WASHINGTON — President Biden signed a landmark tax, health and energy bill on Tuesday, taking an important step toward achieving his goal of modernizing America’s economy and reducing reliance on fossil fuels. .
Massive legislation cuts prescription drug costs for seniors in Medicare, increases federal subsidies for health insurance, and cuts the federal deficit. It also helps electric utilities switch to lower-emission energy sources and encourages Americans to buy electric vehicles through tax credits.
But failing to provide workers with many of the other drastic economic changes Biden promised will help Americans earn more and enjoy the comforts of middle-class life. right.
Biden signed into law what Democrats call the Inflation Control Act in the White House dining room. He and his allies viewed the bill’s success as a near-miracle given that it required more than a year of intense negotiations among congressional Democrats. He signed a compromise bill he called “the biggest step forward against climate change yet” and “a godsend for many families” struggling with prescription drug costs.
“The bill I’m signing isn’t just for today. It’s for tomorrow. It’s about bringing progress and prosperity to American families,” Biden said.
Administration officials say that Republicans oppose much of his agenda on taxes and spending, and given the very thin Democratic majority in the House and Senate, Mr. Says it passed far more economic agendas. His wins include last year’s $1.9 trillion economic relief plan aimed at helping workers and businesses survive the pandemic, and two bipartisan bills to make America more competitive. infrastructure bill and $280 billion in spending to boost domestic semiconductor manufacturing and compete with China).
But few would dispute that Mr. Biden failed to convince lawmakers to deliver on one of his greatest economic goals: investing in workers, families, students and the rest of the world.
Both parts of the equation – modernizing the physical backbone of the economy and empowering workers – are about how a more assertive federal government can accelerate economic growth and ensure its benefits are widely shared. Important to Biden’s vision.
In a warming world with increasing economic competition from sometimes hostile nations, Mr. Biden said investing in low-emission energy sources and advanced manufacturing is critical to America’s business and the health of the nation’s economy. thinking about.
Mr. Biden also believes that people investments are important. The US economy is still dominated by service industries such as restaurants and healthcare. The recovery from the pandemic recession has been hampered, in part, by the loss of support for some of the workers who would help revive these industries. The cost and availability of child care alone sidelines many potential workers, leaves abundant vacancies unfilled, and costs business owners.
Contents of the Inflation Control Law
Contents of the Inflation Control Law
substantive law. The $370 billion climate, tax and healthcare package signed by President Biden on August 16 could have far-reaching environmental and economic impacts. Here are some of the key provisions:
But Biden has so far implemented many of the programs he proposed to help Americans juggle work responsibilities with caring for children and aging parents, and access quality education from an early age. Not realized. He was unable to secure his college tuition for a general pre-kindergarten or free community for him. He could not find support to fund childcare subsidies or expand tax credits aimed at fighting child poverty. His plans to spend hundreds of billions of dollars to expand and improve home health care services have also failed.
These omissions lead to what liberal economists call a missed opportunity to help Americans work more, earn more and run the economy more efficiently.
Biden has succeeded in persuading Democrats and some Republicans to invest in the physical economy and embrace an interventionist view of federal power, said Washington’s liberal groundwork cooperative. executive director Lindsey Owens said. By embracing industrial policy and government-led emission reductions, “he’s shifted to the economic system and the economic agenda, with the government really swinging the weight around and putting a thumbs up on the scale,” she said.
However, she added: That’s a big mistake. Our economy cannot reach its full potential until we have affordable child care. ”
In Congress, the agenda that Mr. Biden has largely filled in the “American Families Plan” has always faced a much more difficult road than the competitiveness efforts in the “American Jobs Plan.” rice field. It has little support from Republicans, ruling out the bipartisan path that gave Mr. Biden victories in infrastructure, R&D and domestic manufacturing. And it ran into trouble with some Senate Democrats, including West Virginia’s Joe Manchin III, who early called on Biden to limit the size and scope of the bill he signed Tuesday. .
Biden backed off much of what he had promised to overhaul tax laws to “reward work, not wealth,” over opposition from another critical Senate Democrat, Arizona Rep. Kirsten Cinema. I had to. As he repeatedly suggested, he would raise the top marginal income tax rate for high-income earners or invest millionaires’ investment returns at the same tax rate as their income from wages, which he promised would help reduce economic inequality. did not have to be taxed on
The law he signed into law on Tuesday is expected to add about $300 billion in taxes, mostly by imposing new taxes on big businesses. The law includes a new tax on certain corporate stock buybacks and a minimal tax on large corporations that use deductions and other methods to reduce taxes. We are also increasing funding for the Internal Revenue Service to crack down on tax evasion and recover hundreds of billions of dollars owed to the government but not paid by high income earners and businesses.
Those increases represent just a fraction of the tax revenues from businesses and high-income earners that Biden initially proposed to fund his agenda.
“On the tax side, the president has fallen far short of what he promised,” said Steve Rosenthal, a senior fellow at the Urban Brookings Center for Tax Policy in Washington. .”
Ben Harris, an economic adviser in the Biden campaign and now the Treasury’s assistant secretary for economic policy, said a tougher IRS against tax evasion by high-income earners and businesses would itself make the tax system more favorable to workers. said it would help balance the .
Mr Harris said: Specification. “
Other officials have defended Mr. Biden’s achievements. These include securing several long-promised programs that are popular with voters but are struggling to get through in Washington, such as cutting prescription drug costs and improving infrastructure. They note that the bill he signed seeks to use the purchasing power of the federal government to raise wages and promote unionization.
Stephanie Feldman, Biden’s 2020 campaign policy chief and now a White House aide, said: “Every piece of the puzzle is about empowering workers and helping individuals across the country earn a living wage. It’s designed to get.” Senior Advisor to Domestic Policy Advisor.
The bill Biden signed on Tuesday would invest $370 billion in low-emission energy spending and tax credits to fight climate change. This aims to help the United States reduce its greenhouse gas emissions by 40% from his 2005 estimates by 2030. This puts the country closer to Biden’s goal of reducing greenhouse gas emissions by at least 50% in the meantime.
It is expected to increase federal health insurance subsidies, allow the government to negotiate prices for Medicare prescription drugs for the elderly, and cut the federal budget deficit by about $300 billion over 10 years. Administration officials have called the health factor important to millions of workers and say the climate factor will create high-paying union jobs in the emerging clean energy economy.
But climate action is also beneficial for what Mr. Biden failed to achieve. Biden called on Congress to create a private climate change task force. In an overview of America’s jobs plan, Biden described his $10 billion effort to develop “the next generation of protection and resilience workers.”
Following in the footsteps of the Civilian Conservation Corps, which mobilized more than three million men in the 1930s to build roads and parks, cut down trails, and plant trees across the country, the reimagined climate workforce will transform the House of Representatives. It was part of the bill that passed. November.
It was a direct investment in workers. And it was left on the conference floor after Mr. Manchin stepped away from that package and negotiations resumed this year on a new deal.
But Mr. Manchin, who comes from a coal country, signed a wide range of other climate treaties. On Tuesday, Mr. Manchin stood behind Mr. Biden as he signed the bill into law, nodding that the president played a key role in making the compromise.
“Joe,” Mr. Biden said.
Lisa Freedman, Emily Cochrane When Michael D. Shear contributed to the report.