The Democrats’ Big Package: What’s in and what’s out? | Health & Fitness

By LISA MASCARO – AP Congressional Correspondent

WASHINGTON (AP) — It’s nowhere near the $4 trillion proposal President Joe Biden first floated for rebuild America’s public infrastructure Y family support systems but the compromise package of health care strategies to combat inflation, climate change and deficit reduction appears to be on track towards the Senate votes this weekend.

The proposal estimated at $740 billion, pummeled by two top negotiators, Senate Majority Leader Chuck Schumer and the reluctant senator. Joe Manchin, the conservative Democrat from West Virginia, includes some of the party’s priorities that have been hotly contested. But the final touches came this week from Sen. Kyrsten Sinema, D-Arizona, who put her work in the final revisions.

People are also reading…

What’s in and out of the Democrats’ “Inflation Reduction Act of 2022” as it stands now:

LOWER PRESCRIPTION DRUG COSTS

Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription drug prices with pharmaceutical companies, saving the federal government an estimated $288 billion over the 10-year budget period.

That new revenue would be invested in lower costs for seniors on medications, including a $2,000 out-of-pocket limit for seniors who fill prescriptions at pharmacies.

The money would also be used to provide free vaccines to seniors, who are now among the few not guaranteed free access, according to a summary document.

HELP PAY FOR HEALTH INSURANCE

The bill would extend the subsidies granted during the covid-19 pandemic to help some Americans who buy health insurance on their own.

Under the previous pandemic relief, the extra help was due to expire this year. But the bill would allow the assistance to continue for three more years, lowering insurance premiums for people who buy their own health care policies.

See also  Why it's so hard to link nutrition to dementia risk

‘THE LARGEST SINGLE INVESTMENT IN CLIMATE CHANGE IN US HISTORY.’

The bill would invest $369 billion over the decade in strategies to combat climate change, including investments in renewable energy production and tax rebates for consumers to buy new or used. electric vehicles.

It is broken down to include $60 billion for a tax credit for clean energy production and $30 billion for a tax credit for wind and solar energy production, seen as ways to boost and support industries that can help curb the country’s dependence on fossil fuels.

For consumers, there are tax breaks as incentives to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar power. There are tax breaks for the purchase of electric vehicles, including a tax credit of $4,000 for the purchase of used electric vehicles and $7,500 for new ones.

In all, Democrats believe the strategy could put the country on track to reduce greenhouse gas emissions by 40% by 2030, and would “represent by far the largest climate investment in US history.” .

HOW TO PAY ALL THIS?

The bill’s biggest revenue-raiser is a new 15% minimum tax on corporations making more than $1 billion in annual profits.

It’s a way to clamp down on some 200 US companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no tax at all.

The new corporate minimum tax would take effect after fiscal year 2022 and raise some $258 billion over the decade.

Revenue would have been $313bn, but Sinema insisted on a change to the 15% corporate minimum, allowing a deduction for depreciation used by manufacturing industries. That cuts about $55 billion from total revenue.

See also  A global approach to personalized nutrition is best, say scientists

Money is also raised by encouraging the IRS to prosecute tax fraud. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue, a net gain of $124 billion over the decade.

The bill sticks to Biden’s original promise not to raise taxes on families or businesses making less than $400,000 a year.

Lower drug prices for seniors are paid for with savings from Medicare negotiations with drug companies.

WHAT HAS CHANGED IN THE LAST DAYS?

To win over Sinema, Democrats abandoned plans to close a tax loophole the wealthiest Americans have long enjoyed: so-called “earned interest,” which under current law taxes wealthy hedge fund managers and others at a 20% rate.

The left has for years sought to raise the accrued interest tax rate, raised to 37% in the original bill, more in line with higher income earners. Sinema would not allow it.

Keeping the wealthy tax free deprives the party of $14 billion in revenue it was counting on to help pay for the package.

Instead, the Democrats, with Sinema’s approval, will impose a 1% excise tax on share buybacks, raising some $74 billion over the decade.

EXTRA MONEY TO PAY DEFICIT

With some $740 billion in new revenue and about $433 billion in new investment, the bill promises to put the difference toward deficit reduction.

Federal deficits skyrocketed during the COVID-19 pandemic as federal spending soared and tax revenues fell as the nation’s economy thrashed through shutdowns, office closings and other massive changes.

See also  Kentucky judge extends block on state abortion ban | Health & Fitness

The nation has seen deficits rise and fall in recent years. But the overall federal budget is on an unsustainable path, according to the Congressional Budget Officewhich released a new report this week on long-term projections.

This latest package, after 18 months of on-and-off negotiations, leaves behind many of Biden’s more ambitious goals.

Although Congress approved a bipartisan $1 trillion infrastructure bill for roads, broadband and other investments that Biden signed into law last year, the other key priorities of the president and the party have vanished.

Among them is the continuation of a $300 monthly child tax credit that sent money directly to families during the pandemic and is believed to have vastly reduced child poverty.

Also gone, for now, are free pre-kindergarten and community college plans, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other critical needs.

Associated Press writer Matthew Daly contributed to this report.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.