs if the prices rise faster than soaring US inflation.
It also extends benefits under Barack Obama’s signature Affordable Care Act – known colloquially as Obamacare – until 2025.
- Minimum corporate tax of 15% -
Alongside these huge investments, the so-called “Inflation Reduction Act” seeks to pare down the federal deficit through the adoption of a minimum corporate tax of 15 percent for all companies with profits exceeding one billion dollars.
The new tax aims to prevent certain huge firms from using tax havens to pay far less than what they theoretically owe.
According to estimates, the measure could generate more than $258 billion in tax revenue for US government coffers over the next 10 years.